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Bike-sharing startup oBike faces strict safety rules as Melbourne city councils take action

Angela Castles /

bike sharing

Singaporean giant oBike ceased local operations in June. Source: AAP/oBike Australia.

Three Melbourne city councils have announced strict new rules for bike-share service oBike that will allow the councils to confiscate abandoned bicycles and issue fines for the startup’s bikes found breaching these new rules.

The Melbourne, Yarra and Port Phillip councils came together to sign a memorandum of understanding with oBike in a bid to prevent the safety hazards and inner city clutter posed by dockless bikes being strewn across gutters, thrown in rivers and oceans, and even ending up in trees.

The Singapore-based bike-sharing service was introduced in Melbourne in August, deploying 1250 dockless bikes that were soon subject to criticism for clogging footpaths, edging out space on existing bike parking racks, and becoming safety hazards when incorrectly parked.

These issues haven’t been isolated to Australia, with Beijing and Shanghai experiencing the same problems on a larger scale, prompting government agencies to claim tens of thousands of shared bicycles in an attempt to restore order on their city streets and footpaths.

The agreement dictates that oBike bikes should not obstruct footpath access; must be parked upright at all times; should not be parked on steps, ramps or other areas providing assistance to the vision impaired; and should be parked away from roadside kerbs, traffic islands, trees, buildings, light poles or street furniture.

OBikes found to be dangerously placed will need to be relocated within two hours under the new agreement, and the councils will impound any bikes breaching these rules, with operators required to pay a $50 fee for the bikes to be released.

Under the new agreement, bikes that are not claimed within the 14 day impound period will be recycled.

Any oBikes that are reported as damaged, unsafe or faulty are required to be immediately removed and repaired, while oBikes parked in excessive numbers in a single locations will need to be removed by oBike operators within 24 hours.

An ‘infant’ industry

Chethan Rangaswamy, head of marketing at oBike Australia tells StartupSmart the issues the stsratup has faced in Melbourne are the result of teething problems in the bike-sharing sector.

“Bike-sharing is still in its infancy stage now in Australia,” he says.

“As such, many cyclists are still not fully aware of the correct behaviours required to develop a socially gracious and courteous community of riders.”

“This leads to issues such as the indiscriminate parking and vandalism. We are committed to engaging the public for ongoing education on cycling etiquette.” 

Rangaswamy says the agreement will “enhance the bike-sharing experience in Melbourne”, and the startup will continue to engage these councils in dialogue “in pursuit of a more gracious bike-sharing community” in future.

Victoria’s Minister for Local Government Marlene Kairouz is supportive of the moves by councils to ensure bike-sharing services provided a safe and litter-free environment for Melbourne residents.

“We welcome moves by councils to use their existing powers to ensure that share bike operators are accountable for the bikes they’re putting on the road,” Kairouz told StartupSmart.

“We have always said that while we welcome innovation and efforts to get more people on bikes, any operators in this space must comply with local laws and meet community expectations.

“We’ll continue to work with local councils to ensure they have the powers they need to manage the challenges posed by this emerging industry.”

OBikes is not the only bike-sharing service operating in Australia, with Beijing bike-sharing giant ofo launching its pilot program in Adelaide earlier this month.

At the time, its head of strategy in Australia, Scott Walker, acknowledged that bike-sharing is “quite a resource-intensive model” and says there was still “quite a bit to be done to get it right”.

Walker says he has been in ongoing talks with a series of councils across Australia, including the three Melbourne councils who have recently signed this memorandum of understanding (MOU).

“We’ve been talking to those three councils for some time, and in terms of the MOU, we think it’s a sensible step,” he tells StartupSmart.

“For bike sharing to work in the long term there does need to be sensible, appropriate and consistent regulation across local councils and state governments.”

Ofo is now in talks to launch its operations in Melbourne, Walker says, and while he concedes there will always be inherent challenges involved with rolling out a new concept, he adds there are also solutions to ensure it is done properly.

“One of the challenges has been rapid growth of a really exciting and needed idea … the resourcing may not be catching up with the effort required,” he says.

“While there are challenges with the process of rolling out a station-free bike-sharing product, there are also solutions: having the appropriate tech, having an operational model in place before a rollout, and having a local team on the ground that know the local conditions.”

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Angela Castles

Angela Castles is a former StartupSmart journalist.

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