Mobike co-founder Joe Xia: The king of bike sharing
Mobike is not simply a bike-sharing outfit but a tech company, says co-founder Joe Xia. On a recent first visit to Singapore, the software engineer explains why its impressive global expansion is data-driven.
The Land Transport Authority (LTA) now has some new ammunition to help improve Singapore's transport system: bike-sharing data.
Since it launched in March, Mobike, the company behind the orange-coloured bicycles that are now ubiquitous in the city, has been sharing its data on ridership with the LTA.
Mobike also hopes to help resolve one of Singapore's most stubborn transport problems - that of connecting people with other forms of public transport like bus and MRT services, aka the "last-mile" problem.
Bike sharing is China's latest export to the world, and Mobike's co-founder Joe Xia is one of its most prominent champions.
Twenty years ago, when he was a teenager in Nanjing, China was what he called "the bicycle kingdom". For millions, the bicycle was the main form of everyday transport. There were swarms of bikes in just about every city. Special lanes were set aside for them.
Then things changed. As China's cities modernised, public transportation improved. Subways and highways were built, and people got richer and started buying cars. The bike lanes began to thin out and gradually disappeared.
But the problem of "first-mile" and "last-mile" transportation remained. People still had to get from their homes and offices to subway and bus stations, and the other way round. They also had to travel short distances in areas without public transport.
City governments tried to solve these problems by introducing shared-bicycle services, in which bikes were parked in dedicated docking stations. But such systems proved inconvenient. People needed special cards to use them.
They often did not know where to find the docking stations. If they did, and after they had used the bikes, they had to park them far away from where they wanted to go. Bicycles got stolen and many needed repeated repairs.
Mr Xia, a software engineer with a degree from the University of Essex in Britain, saw an opportunity.
In January 2015, at the age of 34, he quit his job at Fiat Chrysler and launched the world's first private bicycle-sharing company, Mobike, together with former journalist Hu Weiwei, and with funding from a friendly angel investor.
By then, mobile apps, GPS and big data had come of age. He would use these technologies to iron out the kinks in bike sharing. "We wanted to eliminate all the challenges that people faced,'' he says, in a shared working space at UIC Building.
It serves as Mobike's office in Singapore, which Mr Xia is visiting for the first time.
MAKING IT SIMPLE
First, he designed the user experience to be simplicity itself.
Using Mobike's app on their phone, people can register for its service in a minute and discover where they can find the nearest bicycle, which is typically less than a three-minute walk away. They scan a QR code with their phone, the bike unlocks, they ride to their destination, lock the bike and walk away. There are no docking stations.
"As long as you have the Mobike app on your phone, it doesn't matter which country you're in,'' says Mr Xia. "If the country has Mobikes, you can use them. You don't have to worry about payment, because the app is linked to whatever mobile payment system you use.''
When Mobike was launched in Shanghai in April last year, it faced no regulatory hurdles and was, in fact, welcomed by the authorities. "We were helping the city solve its last-mile problem,'' says Mr Xia. "The government had already tried and had spent hundreds of millions of yuan. Before we launched, the city had about 50,000 station-based bicycles. But the scheme was not successful.
"It was losing money every year and the government had to spend a lot on maintenance."
With other cities in China taking the cue from Shanghai, Mobike's expansion was astonishingly rapid.
Within 18 months, it had covered 180 Chinese cities. It had also expanded overseas to another 20 cities in Japan, Italy, Britain, Thailand, Malaysia, the United States, South Korea, the Netherlands, Australia and Germany, as well as Singapore, where it launched in March this year. Mobike now boasts over 200 million registered users around the world and seven million bikes, which do an average of about 30 million trips a day.
However, having incurred high upfront costs, the company is not yet profitable, although it has raised over US$1 billion (S$1.35 billion) in angel and venture funding so far - including from the Chinese Internet giant Tencent - and is reckoned to be worth about US$3 billion.
Mr Xia points out that Mobike is not merely a bike-sharing company, but a technology company.
"In every city, we have hundreds of thousands of bicycles. If we were to rely on only humans to manage the system, it would be impossible,'' he says. "So we have to use technology."
The technology begins with the bikes themselves, which are custom designed and are said to be "smart". Each has an IoT (Internet of Things) solar-powered smart lock with sensors, the first of its kind, which can be unlocked by a phone. Each also has a built-in GPS system, which transmits data on the user's route. So at any given time, the company knows where each of its bikes is going and where it is eventually parked.
Mechanical parts are also custom designed to be maintenance-free for at least four years: The bikes have rust-proof aluminium frames, airless, puncture-proof tyres, disc brakes and shaft-driven, chainless transmissions.
Mobike also uses technology to encourage users to park in designated spaces instead of abandoning bikes in random locations. It will install doughnut-sized beacons, fixed to the ground near bus stops, MRT stations and other frequently visited spots.
