OBike pulls out of Melbourne and enters liquidation in Singapore: Why hasn’t bike-sharing kicked off in Australia?
Monday, July 9, 2018/
It’s safe to say that bike-sharing companies in Australia haven’t had the smoothest ride over the past 12 months.
From unhappy local councils, to Melbourne’s former Lord Mayor declaring their bikes “clutter”, and users across the country gleefully dumping bikes in rivers, up trees, and on top of buildings, companies such as oBike and Ofo have found themselves at the back of the peloton.
Recently oBike, the most prominent (or infamous) of this new raft of bike-sharing startups announced it would be pulling its bikes out of Melbourne. The announcement follows a crackdown by the Environment Protection Authority (EPA), which would have seen oBike pay fines of up to $3,000 if a discarded oBike blocked a street for more than two hours.
These regulations were born out of months of frustration for local councils and the City of Melbourne, which have decried the bikes for regularly obstructing pedestrians, going so far as to sign a memorandum of understanding with the company in October last year to try and prevent the bikes from “cluttering” footpaths.
But the new regulations proved too strong a headwind for the Chinese-founded company, which has now retreated from the city, but still has operations in Sydney. However, other operators such as Mobike and Ofo have reportedly decided to go ahead with their Melbourne launches despite the significant fines.
Following its retreat from Melbourne, the ABC reports oBike’s parent company in Singapore has entered liquidation, with appointed liquidators FTI Consulting telling SmartCompany they are in the process of attempting to recover users’ oBike deposits.
“The Provisional Liquidators are aware of the media reports surrounding the refunds requested by deposit holders,” the liquidators said.
“[We] will be liaising with the company’s director and shareholder/founders regarding this issue and to discuss whether it is their intention to provide such a refund.”
Despite the issues, the company’s ‘oBike Australia’ Facebook page has reassured users the company does not intend to pull out of Australia entirely.
“We are also working closely with local authorities in Melbourne for a detailed discussion on how we can better provide our service,” the company said.
So how did we get to this point and why hasn’t bike-sharing taken off among Aussies?
Australian bike-sharing: A timeline
In mid-June 2017, oBike completed a trial of its bike-sharing services in Melbourne, and before long the service was also available in Sydney. At the time, experts questioned if the international company would see success, given the lack of uptake of Melbourne’s already existing bike-sharing service.
Less than a month after launching, the issues with the bike-sharing model quickly became apparent. Bikes were being left in trees, jammed on fences, and tossed into the Yarra River.
While unacceptable behaviour, Australian users began to get creative, leading to some amusing photos posted on social media.
— Paul Wong (@___pw___) September 19, 2017
— ABC Sydney (@abcsydney) July 6, 2018
Not long after this, Lord Mayor of Melbourne at the time Robert Doyle vowed to crack down on bike-sharing operators, imposing an ultimatum: if they could not ensure their bikes were not “clutter”, they’d be ran out of town.
“We work hard to keep the city free of clutter. They are clutter and that must be fixed,” Doyle said at the time.
In an attempt to address the problem head-on, oBike entered into a memorandum of understanding with the City of Melbourne, City of Port Phillip and City of Yarra councils, promising the bikes would not obstruct footpaths and would be parked upright at all times, amongst other requirements.
Sydney city councils also began to take action, with the ABC reporting Waverley Council in NSW impounded more than 50 bikes in March, declaring the companies needed to “clean up their act”.
At the same time, NSW Minister for Transport Andrew Constance told 2GB radio the bikes were “disgusting”.
“They’re disgusting and it’s like dumped shopping trolleys everywhere,” he said.
“We’ve got to get them docked, we’ve got to get them cleaned up because it’s repulsive the way they’re being dumped everywhere.”
The EPA enacts its harsh penalties for discarded share-bikes, and oBike departs Melbourne.
Why didn’t it work?
Speaking to SmartCompany, local startup guru and venture capitalist Alan Jones believes there’s an array of reasons bike-sharing startups such as oBike failed to achieve traction in Australia, despite roaring success in other countries such as China.
Primarily, Jones claims the issue of distance — one often lamented by convenience-focused companies in Australia — was a factor, with few Australians being close enough to work to ever consider riding there.
“Most urban and suburban Australians commute to and from a job or an education, so they make one trip in the morning, and one in the evening. Both these trips are a relatively long journey and undertaken at a time of maximum traffic congestion,” Jones says.
“Too many of those journeys are too far and too stressful for an Australian office worker to make by bicycle, especially when 6–8 months of the year in Sydney and Melbourne, locals would consider it either too hot or too cold/rainy to ride a bicycle to/from work.”
Jones, a former urban cycler himself, also believes few Australians are confident enough bike riders to comfortably ride around streets such as Melbourne’s, where hook turns and busy intersections can easily rattle an optimistic hubbard. Additionally, Australian drivers are less sympathetic towards cyclists compared to drivers internationally, Jones says.
“Singapore, Melbourne and Sydney are all cities where urban amenity are highly valued, and we would rather pay more for an alternative mode of transport than have our footpaths, street fronts and parks littered with abandoned bikes,” he says.
“Add to that the terrain challenges of Sydney in particular, and major arterial routes that provide no access for bicycles, and I’m surprised anybody thought it would be a good idea to bring bike-sharing here.”
From the frontlines
Five critical questions: Are you listing your startup too soon? Lisa Schutz Verifier founder
Ignoring your ‘obnoxious roommate’: What this founder learnt when she met Arianna Huffington Michelle Gallaher ShareRoot CEO
Sex appeal, runways and mature markets: Everything Guy Pearson learnt during his $26 million Series B raise Guy Pearson Practice Ignition CEO
Barriers from the outset: Why the government’s Boosting Female Founders Initiative is unlikely to succeed Laura Keily Immediation founder