Bike-sharing operator ofo withdraws from Australia, less than a year after launch

Ofo bike

Source: Supplied

Beijing bike-sharing operator ofo has confirmed it will withdraw from the Australian market over the next two months, amid ongoing moves by state and local governments to crack down on bike-sharing operators.

Founded in China in 2014, ofo made its first move into Australia in October 2017, launching a pilot program in Adelaide and later putting bikes on the ground in Sydney too.

However, the company said in a statement provided to SmartCompany this morning it has made a “strategic decision to focus on priority markets internationally”.

“Ofo will therefore wind-down operations in Adelaide and Sydney during the next 60 days,” said a spokesperson.

“As part of this process, ofo will begin to remove bikes from cities and consolidate them to our warehouses.

“This decision does not come lightly, and ofo Australia will act responsibly in each market as it winds down operations, resolving any outstanding concerns before finalising operations.”

To date, ofo says its dock-less bike-sharing platform has deployed more than 10 million bikes in more than 20 countries, and the bikes have been used by more than 200 million users.

Its launch into Australia followed that of Singapore’s oBike, which launched into Australia in mid-2017, but last month announced it would be withdrawing from the Melbourne market. OBike’s parent company in Singapore has also been placed in liquidation.

OBike quickly ran into trouble after its launch last year as the brand’s easily recognisable yellow bikes were regularly discarded by riders around Melbourne and even dumped in the Yarra River.

This prompted a vow from than Lord Mayor of Melbourne Robert Doyle to give bike-sharing companies an ultimatum: if they could not ensure their bikes were not “clutter”, they’d be ran out of town.

By October, oBike had entered into a memorandum of understanding with the City of Melbourne, City of Port Phillip and City of Yarra councils and promised to ensure the bikes would not obstruct footpaths and would be parked upright at all times.

Last month, the Environment Protection Authority in Victoria imposed new rules on bike-sharing operators, which would see operators pay fines of up to $3,000 if discarded bikes block a street for more than two hours.

Meanwhile, city councils in Sydney also began taking action this year, impounding bikes and declaring bike-sharing companies needed to “clean up their act”.

Consultation is also underway for financial penalties to be imposed on bike-sharing operators in Sydney if they don’t clean up dumped bikes, while the New South Wales government said in May it will be granting local councils greater powers to deal with dumped bikes via an enforceable code of practice for bike-sharing operators.

Speaking to SmartCompany, ofo Australia and New Zealand public policy and communications manager Mitchell Price said ofo had recorded more than half a million trips on its platform since it launched in Sydney in October last year.

While others have speculated as to why bike-sharing has seemingly not taken off in Australia, Price says it will be middle-income earners who lose out from bike-sharing companies not operating in their cities, given the relatively high cost of public transport.

“They rely on affordable transport to get around their city,” he says.

NOW READ: Why the economics of bike-sharing schemes makes sense


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