Sharing Economy Sees Rapid Growth in China

[TaiShang]

Bike-sharing boom reinvigorates manufacturers
Xinhua, March 3, 2017

Bike-sharing boom reinvigorates manufacturers [Photo/Xinhua]

China's bicycle manufacturers are poised for a resurgence thanks to the booming bike-sharing industry.

The once dominant two-wheelers have given way to cars in recent years due to China's rising middle class. However, new bike-sharing services allow commuters to escape traffic gridlock and public transit for as little as 1 yuan (about 0.15 U.S. dollar) per hour. Users can unlock bicycles with a mobile app and drop them off anywhere for the next customer.

In the past couple of years, 29 brands have sprung up, placing more than 3 million bicycles on streets around the country and wrestling for domestic market share. Demand in China is estimated at around 20 million bikes, according to Liu Xuequan, who heads the association of the bike industry in Tianjin, the country's largest bicycle manufacturing base.

New boost

"The new business has given a push to a group of traditional bike manufacturers," Liu said.

A report from Beijing-based BigData Research showed the number of shared bicycle users exceeded 18 million as of the end of 2016 and is expected to approach 50 million by the end of this year.

"When there were no bike-sharing services, we had peak and slack seasons in production. But now, we are busy all year round," said Zhang Jinying, an executive with the Tianjin-based manufacturer Flying Pigeon, a supplier for bike-sharing service Ofo.

Four Flying Pigeon factories are scheduled to produce 900,000 bikes in March, with half of the orders from bike-sharing start-ups, Zhang said, adding that the manufacturer is working to expand production capacity and hire more workers due to ever-increasing orders.

The production standard for shared bikes is higher than for ordinary ones, since shared bikes require better endurance of some parts, according to Zhao Kun, an R&D director at Flying Pigeon.

A bicycle's service life is around two years if five users ride it each day. That may lead to 10 million bikes that need repairs per year, creating a new market for manufacturers to compete for, according to Liu Xuequan.

Management headache

Fleets of brightly-colored shared bikes are becoming ubiquitous in big cities like Beijing and Shanghai.

They have also secured backing from the government. China's Minister of Transport Li Xiaopeng said in late February that bike sharing is innovative and should be encouraged and supported.

However, problems have arisen when users park bikes haphazardly, tarnishing the city's image and blocking traffic.

There have been a number of news reports of angry business owners or security guards who have damaged the bikes or stacked them up because the jumbled vehicles had affected their work.

In late November, urban management officers in Chengdu City, capital of southwest China's Sichuan Province, confiscated nearly 200 shared bikes because they violated the city's parking regulations. A similar seizure was reported in Hangzhou City, capital of east China's Zhejiang Province, in December.

Some bikes have been damaged by drivers of motorbike taxis and electric tricycles because bike-sharing has taken away their passengers. Vandals and ill-behaved bike users have also caused trouble.

A set of photos that have gone viral have exposed such acts: abandoning bikes in a river, inserting needles into the saddle, and destroying QR codes in order to steal bikes.

In one photo, a yellow bike was reduced to its basic frame after being stripped of most of its parts, with a caption saying "Well, no problem, it is for 'sharing.'"

Such vandalism has prompted police intervention. On Feb. 28, Chengdu police detained a man who ran a traditional bike rental business for burning and burying more than 10 shared bikes from various brands two days earlier.

Liu Xuequan disclosed that manufacturers are working on technical upgrades to prevent bikes from being dismantled or stolen.

Ofo founder and CEO Dai Wei said bike misuse has not created a notable loss for the company.

"During the past three months, 'inactive bikes,' which means they might have been damaged or taken home, only accounted for 1 percent of the total," he said, while calling all users to treat the vehicles nicely.

Ofo has hired workers to ensure the bikes are returned in good condition and parked properly. Rival Mobike has enlisted its users to help track down lost bikes and maintain orderly parking. Some local governments have rolled out rules to regulate parking.

Minister Li Xiaopeng said it requires joint efforts from the government, service providers and customers to maintain smooth rides for shared bikes.

 

[adil_minhas]

China makes lovely bikes.

