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The Failure of Bike-sharing Businesses and the Future of Sharing Economy

Originated from the Netherlands, bike-sharing services have developed rapidly over time in China. A few providers have also recently established their business in Hong Kong. Unfortunately, the prospect for bike share businesses doesn’t look good and some of them even shut down recently. What are the reasons that contribute to the failure of such a business model? This 3-minute read is going to offer you insights on the topic from a local perspective.

Users’ lack of self-discipline results in huge maintenance costs

From a pricing perspective, an hourly rental rate is up to only HKD10/ hour with an amount of deposit ranging from HKD99 to HKD399. The flexibility to finish using the service anytime, anywhere has undoubtedly made this service attractive to the time-strapped Hong Kong people. In fact, it’s easy to start a bike-sharing business; investors simply need to spend on the initial manufacturing of bikes and provide a regular amount of maintenance cost.  However, the lack of self-discipline and even the ‘destructiveness’ of Hong Kong users were pain points that investors have overlooked. In the end, bikes were parked indiscriminately at all kinds of inappropriate locations by the sidewalks and roads, under a tree or in the rivers by vandals. The lack of self-discipline by users and frequent vandalism have greatly increased the expected maintenance cost for the bike-share businesses. Here, we say goodbye to the bike-sharing fantasy.

Conflicts caused by insufficient bike facilities

Even before the bike-sharing businesses emerge in Hong Kong, complaints have been around for years about the inadequate bike lanes and illegal parking problems due to insufficient parking facilities. The lack of bike lanes and availabilities of other means of transportation refrain Hong Kong people from using bikes for daily commutes. Also, the inappropriately parked shared bikes have triggered complaints and resentment from local residents, resulting in vandalism against these companies. Such conflicts have made the bike-share business difficult to sustain.

While the local bike-share industry is going downhill, there’s the rise of another product of sharing economy: co-working spaces. In addition to work studios and traditional offices that are rented to companies and shops in Hong Kong, the trend of co-working space rental service is also on the rise.

Co-working spaces and the transformation of shops rental

The target customers of these co-working spaces include students from secondary schools and universities who need a suitable place to study. Young, self starting entrepreneurs are also another group of interest, as co-working spaces serve as a better alternative to less desirable environments such as the libraries and cafés. While study rooms and cafés might be too crowded and uncomfortable at times, co-working spaces experiment with different interior design ambiance to create a stylish shared space to suit the needs of users. One might find elegant European-style elements, Taiwanese simplistic youth art décor, or the chic modern American style in various spaces.

The difference between bike-sharing and co-working space business lies in the sustainability of latter, thanks to lower maintenance and the absence of conflicts. However, co-working space owners should be cautious about the rapid, overwhelming development of this market to avoid following the footsteps of bike-sharing business.

To conclude, since bikes are not a commuting necessity in Hong Kong, nor a luxury branded consumer good, it’s hard for such service providers to sustain. Just when Hong Kongers are saying goodbye to the bike-sharing services in the aftermath of countless destroyed bikes and ones that have been dumped into the water, here comes the emerging co-working spaces in Mong Kok for our exploration.

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