New rules lock Ofo out of Chicago; bike-sharing firm to focus on refining operation in growing markets including Singapore

Children use an Ofo bike in a village on the outskirts of Beijing, China.
Children use an Ofo bike in a village on the outskirts of Beijing, China.PHOTO: REUTERS

BEIJING (CHINA DAILY/ASIA NEWS NETWORK) - Chinese bicycle-sharing titan Ofo has announced it is pulling its bikes out of Chicago, as the city raised the cap for the company's type of dockless shared bikes.

The Beijing-based company, which operated 50 wheel-lock-only shared bikes when the city's dockless shared bike pilot programme was launched in early May, said on Monday (July 9) that it is dropping out in response to the updated locking requirements.

The city authorities changed the guidelines at the end of June to allow companies to deploy 350 lock-to bikes, which have the ability to lock to a fixed object after use. Ofo's shared bikes lack the lock-to ability and can be parked anywhere with the wheel lock.

The new requirement allows Ofo and other vendors with wheel-lock-only cycles to continue to operate 50 bikes each. But they are not allowed to add more bikes without lock-to technology.

"It's been a pleasure serving the Far South Side over the past two months, but unfortunately the city's restrictive regulations have made it impossible for us to continue providing our more accessible and convenient transit option," Ofo said in a statement.

"We will continue to work with city officials and hope to one day again offer affordable mobility solutions to everyone across Chicago."

Locked in a fierce battle in the domestic market with its arch rival Beijing Mobike Technology, Ofo has geared up its global expansion during the past year.

 
 
 
 

"Our rapid expansion last year gave us the opportunity to better understand the international business. Our focus now is on our priority markets and moving towards profitability. We are communicating with our local markets about our plans to move forward," Ofo told China Daily.

Ofo said its founder and chief executive Dai Wei will be directly responsible for overseas business, and the company will shift its focus from rapid market expansion to refined management and operation in fast-growing foreign markets, including Singapore, the United States and France.

Analyst Bao Jun at market research company iResearch Consulting Group said the overseas business will help bike-sharing firms to generate high cash flow. "Compared to China's cutthroat bike-sharing industry, companies enjoy a less competitive environment in overseas markets, which will help generate better cash flow. However, they also need to be aware of regulatory challenges in overseas markets."

Currently, Ofo has deployed more than 14 million bikes and has around 250 million users, covering over 250 cities in 22 nations across the globe. It has provided more than 32 million rides per day, according to figures from the company.