Bike-sharing service operators are locking horns with each other as the service catches on with consumers.
Firms participating in the Bicycle City Expo 2018 that kicked off Tuesday in Tokyo said competition is expected to become more heated in the coming years. At the same time, they expressed hope the market will grow.
A number of firms have made forays into the Japanese bike-sharing business over the past year, including Mercari Inc., a Tokyo-based flea-market app operator, and Chinese bike-sharing giants Ofo and Mobike.
“Perhaps only about half of current service operators will be able to survive” once the competition settles, Kaito Kotake, who heads Ocean Blue Smart Co., said during the two-day expo that this year drew 89 firms and organizations.
Kotake’s Tokyo-based startup launched a bike-sharing service in January in Itabashi Ward.
“A key is that we won’t just become a provider of bike-sharing infrastructure,” said Kotake, adding that giving customers something extra will be essential.
For instance, he said his startup plans to give information on local areas, such as eateries and tourism spots, to users through its app so they can discover new things whenever they ride a shared bike.
Takashi Shimizu, director of Docomo Bikeshare Inc., the largest bike-sharing operator in Tokyo, indicated that the real competition hasn’t even started.
This is because companies have so far chosen areas that have yet to be put on the bike-sharing map. They’re trying to carve out their own territory rather than going head to head, he said.
Docomo Bikeshare, which is part of NTT Docomo Inc., the nation’s largest cellphone carrier, had 340,000 users with 7,300 bikes and 700 parking stations nationwide as of March. The firm has been operating a bike-sharing business since 2011 and now operates in 10 Tokyo wards.
Mercari has been focusing on the city of Fukuoka, while Mobike launched its services in Sapporo. Ofo started in the cities of Wakayama, Kitakyushu and Otsu, Shiga Prefecture.
Yusuke Yamanaka, PR manager at Ofo Japan, said the company aims to eventually widen its service nationwide but is now focusing on areas where there is a need and where it can team up with municipalities.
Since Ofo is operating its bike-sharing business in 22 countries, one of its strengths is that inbound tourists can use their local accounts to get a bike in Japan. This also applies to potential Japanese users who frequently travel overseas.
To get ahead of their rivals, improving cost competitiveness is critical, but bike-sharing operators face numerous financial burdens, such as having to dispatch workers to replace batteries on electric bicycles and move bikes from crowded parking stations to uncrowded ones.
“From our experience of running a service, this is the most costly part” said Hajime Kimura, director at Yokohama-based company called Yoho, which produces bicycles and parking management systems.
At the expo, it was displaying a wireless battery charger for e-bicycles that could cut the cost of human workers who until now have had to manually swap out dead batteries.
“Many customers have also complained that there were no batteries when they wanted to hire a bike,” so the wireless system can solve this problem as well, said Kimura, who also predicts tougher competition ahead as an increasing number of players enter the fray.
But Hiroshi Hirao, a veteran of the bike-sharing industry who founded Kanagawa-based Pedal Ltd., is more optimistic.
Pedal has been producing bikes and parking management systems since it was launched in 2009.
At that time, bike sharing received little public attention and there were just a handful of players.
“It would be quite tough if the market size doesn’t change despite the growing number of competitors,” Hirao said. “But the market continues to expand so there are still opportunities even though we are seeing more rivals.”