Bicycle Sharing Systems Case Study

Chapter 1  Target customers

1.1 Introduction of Bicycle Sharing System 

Bicycle sharing systems, also known as Public bicycle systems, have been introduced as part of the urban transportation system to extend the accessibility of public transportation systems to final destinations. From the old generation of pile-able bicycles to the new generation station-less bikes, the rapid development brings people lots of convenience. Commuter can take the bicycles whenever they need and leave it behind when they reach their destinations. The first public bicycles were introduced in Amsterdam in the 1960s (also called white bicycle plan), public bicycle systems have been promoted in urban cities all around the world.

Since the bicycle sharing system first spread to China in 2008, it grown up very fast. China is the country that have largest number of sharing bikes in the world. China is also the first country that having station-less sharing bikes. There are 25 different brands of bike sharing system, the most popular are Mobike and Ofo.

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Figure 1 China Share Bike market share distribution (2017 March)

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             APP active users number      Daily active number[pic 3][pic 4]

Figure 2  Users of China Share Bikes brands (2017 April)

Source: First-Economic News(China), SuTu research central http://www.hbspcar.com/1684.html

1.2 Organization Background

Ofo is a Beijing based bicycle sharing company founded in 2014. The founder Dai Wei was dropout PHD and four students from Peking University started as a student project. This company just raised $450 million at a valuation of more than $1bilion. According to Ofo’s official website, they have over 20 million registered users. December 2016, Ofo firstly announced an oversea strategy, start pilot run in San Francisco and London, also launched 10 thousands bikes in Singapore. By 3rd of May 2017, Ofo became the first one and the only one bicycle sharing system provide services 4 countries 100 cities in worldwide.

The cost of producing one Ofo yellow bike is 200-300 Yuan. And each ofo’s sharing bikes have a service life of 2 to 3 years.

1.3 Ofo’s service

1.3.1 How to use Ofo sharing bikes?

STEPT 1: Download the software and register it

STEPT 2: charge, recharge, deposit, balance

STEPT 3: booking, riding, parking, cost

STEPT 4: Use coupons, red envelopes, student cards

STEPT 5: Complaint feedback

[pic 5][pic 6][pic 7][pic 8][pic 9]

Figure 3  Steps of using Ofo’s sharing bikes

The first step, we need to download the Ofo application, and in the application to register our own ID. University students have a special access to log in with a student’s ID. The second step, after the registration of the account, you need to understand the sharing of simple fees, account recharge, deposit and balance and other related operations. In determining the needs, to find a bicycle after the need to connect Alipay or WeChat red envelopes to pay. The third step, after the deposit, you can ride. Sharing the bike also provides booking function, in the phone, you can find the location of the bike, each bike has a positioning system, easy to find a bike. The fourth step, sharing the bike software, often launched activities, such as: invite friends will be able to get coupons, grab red envelopes and so on. Software has a preferential policy for students, students can use the card to reduce costs. The last step is to return the bike, you can contact the official customer service to solve some of your riding problems, you can also suggest that you need to improve the place. To improve the efficiency of sharing bicycles.

1.3.2 introduce Ofo’s travel service model

Table 1  Basic methods of Ofo

Ofo’s sharing bicycle deposit is RMB 99, this charge is another operator, there are two standards in the bicycle system. Distinguished, the city and the campus, the city charges every half an hour 1 yuan, the campus is half an hour 0.5 yuan. The general time calculation is based on hourly charges, in order to reduce the customer's use of time error, sharing the bike for half an hour to calculate the cost. Bicycle itself has a manual password lock, get the password method In application, you need to share the cost of sharing bicycle in the app, get the password. In the final settlement also use the app, app will record your use of time, and then manually settle.

2.1 Target customers

Through analyze registered users, the profile of a ‘typical sharing bike user’

Table 2 Typical sharing bike user

From the table above, we could describe the bike sharing user is：a working man with average salary, highly educated and have health life style.

Since University students are the majority of bike sharing system’s users, in this report we will target the customers in university students where in a second tier city - Beihai, in GuangXi Provence. The Ofo bicycle sharing system have a special offer for university students: free for the first ride everyday, and 0.5 Yuan for 30 minutes which is half of other user’s charge. This will stimulate university students consumption. Also, the number of users and potential consumption in a college would determine how many bikes that the company plan to launch in this campus and how to distribute.