Whether anyone’s expansion plans work

Chinese cities are compact, and many of them already had significant cycling infrastructure when the bicycle-sharing companies came up. That’s not true of India. Where Chinese authorities can streamline the construction of cycling infrastructure, companies in India will have to deal with networks of local officials who may differ in their approach.

Smartphones are a prerequisite for users who will need to pay for these cycles through an app. Around 56% of people in China had a smartphone as of May 2018, according to market research firm Newzoo. India’s smartphone penetration at the same time was only 28.5%.

Comparison with the other countries

Perhaps India should compare itself with Indonesia, where cycle-sharing companies have just begun to see whether they can break through traffic that is similarly thick and motorized. Obike, founded in Singapore, moved into Bandung and a few parts of Bali at the start of this year. Boseh, a local cycle-sharing platform, has 300 bicycles and 30 stations throughout Bandung, though not all those stations are operational.

Really, though, comparisons are more fun things to write about than they are valuable, and cycle-sharing companies are likely to find that there is little use in treating India as anything other than itself.

According to The Energy and Resources Institute (TERI) report, the use of cycles as transportation has plummeted in Indian cities while car ownership continues to soar. In cities of more than one million people, cycles only serve as a mode of transportation 15% of the time, whereas motorized vehicles make up 60% of those rides.

Cycling accounted for 36% of the trips taken in the Delhi of 1957, but over the following half-century, that number fell to just 4%. India’s entrepreneurial energy makes it seem ideal for this new breed of startups, yet the largest group of people who use bicycles are those who can’t afford other modes of transit. Can they then afford smartphones?

And even these statistics might not mean much to a cycle-sharing company just starting out. Many of them have already found that their strategies might vary greatly from city to city, based on the available cycle track, government willingness to build and maintain cycling lanes, existing public transit, and the rivals with whom they’ll have to compete.

Above all of this is the question of the business model. These companies make money by charging users a fee to ride their cycles for either a certain amount of time or a set number of rides, and it’s possible that they’ll sell ads on their cycles or in their apps, or make extra cash selling the user data they collect.

Riding on

Mobycy, which started in Gurgaon last August, charges Rs 5 for every 30 minutes of a ride, and they offer a month of unlimited rides for Rs 99. China’s Mobike opened its first India branch in Pune in May, charging a “launch promotion price” of Rs 10 for 20 minutes or a “discounted” monthly pass for unlimited rides at the same cost as Mobycy’s deal.

Yulu charges Rs 10 for the first 30 minutes and Rs 5 for each subsequent half-hour, and offers a Rs 300 30-day package during which users get “60 rides of 30 minutes each.” PEDL, a branch of Zoomcar, whose website says it’s running in nine cities, charges just Rs 3 for every 30 minutes.

Chartered Bike, based in Bhopal, has different prices per ride for members and non-members. Membership costs depend on whether you pay monthly, quarterly, or yearly (Rs 149 for a month, Rs 999 for a year), but members can take a ride of 30 minutes or less for free. Trin, based in Mysuru, also uses a membership model.

These companies represent a significant chunk of the major operators in India. All of them are “dockless” or switching to dockless aside from Chartered Bike, which uses physical stations at which people lock up their cycles.

Dockless companies are easier to start because they don’t require the real estate or cost of setting up stations, though they do have to pay people to find cycles tossed in rivers or left far outside the “zones” in which cycles are supposed to be parked. If the money made from ridership fees and any other streams of income outweighs the cost of cycles, cycle upkeep, employee salaries, and other seen or unforeseen costs, these businesses will be profitable.