My current ride is almost 98% (except for the tyres and tubes which have now been replaced) Chinese built and made.

Light (13.7 kilos), good aggressive race geometry, and basic but good quality gear components from Shimano, with alloy pedals and alloy double walled aero rims.

Its imported into India and sold under the Chennai giant TI Cycles brand name.

 

[Mista]

China has been a collectivist society for thousands of years which promotes the public over self. I don't see that changing anytime soon. The Chinese also likes dynamism and lively places.

Moreover we are entering into the sharing economy now, where you own nothing and have access to everything. Apps such as Uber, Grab, and Airbnb are on the rise and more are coming up. China has their own version of those apps. In a sharing economy, resources are used much more efficiently. Many things that we currently own are actually unproductive most of the time. For example, cars are parked in the parking lot most of the time instead of moving in the road. We could cut down the number of parking lots if cars are used more efficiently. The sharing economy will allow us to reduce ecological footprints dramatically. Why do you need to own a wedding gown if you are going to wear it only once (hopefully )?

Economies of scale in sharing is going to make renting cheaper in the future. However, a certain level of density is required for this to happen. I think the reason why the sharing economy is working better in China than in the West is because of density and being more open to the concept of sharing resources.

 

[Hamartia Antidote]

China has been a collectivist society for thousands of years which promotes the public over self. I don't see that changing anytime soon. The Chinese also likes dynamism and lively places.

Moreover we are entering into the sharing economy now, where you own nothing and have access to everything. Apps such as Uber, Grab, and Airbnb are on the rise and more are coming up. China has their own version of those apps. In a sharing economy, resources are used much more efficiently. Many things that we currently own are actually unproductive most of the time. For example, cars are parked in the parking lot most of the time instead of moving in the road. We could cut down the number of parking lots if cars are used more efficiently. The sharing economy will allow us to reduce ecological footprints dramatically. Why do you need to own a wedding gown if you are going to wear it only once (hopefully )?

Economies of scale in sharing is going to make renting cheaper in the future. However, a certain level of density is required for this to happen. I think the reason why the sharing economy is working better in China than in the West is because of density and being more open to the concept of sharing resources.

Good insight but the reality is there are plenty of Asians who were born in China (and BTW that includes my wife who was the one who picked out our house) who also happily live in the suburbs. When people achieve a certain level of financial comfort they may start morphing their ways. Obviously these people declined living in the lively Chinatown section of downtown Boston. I would expect China may see something similar or maybe these people are simply the 1% who didn't fit into the norms and that is why they left in the first place.

People morphed from rural -> urban -> suburban -> ?

As for the sharing of cars that will probably be the norm in the future for many people as autonomous cars are going to be required to be more mechanically and technologically sophisticated to be allowed to drive freely on all roads. This will push the cost out of reach for segments of the population and force them to share.

 

[shadows888]

Good insight but the reality is there are plenty of Asians who were born in China (and BTW that includes my wife who was the one who picked out our house) who also happily live in the suburbs. When people achieve a certain level of financial comfort they may start morphing their ways. Obviously these people declined living in the lively Chinatown section of downtown Boston. I would expect China may see something similar or maybe these people are simply the 1% who didn't fit into the norms and that is why they left in the first place.

People morphed from rural -> urban -> suburban -> ?

As for the sharing of cars that will probably be the norm in the future for many people as autonomous cars are going to be required to be more mechanically and technologically sophisticated to be allowed to drive freely on all roads. This will push the cost out of reach for segments of the population and force them to share.

There are not enough resources around the world for everyone to live on american levels of consumption, a lot of which is pretty wasteful. For countries such as China and India, there's no choice but to pick more efficient routes. and that means high-rises and not everyone having a car.. you probability are correct that your wife is simply the 1% who didn't fit, otherwise she would of married another Chinese, not some american in the burbs.

There will always be segments of the population that can't deal with the city and move to suburbs but it won't change the equation that majority of economic activity will still take place in the cities.

I don't think autonomous cars is going to cost all that much more than the cars now. once technology improves, it gets cheaper. Tesla already have autonomous cars and they don't cost than audi's and bmw etc. for similar classes.