If users park within range of a beacon, they will get a reward - perhaps a coupon or some additional points that they can redeem for future rides.
Users also collect credit points, for example, for completing a normal ride, reporting a malfunctioning bike and inviting a friend to join the service. Debit points are given for traffic violations, failing to lock bikes or, worse, installing a private lock.
Through users' riding and parking behaviour, the company collects about 30 terabytes of data every day. To analyse this data, the company has created its own artificial intelligence platform called Magic Cube. The platform uses the data to yield insights into ridership patterns, like which times of the day bikes are most used, which locations generate the highest demand, which routes are the most travelled and where bikes are parked.
Magic Cube enables the company to predict demand and arrange for supply accordingly. "The platform can also tell our people where they can find broken bikes,'' says Mr Xia.
"It can also tell dispatchers where to place how many bicycles. For example, it will say, 'on this road, put 10 bikes'. Based on our data, we know those bikes will get users.
"So we can optimise how the system works.''
On a laptop, he shows me a "heat map" of ridership in Singapore over a 24-hour period, based on GPS data transmitted by bikes.
USING DATA FOR TRANSPORT PLANNING
Mobike also shares its data with city planners and public transport agencies. Mr Xia explains: "In many cities, subway and bus stations were designed without plans for bikes.
"So some subways have hundreds of bikes parked outside because there are no parking facilities. That can cause problems for commuters because bikes can block their access." The company tries to help by using its technology to discover where large numbers of bicycles are parked, and then sending dispatchers to remove them.
"But really, the best solution has to be a combined effort,'' says Mr Xia. "Governments have to think about allocating more space for bike parking.''
He describes how Mobike is working with the transport authorities in Chengdu. "Based on data we shared with them, when building new bus stations, they set aside large areas for bike parking.''
Mobike's data can also help city governments make their transport systems more efficient and cost-effective.
He explains: "Previously, a lot of city planners had only bus and subway data. Now they can combine this with bike-sharing data to come up with more efficient transport solutions.
"For example, there are many bus stops because the government wants the transport system to cover as many people as possible. With bike sharing, maybe you could have fewer bus stops. So, let us say you have two bus stops within 1km on a certain road.
"You might be able to remove one of them if lots of people are riding bicycles between the two. In this way, you can optimise the city's transport system.''
In Singapore, Mobike shares its ridership data (after removing users' personal information) with the LTA. It is also sharing data with Singtel, which helps improve the telco's cellular coverage.
"If there are any areas with poor signal coverage, we will know it,'' says Mr Xia. Sharing this data also helps Mobike. He adds: "Better coverage means a better experience for our users."
Another win-win aspect of the partnership is that Mobike gets access to the hundreds of millions of users of Singtel and its associate telcos throughout the region, while Singtel gets to tap into Mobike's 200 million-strong user base in China.
A TRANSPORT REVOLUTION
Despite his company's already impressive geographical coverage, Mr Xia believes that he has only just begun his mission to revolutionise urban transportation.
He wants Mobike to have a billion users, a presence in every city, in as many countries as possible.
His vision goes beyond pedal bikes. "We are trying something different in China with transportation as a service," he says. "People have different transportation needs, depending on the distance.
"Bicycles can meet needs up to about 5km per ride. But we can't expect people to ride a bicycle for one hour to cover 8km. So there is a need for something to cover 5km to 8km and then, 8km to 15km, 15km to 25km and beyond 25km.
"How to meet all these different needs is something we're exploring right now."
Electric bikes are among the options the company is trialling.
"We want to be innovative, not just copy something that is already in the market,'' he says.
"I know people are even talking about flying cars. We will explore that category as well.
"We have the vision for that too."
But Mobike's ambitious plans will face reality checks. The bike-sharing business has a chequered history and no proven business model. Many wannabes have gone bust, including China's (until recently) third-largest player Bluegogo, which declared bankruptcy last month after barely a year of operations.
Revenues come mainly from user charges as well as the "float" from upfront deposits paid by those who register. Data could be another source of revenue. It is intriguing that the backers of bike-sharing companies include two of China's biggest data giants, Tencent and Alibaba. They would potentially have access to the data and ridership patterns of hundreds of millions of bike sharers around the world, to which they may be able to cross-sell other services. That part of the story is yet to unfold.
Meanwhile, Mobike and its ilk face operational challenges. In some Chinese cities, supply has run far ahead of demand, creating a glut of unused bicycles.
Expansion in other markets may run up against regulations that might not exist in China, such as zoning and parking laws, as well as competition from local players, which will drive down user charges. There will also be continued problems of vandalism and pilferage. In Third World markets, Internet connectivity and low smartphone penetration will be issues to contend with, in addition to poor pricing power.
Whether Mobike will be able to overcome these challenges with its durable bikes, state-of-the-art technology and deep-pocketed backers remains to be seen. But for now, the company is on a roll.