The bike-sharing industry in 2021 and beyond
August 26, 2021
min. read
The bike-sharing industry is on the rise. It is the only mobility industry that statistics indicate didn't experience significant losses during the pandemic. The future is also bright as there are government initiatives around the world to support bike-sharing. However, there are things that newcomers in the business can learn from the previous leaders - success in the industry with high demand is no guarantee that the company will be a success.
A bike is a comfortable means of transportation in regions where motorized vehicles are widely used but create heavy traffic jams and pollute the air. This is a problem in regions like Asia-Pacific, North America, and Europe. And this is where and why bike-sharing has become popular. According to the Statista Mobility Outlook, bike-sharing was the only mobility sector that grew its global revenues during the pandemic by a third in 2020. The single-person set-up and open-air nature of bike riding made it the perfect mode of transportation for the pandemic.
Bike-sharing is a shared transport service in which convectional bikes or electric bikes are made available for shared use to individuals on a short-term basis for a price or free. Development of software, GPS technologies, mobile payments, and IoT devices, as well as reduced locking and tracking system costs for bikes, have recently led to the popularity of a dockless bike-sharing system that allows users to leave the bike anywhere convenient.
According to Mordor Intelligence, the bike-sharing market was valued at USD 3 billion in 2020, and it is anticipated that it will reach USD 4 billion by 2026. The COVID-19 pandemic affected the bike-sharing sector in several countries. The most negative consequences were the daily decline in bike bookings.
Bike demand is majorly driven by developing countries, such as China and India that especially focus on e-bikes. China has always been the largest exporter of e-bikes. According to China’s Ministry of Industry and Information Technology, the country's output of electric bicycles reached 25.48 million during the first 10 months of 2020, a year-on-year increase of 33.4%. During this period, the revenue of major bicycle manufacturing companies reached about USD 22 billion, an increase of 16.8%. According to the China Bicycle Association, from January to September 2020, the volume of bicycle exports was 12% up on the same period last year, rising to USD 2.43 billion.
However, the bike-sharing market growth in Europe is predicted to be the fastest across the globe, as it is anticipated that a large number of service providers will venture into the region in the coming years. In regional countries, bikes are being rapidly made available near major transit hubs, such as railway stations, thereby offering users convenience and ease of travel. In addition, the European Union (EU) also promotes such services, because they are environment-friendly and help to reduce traffic.
Global bike-sharing service market size between 2020 and 2026 in billion U.S. dollars according to Statista:
Currently, major players in the bike-sharing market are:
- Uber Technologies Inc. - provides opportunities to rent a bike in a partnership with Lime. Jump brand bikes are available after Lime acquired the Jump company.
- Lyft Inc. - in November 2018, Lyft acquired Motivate, a bicycle-sharing system and the operator of Capital Bikeshare and Citi Bike. It thus became the largest bike-share service in the United States.
- Hellobike - a transportation service platform based in Shanghai, China. Founded in 2016, the company merged with Youon Bike the following year. In a series of fundraising rounds dating back to 2016, Hellobike has raised over US$1.8 billion from investors.
- DiDi Bike - Didi Chuxing Technology Co. is a Chinese vehicle for hire company headquartered in Beijing with over 550 million users and tens of millions of drivers. The company provides app-based transportation services, including bike-sharing.
The biggest companies in the market are associated with China as are the biggest deals. Looking at the recent biggest deals in bike-sharing, the first worth mentioning involved Didi Chuxing’s bike-sharing arm Qingju. It raised USD 600 million in a Series B equity fundraising round and will be granted an additional USD 400 million in loans.
What was also interesting that at the end of 2020 the mobile application of Mobike, one of China's earliest and largest bike-sharing providers, went offline after its acquisition by Meituan three years before. Mobike was acquired by Meituan for USD 2.7 billion in April 2018. In January 2019, in an internal letter to employees Wang Huiwen, co-founder and Senior Vice-President of Meituan, informed them that Mobike will be renamed Meituan Bike and that the firm would become a unit of the new parent's location-based service department.
The growing interest in e-bikes
One trend that will definitely influence the industry in the near future is the growing interest in e-bike sharing. Pedelecs or pedal electric cycles or EPAC (Electronically Power Assisted Cycles) are becoming increasingly popular. This is a type of electric bicycle where the rider’s pedaling is assisted by a small electric motor. Such vehicles are capable of higher speeds, compared to manually operated bikes. As the demand for higher speeds for short-distance traveling increases, so does the preference for e-bikes. People are ignoring the fact that sharing services on pedal-assisted bikes are cheaper than e-bikes, as the latter offers effortless driving, more convenience, and variable motor power, as well as higher speeds.
