Exploring the Impact of Bike-Sharing Systems on Urban Sustainability

This paper investigates the impact of bike-sharing programs on urban sustainability by examining their environmental, social, and economic dimensions. With a focus on China’s pioneering efforts, it explores how these systems alleviate traffic congestion, reduce carbon emissions, and promote healthier lifestyles. The research delves into challenges such as infrastructure demands and regulatory frameworks while assessing policy implications for global adoption. Through case studies, this study provides insights into the potential of bike-sharing to transform urban mobility in a sustainable manner.

Running head: BUSINESS INTEGRATION PROJECT
Business Integration Project
Name of the Student:
Name of the University:
Author Note:

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Abstract
The main aim of the assignment is to explain the issue faced by ride-sharing companies in China.
The issue is mainly theft and carelessness attitude of individuals who left their bikes anywhere
after riding the bicycles that disturbs local population as whole. The present segment explains
how Ofo can attain success in the long-term with the current operations they are dealing with
where they are helping riders to get bicycles to ride by using applications. Riding bicycles
considered as best exercise for individuals as compared to usage of any other transportation
facilities. Keeping this concept in mind, the Founder of Ofo Company had come out with this
ride-sharing business that benefits individuals to get access to bicycles by downloading the
applications and paying affordable prices. The study properly explains about how China is facing
issue with this type of industry (bike- sharing system) and how to overcome it within shorter
span of time. With the help of local government, it was decided to impose some strict rules
where the riders will be instructed to use the bicycles in a way that should not hamper the
residents.

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Table of Contents
Introduction......................................................................................................................................3
Identify issues in the topic...............................................................................................................3
Classification of aims of the report with the justification................................................................7
Clarification of theoretical context..................................................................................................7
Summary of the current situation....................................................................................................8
Evaluation and analysis...................................................................................................................9
Conclusion.....................................................................................................................................11
Recommendations..........................................................................................................................12
Reference List................................................................................................................................14

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Introduction
This business integration report had been designed to explain the issues that pertain to
bike-sharing business in China. This business integration report explains about company named
as Ofo that operates in transportation industry in China (Ofo. 2017). Ofo is one of the Beijing-
based bicycles sharing company that was founded in the year 2014. By the year 2017, the
company received funding of $450 million and 62.7 million active users.
This selection of the topic on sharing business in China was one of the interesting topics
that need to be reported and bring awareness among the public as well. The company even
decided to expand their operations in countries like Melbourne and Sydney by the year 2018.
The current segment highlights the problem with bicycle share riding in China and how far it had
negatively affected mindset of Chinese residents. To solve the existing problem, it is now
important to understand whether Ofo can succeed in long-term in profit generating activities. The
business report need to answer the question on whether Ofo has the ability to succeed in long-
term and for that main focus is on Chinese market as it can be understood from there the
existence of Ofo in this current marketplace. Ofo has 2.2 million bikes that are operating in 43
mainland cities (Zhang et al., 2015).
In this report, firstly the issue will be highlighted and then explain the main aim of the
report that will help the reader to connect to the story as a whole. The academic sources used in
the study is websites, books and journal papers that need to be evaluated with an in-depth
analysis and carry out to determine the issue and then arrive at conclusions from the analysis.

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Identify issues in the topic
The integrated report identifies the issue that need to be solved in the upcoming years.
The issue that is identified in the current report is problem with the bike-sharing companies to
the local residents who are suffering the issue on daily basis.
How Ofo can succeed in Long-term
The business question for this assignment is how Ofo can succeed in long-term. The
issues that can be identified from the business question is whether Ofo can actually attain success
rate in recent years where people are more concerned to drive cars, motorcycles or avail public
transport in China (Yu, de Jong & Dijkema, 2014).
Figure: “A group of volunteers in Beijing returning trapped and scratched shared bicycles
to more central locations”
(Source: Hernández, J. (2017)
The above article was published in New York Times recently where it is noted that
companies in China have emerged in the city where they are providing shared bikes to the