 

[Mista]

Good insight but the reality is there are plenty of Asians who were born in China (and BTW that includes my wife who was the one who picked out our house) who also happily live in the suburbs. When people achieve a certain level of financial comfort they may start morphing their ways. Obviously these people declined living in the lively Chinatown section of downtown Boston. I would expect China may see something similar or maybe these people are simply the 1% who didn't fit into the norms and that is why they left in the first place.

People morphed from rural -> urban -> suburban -> ?

As for the sharing of cars that will probably be the norm in the future for many people as autonomous cars are going to be required to be more mechanically and technologically sophisticated to be allowed to drive freely on all roads. This will push the cost out of reach for segments of the population and force them to share.

Of course if you are wealthy enough you would rather own such things than sharing resources with other people, whether you are Chinese or American. They can own such resources and yet live in the urban area.

But for the average people, how receptive are you to sharing public resources and common spaces with strangers? Would you think sharing of common spaces (parks, gardens, playgrounds) is a significant decline in standard of living, or do you think it's not worth the trouble to move into a rural area just to own personal spaces?

City's are designed for the average people in mind and for maximum efficiency possible. That's a big factor how different cities are shaped across different cultures.

 

[Hamartia Antidote]

Of course if you are wealthy enough you would rather own such things than sharing resources with other people, whether you are Chinese or American. They can own such resources and yet live in the urban area.

But for the average people, how receptive are you to sharing public resources and common spaces with strangers? Would you think sharing of common spaces (parks, gardens, playgrounds) is a significant decline in standard of living, or do you think it's not worth the trouble to move into a rural area just to own personal spaces?

You are misunderstanding things. The suburbs also have parks and playgrounds which are probably larger than the average neighborhood city ones. They have room for tracks, multiple soccer fields, multiple tennis and basketball courts, ice skating rinks, etc. People make good use of them. As for the homes, since you probably have the room, you can add a pool, a half-court basketball surface, a playground slide/swingset contraption, or even your own garden. You don't have to but you are given the opportunity. If when looking at the "big picture" could adding these be considered an inefficient use of resources...sure.

The people living in the suburbs are not all rich. Some suburbs of course are far far nicer than others. Just as people upgrade to better locations in a city...people upgrade to a better suburb. You'll have suburbs with a median income 3 times higher than the ones right next to it.

or do you think it's not worth the trouble to move into a rural area just to own personal spaces?

Hmm...the suburbs are not really considered rural. Generally a city has subdivided/zoned its area into chunks to maximize the usage of land to support an increase in population density. So buildings tend to be higher with more people per kilometer. The suburbs are the areas outside the city line. These areas may not have implemented rules to increase their population density. In fact the opposite is more likely to be true. They may implement rules to restrict population density by restricting apartment building. They may divide their area up and require only related people to live on each piece and only one building. Forcing single households on each parcel. If they want to attract wealthier people then instead of dividing the area into small pieces they make the pieces 3 times bigger and force people to pay 3 times the amount you would in another town. Some towns may make it 10 or 20 times the amount or make you pay a higher fee per year to live there (these rules are usually voted in by the current town residents so they aren't going to implement crazy things the majority doesn't want). Further out beyond these places are the rural areas. Usually a city was an area that used to have town sized parcels but over time has subdivided them smaller and smaller and implemented zoning rules to increase population density. The surrounding areas considered to be the suburbs have not subdivided their parcel sizes as much.

So theoretically a major company could be located 1km within the edge of a city line. Say I live in a suburb right over the line with a 0.5 hectare minimum property size. My commute time will be shorter than the vast majority of the city residents. Of course the closer the building is to the center of the city (or the oceanfront) the longer my commute will be.

 

[ahojunk]

China’s bike-sharing industry braces for explosive growth
By Qiang Wei (People's Daily) 14:07, March 05, 2017

China’s bike-sharing industry has embraced an explosive growth since last year. Data showed that by the end of last year, millions of bikes offered by over 20 bike-sharing companies have expanded their service to nearly 19 million users.

The bike-sharing service enables users to find, unlock and pay to rent the bicycles through a smartphone app. Mobike and Ofo are among the two largest of a growing crop of private bike-sharing operators.