One of the most interesting investment deals in 2020 that underlines the interest in e-bikes involved London-based free-to-use shared electric bike firm London-based HumanForest. It announced in September that it had raised £1.8 million. HumanForest offers 20 minutes free per day and a corporate subscription service. It launched in June 2020. In just four months of the company’s operations, 14,000 riders have taken almost 42,000 rides with the number of rides increasing by over 100% month on month!
Later that year, the company raised £1.27m via crowdfunding with the support of over 520 investors, of whom approximately 30% were trial users. The company says that it ran a successful trial during summer 2020 in London with 200 e-bikes. The new funds will be used to expand the fleet to 1,500 e-bikes.
HumanForest’s business model is based on three sources of revenue - users pay 15p per minute after their free daily 10-minute ride is up, while partner companies pay to advertise their brand on the HumanForest digital platform and companies pay to offer their employees further minutes for the HumanForest fleet.
Bike-sharing - more positive than negative aspects
If we analyze positive, as well as negative aspects that could influence the future of bike-sharing, the positive aspects far exceed the negative ones. The only negative aspects are high initial investment costs, as well as the rise in bike vandalism and theft. Positive aspects that could stimulate the bike-sharing business in the future are growing venture capital investments, an increase in the inclusion of e-bikes in the sharing fleet, as well as technological advances in bike-sharing systems.
There is also increased interest from governments in different initiatives for the development of bike-sharing infrastructure. Furthermore, governments are offering subsidies to service providers for developing stations and expanding their reach to a large number of commuters. For instance, in 2018, Chinese Municipal governments subsidized the Public Bike Sharing Program development to encourage non-motorized transport and offer convenient, flexible, and low-cost mobility options. Meanwhile, in Europe, the new public bike-sharing system was launched in the Italian Municipality of Trieste in February 2020. The system, known as BiTS, is being implemented as part of the city's Integrated Sustainable Urban Development Plan at a cost of EUR 390,000, with the aim of developing sustainable mobility by promoting walking and cycling to reduce urban pollution.
Despite the fact that interest in bike-sharing is rising and will continue to do so, it is equally important to learn and not forget the mistakes of pioneers of the industry. For example, the company Ofo was founded in 2014 as a university project, but soon afterward raised $866 million from investors led by Chinese e-commerce giant Alibaba. Ofo was a station-free bike-sharing platform operated via an online mobile application. In total, over the course of nine investment rounds, the company has raised USD 2.2 billion but has still consistently experienced cash flow problems that were driven largely by intense competition in a market that has yet to be proven to be commercially viable according to analysts interviewed by Forbes.
Fees dropped to 1 yuan ($0.14) for each hour of use and sometimes were even free. Despite this fact, Ofo still managed to reach a valuation of $2 billion in a 2017 funding round and around $3 billion at its highest point, and at one time the company deployed more than 10 million bikes globally and attracted as many as 200 million users. “The company’s cash-burning operations and high valuation have combined to deter potential investors, and when capital became scarce, the startup could no longer cover its once sprawling operations,” wrote Forbes.
In 2018, Ofo announced a massive reduction in operations, and by 2020 it faced a large amount of unpayable debt as a result of which the company was no longer operating bike rentals. “Explanations of what exactly went wrong are still evolving, but it seems likely that the mind-boggling amounts of cash pumped into what wasn't essentially a "bike-sharing" model, but rather a rental business pepped up by a smartphone app, had something to do with it. Yes, the company bought bikes and placed them in the streets without docks for anybody to use, and that was somewhat new. And yes, a smartphone app served as the key. But the company owned the bikes, just like any old-fashioned rental shop, and incurred huge maintenance costs,” explained analysts from Roland Berger Strategy Consultants, who were quoted in its magazine “Own the future”.
So it doesn't matter how big the demand for the service is, you should always apply simple business principles to your business.
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How Donkey Republic became a micromobility leader
🚲 Donkey Republic is proving that bike-sharing can be profitable, while many competitors are struggling to stay on the road to success. Donkey Republic is partnering with cities, keeping costs low, and focusing on bikes. With more cities pushing for car-free mobility, can Donkey Republic continue to grow?
February 25, 2025
min. read
Bike-sharing has had a wild ride over the past ten years. Some companies threw thousands of bikes onto city streets without permission, while others spent tons of money but couldn’t figure out how to make a profit. Donkey Republic took a different approach—and it worked.
Started in Copenhagen in 2014, Donkey Republic didn’t rush to expand or rely on big investors. Instead, it focused on working with cities, keeping things simple, and making sure the business could actually make money. In 2023, the company earned €15.4 million (DKK 115.2 million), up 70% from the previous year, and, more importantly, it made a profit of €1.27 million (DKK 9.5 million).