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individuals but they are just living the anywhere and everywhere without even thinking about
other local population. According to source, more than 16 million shared bicycles are on the road
in China. The issues that have questions are about sustainability actions of bike-sharing boom in
China. Even most of the Chinese people have given proper justifications about social decay as
well as slowdown of decorum and principles in the country. In most of the cities, it is noted that
supply of bicycles far exceeds the demand that brings chaos to sidewalks and prompts complain
that actually exceeds competiveness. In some of the places, the government authorities have even
impounded tens of thousands of bicycles as well as imposed parking restrictions. Furthermore,
news outlets have even recognized the waste with several astonishing images of mountains of
candy-colored bicycles that represents different bike-sharing companies.
Problem with bike-sharing companies
Even the technology management who is working in the so-called sharing financial
system as well as depends on revenue generating activities is included as more prominent critics.
The problem faced by the bike-sharing companies was that the bicycles were stolen from the
streets in small cities. Bike-sharing actually have been criticized because of vandalism as well as
theft issues. The constant cost need more bikes because there is increase in the user base. On
comparing it with ride sharing services, it permits individuals to make use of own cars when
driving customers as well as bike sharing need more ongoing capital investment in case of bike
that have life span of 2 to 3 years. There are several regulations designed to bring a check over
the problems of this ride-sharing business but still this industry faces major challenges in
performing the business activities in smoother ways in long run (Phys.org. 2017).

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Figure: “The bikes pictured belong to Ofo- one of the fast growing bike-sharing companies
in China”
(Source: Ofo. 2017)
Difficult to track stolen bicycles
The above article is published in BBC news recently where it explains how Chine bike-
sharing firms go bust after losing 90% of their bikes that went missing in the initial 5 months
(Ofo.2017). Ofo Company like most of the rival firms did not put GPS systems on their bikes
and that was the issue that made it difficult to track the stolen bicycles. These stolen bicycles are
the first bankruptcy case in the booming bike-sharing industry in China (Rode et al., 2017).
Problem faced by Government
The bike-sharing applications used by the individuals are convenient for them but the
industry is a reason for trouble among the local governments on daily basis. Some of the
problems that take place because of ride-sharing companies are illegal parking that is needs to be

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answered on urgent basis. For more than 20 years of time span, it is noted that China had turned
its automobile industry into a pillar industry. Recently, Chinese cities are built for convenience
of cars and very unfriendly for bikes. There are several bike-sharing problems where there is
absence of dock like means where bikes are parked carelessly by the rider anywhere and
everywhere (Ruan, Hang & Wang, 2014).

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Classification of aims of the report with the justification
The main aim of the report is to evaluate out whether Ofo can succeed in long-term or
not. This topic had been selected for the business report because bike-sharing is recent trend that
are adopted by most parts of the world but also come with certain disadvantage situation that are
mentioned in the problem statement (Sauvé, Bernard & Sloan, 2016).
Clarification of theoretical context
New bike-sharing system in China
As rightly put forward by South China Morning Post (2017), China is now initiating a
new bike-share system in most of the cities in and across the world but not everyone is thrilled to
know this. In order to rent a bike in China, individual just need a phone application and any of
the million of bicycles that are spread on sidewalks everywhere can be theirs. There is no proper
bike stand, no drop-off point. The individual need to scan a code, then ride, can leave and lock
the bike anywhere and whenever they feel like.
Convenience and lower cost bike-sharing to the users
The bike-sharing companies allow users to leave their bikes in public bike stands rather
than any of the specific locations (Stephany, 2015). Most of the Chinese bike-sharing companies
have become popular in China and are ready to enter Western markets because of convenience
and lower cost to the users. In order to improve in the level of safety, the Ministry of Transport
had recently issued guidelines after requesting Local governments for regulating bicycle as well
as traffic standards. According to this regulation, individuals will be punished if they park the