Ofo, the company behind the yellow two-wheelers, announced on 1st March that it has raised 3.1 billion yuan ($450 million) in a fresh round of funding. It not only represents the largest single deal in terms of fund raised by a bike-sharing firm, but also swells the firm to the industry’s richest unicorn, a start-up company valued at over 1 billion dollars.

Shared bikes are lined up outside a subway entrance in CBD in Beijing.
(Photo by Qiang Wei fromPeople’s Daily)​

Public bike is not a fresh thing. Many Chinese cities have launched public bikes previously to meet the citizens’ demands for the “last mile” of public transportation, but congested public space and complicated procedures restrained the pace of such efforts.

Unlike the services provided by local governments, users of the newly emerging shared bikes like Orange-hued Mobike can find and pay for bicycles via a smartphone app and then leave them wherever they want. The location of the bike will be recorded by the data platforms, so that the next users can find one easily.

The economical and convenient service also responds to China’s call for green, energy-saving transportation, attracting a host of fans due to its convenience and low price.

These bikes, a combination of sharing-economy, high-technology and market demands, also provide the outside world a glimpse into China’s huge potential in sharing economy.

PwC’s projections show that five key sharing sectors—travel, car sharing, finance, staffing, and music and video streaming — have the potential to increase global revenues to around 335 billion dollars by 2025, over 20 times higher than the number in 2016.

The latest report released by McKinsey & Company on China’s sharing economy revealed that shared transportation is gaining wide popularity in the Chinese market, while office space and technology sharing is rising.

So far, China’s sharing economy is applied in transportation, office space, skills and finance, while segment fields including car-hailing, bike-sharing, car-sharing and apartment-renting are growing in a faster pace.


********

Could be Chinese culture, they don't have problems with the sharing economy.
.

 

[gambit]

Moreover we are entering into the sharing economy now, where you own nothing and have access to everything. Apps such as Uber, Grab, and Airbnb are on the rise and more are coming up.

We tried that. It is called 'communism' and it did not worked.

Uber does not own anything in the truly possessive sense. Uber gives you access to PRIVATE PROPERTY.

Not only that, of those private properties -- cars -- each have an OWNER, someone who exercises %99.999 of authority over that car.

Then each owner CHOSE to let you or me of Senor Joe Schmoe access to said private property.

The 'sharing economy' is essentially an illusion. But even if we grant that such an economy does exist, the foundation of that economy is still capitalism and ownership of private property.

Why do you need to own a wedding gown if you are going to wear it only once (hopefully )?

The foundation of liberty is not 'need' but 'want'.

In order to have economic growth, you must allow 'want', and not merely meeting 'need'.

Economies of scale in sharing is going to make renting cheaper in the future. However, a certain level of density is required for this to happen. I think the reason why the sharing economy is working better in China than in the West is because of density and being more open to the concept of sharing resources.

But not without expecting and demanding of something -- such as money -- in return.

 

[gambit]

There are not enough resources around the world for everyone to live on american levels of consumption, a lot of which is pretty wasteful.

This is a loaded statement.

Assume resource X.

There are two ways you can be 'wasteful' regarding X.

First...Assume X is finite. Then assume somehow you have better access to X better than anyone else. In this case, you can afford to be wasteful of X than others.

Second...Assume that even though X is finite, there are less of people who can access X. This means that EVERYONE, not just you, can be wasteful of X.

In the first case, you may have more money and therefore can afford to buy more X, hence, be more wasteful of X.

In the second case, it does not matter if you have more money than everyone else. There is so plentiful of X -- in ratio to users of X -- that it make wealth irrelevant.

Now let us change X to land.

Countries A and B are geographically identical in area size. The difference is that A is mainly -- over %50 -- flat land while B is mainly -- over %50 -- mountainous.

We all know that mountainous living is much harder. Terrace (tiered) farming is more laborious, water, and time consuming.

This make A inherently -- potentially -- wealthier than B.

Assume that peoples A and B are equally industrious.

Which type of land -- flat (A) or mountainous (B) -- is easier to build a factory ? Of course it is A. Not only that, because A is mostly flatland, you can build more factories in faster time than you could in mountainous B.

