New | Beijing’s Ofo to ship 20,000 bicycles for its ‘Uber for Bikes’ rental service in the UK and US

If entrepreneur Dai Wei has his way, Silicon Valley engineers and London college students will soon be able to ride bicycles made by one of the oldest makers in China, with the swipe on their smartphones.

Instead of selling the bicycles, the 25-year-old Dai wants to persuade cyclists to share them through his startup’s “Uber for Bicycles” business model.

Dai’s Beijing Bikelock Technology, also known as Ofo, is poised to ship 20,000 China-made bicycles to the United States and Britain after the Christmas holidays to begin the service.

“Short travels is a global demand,” said Dai, during an interview with the South China Morning Post in Beijing. “There are 3 billion netizens around the world, but the number of people who can ride bicycles is estimated to be more than 5 billion. If we do it right, we can have great potential overseas.”

Founded in 2014, Dai’s Ofo is valued at US$500 million, after securing US$100 million of funding in September from investors including the venture fund backed by Xiaomi Corp’s founder Lei Jun, and Didi-Chuxing, the country’s dominant ride-hailing service and buyer of Uber Technologies’ China business.

Bicycle-sharing is hardly new. From London’s Boris Bikes to Taipei’s plan to encourage commuters to ditch their motor vehicles, there are about 640 bicycle-sharing systems operating around the world, with more than 640,000 of the two-wheelers in use. It’s a market that may expand by 20 per cent annually to generate as much as US$5.8 billion in sales by 2020, according to a forecast by Roland Berger, a consultancy.

What makes startups like Ofo stand out is it allows users to hail a bicycle through their smartphones, and return them wherever they want, instead to set locations. The company goes around after peak hours to collect the bicycles, returning them to pickup points designated by big data analysis as in-demand areas.