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bicycles outside of permitted areas or in that case vandalize the bikes. It is properly mentioned in
the guidelines that local government should be informed about how many bicycles are
distributed in and across the cities as well as encourage more companies to set up electronic
fences for corral bikes. The rules are made by the Government to protect both bike-sharing firms
as well as riders at the same time (Channel NewsAsia. 2017).
Initially, it was the taxi-hailing wars took place in different parts of world. And now it is
the on-demand service wards (Techinasia.com. 2017). Recently, the internet industry of China is
looking for another money-burning battle that unfolds between different rival start-ups. It is
noted from the past year figures that most of the undertaking capital business enterprise have
poured hundreds of millions of dollars into rival enterprise where all the competing to occupy the
topmost position. The problem is with widespread customer negligence as well as razor-thin
margins that make it difficult for the ride-sharing companies to succeed in the long run. There
are various factors that had even made ride-sharing services in China so convenient and these
factors are low prices as well as easy to use. The bike-sharing business model or the concept
overall is not new but Chinese start-ups have actually reinvented the theory in order to make it
work efficiently (Timmins, 2017).
Summary of the current situation
Currently, billion-dollar bike-sharing revolution in China had already transformed the
look as well as feel of cities in and across the country with more than 100 million application
downloads and billion of rides taken on many million bikes at the same time. Presently, this act
is going global (World Economic Forum. 2017). Recently, China had issued bike sharing
regulations for addressing the complaints of residents about annoyances as well as dangers those

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results from this emerging industry. The bike sharing business model used in China allows users
to find as well as unlock a shared bike that is near then and to drop the bike off in a public
location at a affordable budget rate. The new government rules are quite interesting to look at but
there are several challenges faced by these companies who operate in this sector.
Currently, there are an estimated 10 million shared bikes on the streets of China as well
as major Chinese bike-sharing companies have even received large amounts of venture capital
funding (Murray, Skene & Haynes, 2017). Some of the reputable investors like Alibaba, Didi as
well as Tencent and Softbank had shown interest to invest in the top two-biking sharing firms.
Even the Senior Executive of Didi had even joined Ofo Company. Most of the bike-sharing
schemes need bikes to be parked in selected docks when not in use. It is important to understand
or track the bikes to know the locations so that the riders can plan out the routes in advance
(CNBC. (2017). The bike-sharing companies in China actually allows their vehicles to be placed
anywhere in the city. These applications are developed by best-in-class engineers as it is GPS-
based applications that permit people to locate nearby bikes as well as charges are made on how
much time riders spend on them. It is noted that the bullish venture industrialist have funded for
this rapid growth that help companies who have plenty of cash to purchase bikes as well as make
them available on the streets (Nakamura & Abe, 2014).
Evaluation and analysis
On analysis, it is found that Chinese Company named as Ofo made its first foray into the
United States where they delivered more than 1000 bicycles to the streets of Seattle. The Ofo
Company is one of the main Chinese bicycle company that are on a breakneck race and willing
to expand in and across the globe (McCarthy, 2017).

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In countries like China, most of the investors are spending huge capital currently to a new
twist on an old of transport (bicycle). More investors are showing interest towards this new plan.
Here, two of the biggest players (Mobike and Ofo) had raised a combined $1.3 billion for this
new funding. These companies believe that one day this plan will bring trade to the United States
and many other countries in and across the world (Geissdoerfer et al., 2017).
Ofo is a major player in the China market where they are trying their best to disrupt
traditional bike-sharing programs and launch new services that benefit the society as a whole. It
is important to understand investor excitement about the companies as they can provide massive
scale of operations. Companies like Ofo recently can entire a combined 50 million rides per day.
With this figure, the company can boast or get access to more than 100 million registered users
that offer services in 100 cities as well as operates more than 12 million bicycles (Liu et al.,
2013).
Ofo Company is not only dedicated to produce their own bikes that have slim yellow
bodies as well as cost around 250 yuan (Geng, Sarkis & Ulgiati, 2016). This ride-sharing
company connects with the existing bikes to its network where the philosophy harkens back to
the formation of the company. Ofo bikes themselves are offline where the locations can be
tracked by using cell phones of users. It is then when the users can find a free bike and enter the
license plate number into their allocation as well as receive the bike lock combination. These
rides cost 1 yuan for an hour as well as deposit around 99 yuan (Larsen, 2013).
It is evaluated that viability of bike-sharing business models will last long-term as it far
from settled but recently it impact of the bikes in urban centres of China that is highly visible by
nature. Most of the cities such as Shanghai and Beijing, it is noted that the bikes can be seen