The flaw in your statement is in the word 'enough', implying finite resource of X.

Rather, instead of 'enough', the correct word is 'type'. The American midwest is just as flat as Saudi Arabian desert, but which is more fertile and therefore productive to the point of ALLOWING the people to be wasteful ?

If I overcooked my steak and threw it away, being wasteful, I did not take meat from a poor man from anywhere else in the world. Americans are wasteful because our geography, ideological and political foundations, and economic philosophy made it possible, and some have argued inevitable, to be wasteful.

The US and China are geographically identical in area sizes, but China have less arable land as the US, and the US is at a lower latitude than China, making the US the superior farming country.

http://www.card.iastate.edu/ag_policy_review/display.aspx?id=40

...the population of agricultural producers in China is 75 times larger than the United States, but China has less than half the arable land available for farming.

On the one hand, farming encourages settlement, a move away from the hunter-gatherer nomadic lifestyle, but on the other hand, precisely because farming demands large tracts of land, farming also encourages expansion of territories. Note that there is a difference between mere 'land' and the more possessive 'territory'. That expansion encourages diffusion, the opposite of concentration.

If Americans are wasteful, it is not in our individual human character traits. An American family can be conscious about recycling aluminum and plastics and yet can still be wasteful in many other aspects of living. Rather, if Americans as a whole is 'wasteful', it is because for the past 200+ yrs the land allowed US to be so.

Recently, a Chinese member boasted -- to me -- that his Beijing apartment is worth more than my entire wealth. He crowed that his Beijing apartment is valued at $2+ mils. I damned near spewed beer at my monitor in laughing from reading his post. The man does not realize he is living in -- little better than -- a prison cell.

People talked about how much more ecologically sound in living in such tight close quarters. That elevator that took the grocer from ground zero to level 50 runs on unicorn farts ? Maybe is it possible that my Jeep Grand Cherokee burns as much dino-juice in one day as the Chinese skycrapers elevators burns in delivering passengers in that same day.

 

[shadows888]

This is a loaded statement.

Assume resource X.

There are two ways you can be 'wasteful' regarding X.

First...Assume X is finite. Then assume somehow you have better access to X better than anyone else. In this case, you can afford to be wasteful of X than others.

Second...Assume that even though X is finite, there are less of people who can access X. This means that EVERYONE, not just you, can be wasteful of X.

In the first case, you may have more money and therefore can afford to buy more X, hence, be more wasteful of X.

In the second case, it does not matter if you have more money than everyone else. There is so plentiful of X -- in ratio to users of X -- that it make wealth irrelevant.

Now let us change X to land.

Countries A and B are geographically identical in area size. The difference is that A is mainly -- over %50 -- flat land while B is mainly -- over %50 -- mountainous.

We all know that mountainous living is much harder. Terrace (tiered) farming is more laborious, water, and time consuming.

This make A inherently -- potentially -- wealthier than B.

Assume that peoples A and B are equally industrious.

Which type of land -- flat (A) or mountainous (B) -- is easier to build a factory ? Of course it is A. Not only that, because A is mostly flatland, you can build more factories in faster time than you could in mountainous B.

The flaw in your statement is in the word 'enough', implying finite resource of X.

Rather, instead of 'enough', the correct word is 'type'. The American midwest is just as flat as Saudi Arabian desert, but which is more fertile and therefore productive to the point of ALLOWING the people to be wasteful ?

If I overcooked my steak and threw it away, being wasteful, I did not take meat from a poor man from anywhere else in the world. Americans are wasteful because our geography, ideological and political foundations, and economic philosophy made it possible, and some have argued inevitable, to be wasteful.

The US and China are geographically identical in area sizes, but China have less arable land as the US, and the US is at a lower latitude than China, making the US the superior farming country.

http://www.card.iastate.edu/ag_policy_review/display.aspx?id=40

On the one hand, farming encourages settlement, a move away from the hunter-gatherer nomadic lifestyle, but on the other hand, precisely because farming demands large tracts of land, farming also encourages expansion of territories. Note that there is a difference between mere 'land' and the more possessive 'territory'. That expansion encourages diffusion, the opposite of concentration.

