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Chinese Bike-sharing Platform Targets Last-mile Transport in Southeast Asia

ofo wants to help millions of people make short journeys in their cities convenient and affordable

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BY Ezra Ferraz - 24 Nov 2017

PHOTO CREDIT: Getty Images

Though you might assume bike-sharing platform and Chinese unicorn ofo chooses its cities for expansion based on their existing bike cultures, the company chooses to look at another metric: heavy traffic.

The three markets that ofo operates in across Southeast Asia — Singapore, Malaysia, and Thailand — all regularly face severe gridlock on their roads.

Alan Jiang, ofo’s Head of Southeast Asia, shared that the Global Traffic Scorecard tallied Thailand drivers as spending 64.1 hours per year stuck in traffic, while drivers in Singapore clocked in at 10.5 hours. Drivers in Kuala Lumpur also spent 1.2 billion liters of fuel in traffic, which amounts roughly to 2% of their GDP, according to a 2015 World Bank report.

“With traffic congestion ranking high in these countries, ofo hopes to complement the urban transportation infrastructure, lower carbon emissions, promote the shared economy culture, and help millions of people make short journeys in their cities convenient and affordable,” Jiang says.

In partnership with the China Academy of Transportation Sciences and the Laboratory of Advanced Public Transportation Science, they found that every kilometer traveled by ofo users reduced carbon emissions by 0.27 kilograms on average. Since ofo users have traveled over 50 million kilometers collectively, they have lowered aggregate carbon emissions by an estimated 13,500 tons.

For ofo to make an even greater impact, the company has to strengthen, if not create, the bike-sharing culture across Southeast Asia. The biggest impediment to this goal is what Jiang calls the infrastructure maturity of the region.

“More often than not, we observe that Southeast Asian countries’ city planning did not account for a car-lite transportation system, with cycling serving as a mode of first and last mile transport, hence, there is a critical need to break this initial hurdle by mapping bike lanes and parking zones for our users,” he says.

ofo is taking a localized approach to this issue. They are working with the appropriate government agencies to do everything from educating new bicyclists on responsible biking practices to identifying and demarcating designated parking areas to facilitate the implementation of ofo’s geo-fencing system.

In Singapore alone, they’ve created more than 400 parking zones in collaboration with the Land Transport Authority (LTA), which not only provides users with parking convenience but also tackles the issue of indiscriminate parking.

ofo’s target market are people who want to make a short trip in the range of 1 to 3 kilometers, and less often, users who want to take longer trips, particularly for exercise. To make it as quick and convenient as possible for these target users, ofo makes regular updates for both the software side and hardware side of their platform.

For software, ofo leverages user data to cater their operational strategy toward areas of high usage.

As for hardware, Jiang says, “We are also aware of the dangers of night cycling, and to ensure the safety of all ofo users, our bikes are equipped with LED front lights and solar powered back lights to maintain visibility for our riders.”

Globally, ofo has over 200 million users, connecting more than 10 million bikes in over 200 cities spread across 18 countries. Jiang says consumer adoption of ofo in Southeast Asia as measured via app downloads and sign-ups is also high.  

“In line with our mission to reduce carbon emission and traffic congestion for the greater good of everyone, we are encouraged by the numbers and the positive environmental impact that bike-sharing will provide for the cities in the long run,” Jiang says.

Jiang has the unique perspective of working for two flagship companies in the sharing economy — first with Uber, and now with ofo.

“The sharing economy is a unique and extremely fragmented industry where it is a constant battle for you to gain market share across the industry before your competitors do, localizing your key messages to fit the multiple cultures and languages, navigating unique political environments, connecting with local business contacts, and recruiting for a local team,” he says.

Despite how fierce competition can become in the sharing-economy, Jiang is confident that the region will be transformed by the industry.

“Building a start-up is a grueling journey, but I think Southeast Asian start-ups have huge potential and I am extremely bullish on the region. In the words of Nelson Mandela, ‘It always seems impossible until it’s done,’” he says.