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everywhere. However the bike-rising companies such as Ofo has the ability to develop a real
community that comprises of loyal and dedicated users. Most of the users when asked about
these bike-sharing rides used the word convenient and cheap rides to describe the services (He et
al., 2017).
On analysis, it is found that bike-sharing would help in eliminating the issue of loss of
stolen bikes as well as offer users with transport facilities to and from public transportation. In
case of Ofo bikes, there are no docking stations and can be left anywhere that is not safe always.
There are more than 10 million users in China and it is still counting. The services provided by
Ofo Company are cheap as well as help users to share their own bicycles on the applications that
give them the contact to all the Ofo bikes nearby (Horwitz, 2017).
The bike-sharing companies have attained success till date but according to some of the
analysts, they actually fear that the bike-sharing business model does not make fiscal sense (Ofo.
2017). It is the companies who find difficulty to turn out this problem into a profit. The
companies face intense competition with each other where the market share between the bike-
sharing companies results in lower fees for bike rides as well as lower profits at the same time. It
is the investors who are not agreeing but Ofo Company looks ways for increasing its value all
over again by putting the worth of the company at $3 billion. There is even value present in the
data that can be assessed by GPS trackers on the bikes. This feature will help business enterprise
to target their products used by the riders as well as municipal authorities to plan out better city
layouts (Hernández, 2017).

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Conclusion
At the end of the study, it is concluded that Ofo has the ability to attain success in the
long-term irrespective of several challenges in the bike-sharing industry. This industry faces
challenges currently but has a scope where individuals will get convenient options to avail these
services when they need. Oyo currently has a fleet of more than 6 million little yellow bikes in
and across the world and the application users are 25 million trips per day. By the year 2018, the
CEO of Ofo Company expects to break-even this year and start earning a profit by next year. The
business model of bike-sharing company success rate has attracted reputed investors such as
Alibaba and Didi Chuxing. Ofo Company had raised more than $700 million for funding
purpose. The success of Ofo Company is part of the global bike-sharing boom in current years.
In countries like China, there are 6 major bike-sharing companies present and operating in the
same sector. Ofo should be like android. It is a known fact that bike-sharing business enterprise
are facing pushback and some even look at the sheer number of bikes on the streets as a public
nuisance. Ofo Company is therefore working with a local bike-sharing business named as Qibei.
Most of the people who reside in China make use of Ofo applications to scan as well as unlock
bikes of Qibei.
Recommendations
The company actually believes in developing the user experience as it is the main key to
achievement by including or adding GPS to the bikes for tracking the location as well as
changing the tyres to make them sturdier. The company wants to make the world better by
solving the environmental issues and traffic jams and bring healthy as well as green lifestyle for
the riders and individuals based in China. As bike-sharing start-ups in China are enjoying

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surging expansion, it will be easy for a well-established Ofo to get success in long-term. It is
recommended to Ofo Company for investing more money on market research as that will help in
understanding the viewpoint, preferences and attitudes towards using bicycles as their
transportation medium. After understanding the need, the company should make the application
easy to use where each individual can have access to demand for a bicycle at any point of time.
Users of this Ofo company should be allowed to download an application by using their
smartphones and this even help in locating and unlocking a nearby bike. The Ofo Company
should provide the service available to the user at cheaper prices so that all users can make
maximum use of this transportation medium. The user should charge for a time span. There is a
need for such kind of plan in future where Ofo Company can easily help the younger generation
to use this bicycle as it is good for heath and lead to solve most of the diseases. It is known that
bicycle is one of the best forms of exercise and when individual can avail at cheaper and easily,
then all will surely avail these services and that will lead to generate revenue for Ofo. Promotion
is important for this kind of bike sharing companies and they can promote by saying that by
using bicycles, it will help in reductions in carbon emissions as well as improvements in traffic.
In order to solve the problem, it is recommended that the company should provide cash or
credit rewards to users who are hiring these bikes in the hope that they will end up somewhere
more accessible. The company should even plan for expansion and launch the same scheme in
Cambridge in the UK.
Countries like China have come out with strategies where they are offering bikes to
customers for reasonable prices and this act are actually good for environment. It will help in
reducing carbon emissions as well as offer valuable first or last mile transport for bridging the

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gaps in a commute by train or subway. Countries like China leads the world in bike-sharing
schemes as mentioned in Financial Times. The bike-sharing problems can be solved if there are
increased regulations by City Authorities and extra costs should be incurred for the bike
companies to recover the bikes.

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