Cost-free bike sharing: No such free ride, says transport economist

The pitfalls of bicycle sharing, which started in Amsterdam in 1965, are not exclusive to Singapore.

The hefty losses to vandalism and theft have been well documented in Paris, for example, where 80 per cent of a fleet of 20,600 bicycles had to be replaced within the first year.

Singapore's first scheme was launched by outdoor advertising company Capital City Posters in 2000. In 2003, insurer NTUC Income took over the scheme, but folded it four years later because of poor usage and losses.

The first dockless bike-share system - where users do not have to return a bicycle to a designated spot - was started in China in 2015. From the get-go, observers had highlighted the need for better regulation as operators flooded cities with millions of bikes, many of which sat unused, cluttering up public spaces.

The exact same thing happened in Singapore when operators arrived in 2017.

After the Land Transport Authority (LTA) imposed a licensing scheme in early 2018, many firms started pulling out. One major operator, oBike, was suspected of having transferred $10 million - consisting largely of users' deposits - out of Singapore when it left.

Singapore University of Social Sciences (SUSS) transport economist Walter Theseira said there was "a bigger story" behind the sudden exit of bike-sharing firms.

"It is an example of the failure of market forces to solve complex transport problems without proper oversight and regulation," he noted. "Shared bicycles have been useful as a first-and last-mile urban transport solution in many dense cities, but it has also long been known that they are expensive to operate and typically need sponsorship."

Associate Professor Theseira said the LTA was aware of this, but made the mistake of assuming that the private sector had a "genius solution of having shared bicycles pay for themselves through the deployment of dockless shared bicycles enabled by technology".

Hence the LTA allowed scores of foreign dockless bike-sharing firms to proliferate here in 2017, abandoning its own plans for a docked bike-sharing system here. "In reality, the shared bicycle companies were simply selling unrealistic dreams promising that technology would solve all of the well-known problems of shared bicycle deployment, such as difficulty in matching local demand and supply, poor utilisation, theft and maintenance, and so on," he said.

Investors, hungry for the next business disruption, were eager to write blank cheques, he observed.

The former Nominated Member of Parliament added: "The Government, happy to let private money and ideas solve a problem that otherwise would have required public funding, let shared-bicycle operators expand at will."

Prof Theseira said expectations of bike-sharing had been unrealistic. "Shared bicycles were fundamentally unprofitable in many areas," he said. "And there's a large public cost that had to be paid to improve public safety and order. There was also a large private cost because while these companies were here, they destroyed the livelihoods of traditional bicycle rental businesses, and some exited badly without paying stakeholders."

The lesson here, the transport expert reckons, is that "sometimes, there really is no free ride, no magic private-sector solution".

"Sometimes, it's better to assess the next trend more rigorously before jumping on it," he said. "Nonetheless, it is not realistic to expect that we have zero policy missteps in transport."

He suggests documenting the lessons learnt to benefit future policymakers.

"Unfortunately, the nature of things is that we have no problem writing books about Singapore's transport successes and plenty of problems writing even a chapter about our missteps," he said.