Bicycle-sharing might cost more with new LTA rules kicking in

Cheap things come at a social cost.

Joshua Lee | June 27, 2018, 04:39 PM

Price hikes might be on the way for bicycle-sharing users.

Higher costs?

Mobike and ofo recently increased rental prices for using their bicycle-sharing service.

It is their attempt at weaning Singaporeans off the "discounted introductory prices" dangled to attract users initially.

And further hikes can possibly kick in after the July 7 deadline set by the Land Transport Authority (LTA) for bike-sharing firms to submit applications for a licence to operate in public places or cease operations.

Those who submit them will have their applications evaluated and licence awarded by September.

Operating according to the bike-sharing operations licensing framework will then be a costlier affair and these costs might be passed on to riders.

What is this licensing framework?

The new licence, which is part of the Parking Spaces (Amendment) bill, sets out a bunch of conditions that bike-sharing companies have to follow if they want to operate in Singapore.

Licensing conditions include making sure bicycles are in working condition, parked properly, and enforcing a blanket ban on recalcitrant users.

Current bike sharing companies will also have to downsize their fleet. With 100,000 dockless bicycles in Singapore, only half of them are in use at any one time.

Bike-sharing firms will also have to share data about users with one another.

Recalcitrant users who don't park properly can be banned for up to a year and can be charged for as long as the bicycle they used is not parked properly at the designated area.

Syncing the various platforms and abiding by new rules, such as the scanning of QR codes to proof a bicycle has been parked properly, will require resources.

Licensing framework already killed two operators

Ever since LTA set the July 7 deadline for licence applications two months ago, two operators, GBike and oBike, have opted to exit the market.

oBike ceased operations on June 25, 2018 while GBike will stop on July 7, 2018.

While GBike did not provide reasons for its exit, oBike's statement mentioned that its decision was a result of "difficulties foreseen to be experienced to fulfil the new requirements and guidelines released by Land Transport Authority (LTA)":

"oBike is announcing its decision to cease operation in Singapore as a result of difficulties foreseen to be experienced to fulfil the new requirements and guidelines released by Land Transport Authority(LTA) towards dock-less bicycle sharing in Singapore. oBike strongly believes and is committed to provide dock-less bicycle sharing service that would benefit users’ commuting and Singapore’s transportation system, however it is with regret that the new regulation measures do not favour this belief of ours. This decision will not affect oBike’s operation in anyway in countries outside of Singapore."

To date, there are five bike-sharing companies left: ofo, Mobike, Anywheel, SG Bike, and ShareBikeSG.

Another price hike soon?

Moving on, while LTA's regulations will definitely make bike-sharing a more pleasant experience for all Singaporeans, riders might feel the pinch soon.

This is so as the new regulations require companies to commit a lot of resources to fulfil them.

Judging from the competitive pricing wars between the major players in the past year, bike-sharing companies might not have the financial wherewithal to do so over time, while maintaining cheap rides.

Riders would then have to bear the costs.

Most tellingly, the General Manager of oBike, Tim Phang, told Today in March 2018 that the licensing regime "places a heavy (financial) burden on start-ups, which in turn means that bike-sharing users will suffer".


Operators unable to provide estimated costs

In response to Mothership queries, AnyWheel and SG Bike were unable to provide the estimated costs required to fulfil the licensing conditions.

However, AnyWheel said it is looking into implementing a subscription-based plan if their fleet quota allows for it.

Separately, SG Bike is planning to charge users an extra "rental" fee if they do not park the bicycles in designated zones.

Both said that they do not intend to raise prices for the time being.

Mobike, ofo, and ShareBikeSG did not respond to requests for comments on whether they will be raising prices in the future.

Guess we'll just have to wait until after July to see if all these outfits manage to survive legislation.

Top image by Joshua Lee