From a simple idea to a growing business
The company’s founder, Erdem Ovacik, got the idea when he saw a friend using combination locks to share bikes with others in Copenhagen. He figured there had to be a better way. The answer? A mobile app and smart locks, so people could rent a bike quickly without needing a docking station.
In 2015, Donkey Republic started with just 30 bikes. Instead of flooding the streets with bikes and hoping for the best, it worked directly with city governments to get approval. That helped avoid the problems that companies like Ofo and Mobike faced when they expanded too fast and then collapsed.
The key of not overdoing
A lot of bike and scooter companies try to grow as fast as possible, spending loads of money and hoping to make a profit later. Donkey Republic didn’t do that. By 2020, it had expanded to 13 countries, including Germany, Spain, the Netherlands, and Finland, but always in a controlled way.
A big part of its success comes from working with cities instead of fighting them. Instead of just dropping bikes on the street and hoping no one complains, Donkey Republic made agreements with local governments. This means the company doesn’t have to worry as much about sudden bans or changing rules.
For example, in 2023, Paris banned rental e-scooters, which was a disaster for other companies. But because Donkey Republic focuses on bikes, it wasn’t affected.
Financial growth and key milestones
Donkey Republic has shown impressive financial progress in recent years. In 2023, the company reported a revenue of DKK 115.2 million – a 70% increase compared to the previous year. Even more importantly, they achieved a positive EBITDA (Earnings before interest, taxes, depreciation, and amortization) of DKK 9.5 million, marking a shift toward profitability.
2024 has been even stronger for Donkey Republic. The company reported a revenue of DKK 145 million, representing a 25% increase from 2023. For the first time, they also recorded a positive EBIT of DKK 1 million. This shows that their long-term strategy of working with cities and optimizing operations is paying off.
What makes Donkey Republic different?
Several factors have contributed to Donkey Republic’s success:
- Emphasize partnerships – Rather than competing with cities, they work alongside them, forging long-term agreements that drive stability and growth. Approximately 30% of their revenue stems from B2G and B2B long-term contracts, including subsidies.
- Technology-driven approach – Their smart locks and app-based rentals make it easy for users to find and use bikes anytime.
- Financial sustainability – While some bike-sharing companies struggle with profitability, Donkey Republic has managed to grow revenue while keeping costs under control.
- Commitment to sustainability – By promoting cycling as an alternative to cars, they contribute to cleaner and less congested cities.
What’s next for Donkey Republic
While Donkey Republic has shown that micromobility can be profitable, the road ahead isn’t without challenges. Competition is fierce, and other companies are rapidly expanding their e-bike fleets to compete in Donkey Republic’s space. Additionally, while city partnerships provide stability, they also limit rapid expansion – municipal contracts take time to secure, and some cities prefer to invest in their own public bike-sharing programs.
Still, Donkey Republic is betting that the demand for sustainable, city-friendly transport will only grow. With urban areas across Europe cracking down on car use – such as London’s Ultra Low Emission Zone (ULEZ) and Paris’s car-restriction policies – bike-sharing is well-positioned to thrive.
So while scooter operators continue to battle regulatory headaches and profit struggles, Donkey Republic is proving that a disciplined, city-first approach might just be the key to lasting success in micromobility.
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Who does carsharing better – OEMs or start-ups?
🚗📉 Why do big car brands struggle in carsharing while independent startups thrive? OEMs like Volvo and SEAT have shut down, but new players like Kia are stepping in with smarter strategies. Meanwhile, independent operators like GreenMobility are scaling fast. 🔍 What’s the secret to success in carsharing? It’s all about adaptability, cost control, and tech partnerships.
February 7, 2025
min. read
Who does carsharing better – OEMs or start-ups?
The carsharing industry is at a crossroads. Once hailed as the future of urban mobility, it has seen a mix of success and failure, with some players thriving and others closing shop. So we ask: why do some carsharing ventures fail while others continue to grow? And more importantly, what does it take to run a sustainable and profitable carsharing business in today’s competitive landscape?
Recent developments have been telling. Two OEM-backed carsharing ventures have recently shut down, while independent operators continue to expand, and a new entrant – Kia – has just launched its own service. This article takes you into the challenges, key success factors, and the evolving role of technology in the industry.
OEMs vs. startups: What's the difference?
Before diving into specific cases, it’s important to clarify what OEMs (Original Equipment Manufacturers) are and how they differ from startups. OEMs are traditional car manufacturers – companies like Kia, Volvo, or Ford – that primarily produce and sell vehicles under their brand names. Some OEMs have expanded into mobility services, including carsharing, but often struggle because their main focus remains on car sales.
