The western debut of GPS-enabled, dockless bike sharing in B.C. highlights the province’s role as a prime entry point for new Chinese business concepts looking for beachheads in the North American markets.
Late this month, Ubike Technologies North America Inc., better known as
U-bicycle, will officially launch its headquarters in Vancouver. The company has already been testing the waters in B.C. for the last three months, putting 200 bikes in Victoria to gauge user interest.
The concept is similar to programs like Vancouver’s Mobi bike share, albeit with one major difference – there are no stations or docks for the bikes. Users download an app on iTunes or Google Play, then use the app to locate a nearby street-parked bike. Users would unlock the bikes using the app by scanning a code on the bike, then simply cycle to their final destination without having to return it to a station.
Ubike Technologies CEO Grace Min said that while this is a new concept for North American users, the uptake in Victoria since the program’s soft launch in October has been encouraging, with 5,000 app downloads and a large number of repeat users making their presence felt.
“Educating the market is a process,” Min said. “But our bikes are designed to catch people’s attention, so we’ve had a lot of people seeing our bikes, wondering what’s going on and asking how things work. When they search, they will find the whole process is very easy. So for a launch market, adoption has actually been very fast.”
Dockless bike sharing caught fire in the Chinese market around 2016, when entrepreneurs started targeting the country’s tech-savvy, environmentally conscious consumer base with GPS-equipped bikes that can be picked up and dropped off anywhere. The dockless nature of the concept means that startups did not need to take on the overhead costs and permitting for setting up station locations, and there was an immediate rush to the market by multiple players.
But as is the case with Chinese-style crowdfunding – another concept that made its first North American landfall in Vancouver a few years ago – the quick rush of competitors in dockless bike sharing’s home market quickly created a bubble, and soon the number of service providers began dropping sharply (from around 60 in 2016 to possibly fewer than 10 in 2018).
Media reports showed streets in some Chinese cities filled with piles of unused GPS bikes, and authorities have begun cracking down by limiting the number of these types of bikes that are allowed to be on the street, in an effort to decrease the clutter. The two main players in China – Mobike and Ofo – are backed by tech giants Tencent and Alibaba (NYSE:BABA), respectively.
Min acknowledged that the industry is facing challenges at home, but noted the lesson has been learned for the Canadian market. She added that because U-bicycle is a first mover in the North American market, there should be more space for the company to operate.
“We are not going to pile large numbers of bikes onto the streets like what happened in the Chinese market,” Min said. “We are constantly in communications with city planners in Victoria, and we have a good idea of the population, demographics and bike usage trends in a certain neighbourhood before we commit bikes to that area. That will be the trend moving forward: understanding the demand first, then putting what’s needed to meet that demand.”