If Americans are wasteful, it is not in our individual human character traits. An American family can be conscious about recycling aluminum and plastics and yet can still be wasteful in many other aspects of living. Rather, if Americans as a whole is 'wasteful', it is because for the past 200+ yrs the land allowed US to be so.

Recently, a Chinese member boasted -- to me -- that his Beijing apartment is worth more than my entire wealth. He crowed that his Beijing apartment is valued at $2+ mils. I damned near spewed beer at my monitor in laughing from reading his post. The man does not realize he is living in -- little better than -- a prison cell.

People talked about how much more ecologically sound in living in such tight close quarters. That elevator that took the grocer from ground zero to level 50 runs on unicorn farts ? Maybe is it possible that my Jeep Grand Cherokee burns as much dino-juice in one day as the Chinese skycrapers elevators burns in delivering passengers in that same day.

what you type is the definition wasteful. umm grand cherokee lol. skycraper elevators use electric, not burn gas. you can keep your lifestyle but you will find yourself outnumbered in time.

 

[TaiShang]

I noticed that in China, in any place that a new sharing service is introduced, it catches up so quickly and often smoothly.

This is in part explained by the collectivist nature of the civilization-culture.

In other parts of the world, too, public sharing services are introduced. But only in China it really has a chance to become an industry by itself thanks to people's ready adaptation.

 

[shadows888]

I noticed that in China, in any place that a new sharing service is introduced, it catches up so quickly and often smoothly.

This is in part explained by the collectivist nature of the civilization-culture.

In other parts of the world, too, public sharing services are introduced. But only in China it really has a chance to become an industry by itself thanks to people's ready adaptation.

A very simple example is the bike sharing by mobile app. Leaving the bike anywhere without "set" stations. Works well in China, not so much in the USA.

 

[AndrewJin]

Over 50,000 bikes hired every day on average in Wuhan
2017-01-17 10:15 Xinhua | Editor: Xu Shanshan

A total of 40,000 bikes have been put into use at 2,000 public bike renting stations in Wuhan since it operated the service in April 2015. More than 50,000 bike rentals occur every day on average.

View attachment 369352
A woman rents a bike at a public bike renting station in Wuhan, capital of central China's Hubei Province, Jan. 16, 2017. (Xinhua/Xiong Qi)

View attachment 369353
People ride rented bikes at the East Lake in Wuhan, capital of central China's Hubei Province, Jan. 16, 2017.

View attachment 369355
A man rents a bike at a public bike renting station in Wuhan, capital of central China's Hubei Province, Jan. 16, 2017.

View attachment 369356
People rent bikes at a public bike renting station in Wuhan, capital of central China's Hubei Province, Jan. 16, 2017.

View attachment 369357
Riding a rented bike at the East Lake in Wuhan, capital of central China's Hubei Province, Jan. 16, 2017.

My parents now go there weekly, riding public bikes around the East Lake.

 

[gambit]

what you type is the definition wasteful. umm grand cherokee lol. skycraper elevators use electric, not burn gas. you can keep your lifestyle but you will find yourself outnumbered in time.

And electricity came from nothing ? No labor necessary to produce it ? Everyone walks to work to produce the resources necessary to produce electricity ?

The illusion that everyone owns everything and have access to anything without being responsible for those things have been tried and the venture failed. Someone have to own something in order to be a contributor to this sharing economy and that contribution must be VOLUNTARY. I know that the concept of 'voluntary' is alien to you being of the collectivist mindset, but you cannot force someone to be responsible for it and then have it accessible for everyone. Your China tried that. How did that worked out for China ?

You think that just because I have my own vehicle it means I do not know how to use Uber ?

A sharing economy works only when the resources that are put up for accessibility are in close proximity to each other to reduce access time. Try that for farming and see what happens. See your crop fails. Water wells untapped. Soil not tilled. Do you have any idea on what happens to a dairy cow if she is not milked periodically ? Look it up and see the gruesome effects on the poor animal.

You city slickers...

You think that just because an idea works in the city, it must be workable everywhere. Am neither a farmer nor rancher but I live close to enough of them to sympathize with their lifestyle.