In contrast, startups and independent operators like GreenMobility are built from the ground up as mobility service providers. They don’t manufacture cars but instead focus entirely on the carsharing experience, optimizing operations, technology, and customer service. This difference in core focus often determines success or failure in the carsharing industry.
OEM carsharing ventures
Automakers have long recognized the potential of carsharing as a way to diversify revenue streams, enhance brand loyalty, and explore new mobility business models. However, history has shown that simply putting cars on the streets and creating an app isn’t enough to make carsharing work.
Several OEM-backed carsharing services have struggled to maintain profitability. Volvo’s Volvo On Demand recently announced its closure as part of a broader strategy to optimize costs. Similarly, SEAT ceased operations at the end of 2024 due to declining demand and rising operational costs (€31 million total losses, with €11 million lost in 2023 alone, against a turnover of €16 million).
The challenges OEMs face in carsharing stem from several factors:
- High operational costs: Fleet management, maintenance, insurance, and parking fees add up quickly.
- Consumer behavior: Unlike leasing, carsharing requires a behavioral shift from users, who must plan trips around vehicle availability.
- Integration challenges: Traditional automakers are structured around car sales, not service-based mobility solutions. This makes it difficult to operate carsharing efficiently.
However, these closures don’t necessarily mean that carsharing itself is an unsustainable model. Instead, they highlight the need for a different approach – one that independent players are executing more effectively.
New entrants and independent operators
While OEM carsharing ventures struggle, independent operators like GreenMobility are experiencing growth. Unlike traditional automakers, these companies are built from the ground up as mobility service providers, allowing them to operate more efficiently.
GreenMobility’s growth can be attributed to:
- A laser focus on carsharing: Unlike OEMs, which juggle multiple business lines, independent companies dedicate their entire strategy to optimizing the carsharing experience.
- Smart cost control: Leveraging technology for fleet management and maintenance allows them to run lean operations.
- Strategic market selection: Choosing the right cities with high demand and favorable regulatory environments plays a huge role in their success.
By leveraging a digital-first approach, these companies are able to optimize vehicle utilization, reduce operational costs, and offer a seamless user experience—something OEMs often struggle to achieve.
Does KIA’s entry in carsharing bring new hopes?
Amidst the shifting landscape, Kia has entered the carsharing market with its new service, Hyr & Dela. Unlike previous OEM carsharing attempts, Kia's model focuses on businesses rather than individual consumers. This service allows companies to rent vehicles on a monthly basis and share them among employees, partners, or customers via a digital platform.
Why does this approach make sense?
- Higher vehicle utilization: By targeting businesses, Kia ensures that its vehicles are in use more frequently than traditional consumer-focused carsharing models.
- Fleet management efficiency: A B2B-focused model allows for easier scheduling, tracking, and maintenance planning.
- Electric vehicle (EV) adoption: Kia’s service aligns with the growing trend of businesses adopting EVs for sustainability goals.
If executed well, Kia’s corporate-focused carsharing model could prove to be a sustainable business approach, avoiding many of the pitfalls that plagued previous OEM carsharing attempts.
5 lessons we have learned from this
So, what can current and future carsharing ventures learn from these experiences?
1. Adaptability is key
Rigid business models and a lack of flexibility are major roadblocks to success. Carsharing services need to be highly adaptable, leveraging data to adjust pricing, fleet locations, and service offerings dynamically.
2. Cost management determines longevity
Carsharing is a capital-intensive business. Operators need to optimize fleet efficiency, reduce downtime, and control maintenance and insurance costs. This is where independent operators often outperform OEMs, as they are more agile in managing expenses.
3. Technology is a game-changer
A carsharing platform is only as good as its technology. Companies partnering with mobility tech providers like ATOM Mobility can benefit from advanced booking systems, automated fleet management, and data-driven decision-making—key elements for a seamless and cost-effective service.
4. Market selection matters
Choosing the right city or region for carsharing is crucial. Factors like public transportation integration, parking regulations, and urban population density can make or break a carsharing business.
5. OEMs need a service-oriented mindset
Carsharing is not just about providing access to vehicles—it’s about service excellence, convenience, and user experience. For OEMs to succeed, they need to rethink their approach and adopt a more customer-centric mindset.
The future of carsharing
The carsharing industry is at an inflection point. While some OEM-backed services have faced hurdles, independent operators like GreenMobility and strategic initiatives like Kia’s Hyr & Dela show that success is still possible with the right approach. The key lies in adaptability, cost control, technology integration, and market focus.
As the industry continues to evolve, Kia’s entry into corporate carsharing is an exciting development. With a smart strategy and strong execution, they have the potential to carve out a successful niche in the market.
We’ll be keeping an eye on Kia’s progress and, in the meantime, wishing them the best of luck in their new venture. Let’s hope they are here to stay!
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