It's already expensive for buses and subways, 6.5 yuan per hour! Shared bicycles quietly increase in price for cycling | Hello | Travel | Enterprises | Consumers | Users | Bikes | Shared bicycles

In 2015, it was known as the first year of the sharing economy. Under the trend, a series of sharing economy products such as shared bicycles, shared power banks, shared umbrellas, shared gyms, shared toys, and shared clothing have emerged in the market.

After several years of industry reshuffling and reshaping, shared bicycles have been preserved.

Of course, the players of shared bicycles underwent a complete reshuffle. In 2016, there were more than 20 companies engaged in fierce competition, and now the market is in a state of competition among the "three giants" of Meituan Bicycle, Hello Bicycle, and Didi Qingju, with the three companies occupying 95% of the market.

According to the playing method of "bringing new, retaining and transforming" of Internet enterprises, as the industry enters a mature and stable period, enterprises will no longer burn money to subsidize users, but begin to "harvest" from the user side.

In the past year or two, the topic of "the price of bike sharing companies has increased again" has been discussed on the Internet from time to time. Red Star Capital Bureau has noticed that the price of shared bicycles in some cities has risen to 6.5 yuan per hour.

Will consumers still pay for increasingly expensive shared services?

Shared bicycles quietly increase in price, with some cities charging 6.5 yuan per hour

Many consumers must resonate with the price increase of shared bicycles, but when did the price of shared bicycles quietly rise?

According to the purchasing form of consumers, shared bicycles have two charging modes: package riding and single riding.

1. Package cycling: there will be a wave of collective price increases in 2022

Since January last year, there has been a collective price increase for bike-sharing package cycling cards.

In January 2022, Hello Bike announced that it would increase the price of the 7-day cycling package from 10 yuan to 15 yuan, the 30 day card from 25 yuan to 35 yuan, and the 90 day card from 75 yuan to 90 yuan.

In August 2022, Meituan Bike also announced that it would increase the 7-day riding card from 10 yuan to 15 yuan, the 30 day card from 25 yuan to 35 yuan, and the 90 day card from 60 yuan to 90 yuan.

At this point, except for Didi Qingju, the package card prices of these two major bicycle brands have been adjusted to the same level.

In 2022, the price adjustment of cycling packages by bicycle companies was not small, with a price increase of 20% -50%, which had a significant impact on sticky users who frequently ride bicycles.

Taking the price increase of Meituan bicycles as an example, without considering additional discounts, the current season card price is 90 yuan, which is 360 yuan per year. For consumers, this price is already enough to buy a bicycle.

In addition, users also need to consider whether they can find the corresponding Meituan brand bike when using the car, as well as facing additional dispatch and management fees when they cannot find a parking spot.

2. Single ride: Prices vary in different regions and continue to rise overall

Among bicycle users, there are still many who do not purchase package cards for cycling, but choose a single settlement method.

According to data from iMedia Consulting, in 2022, 36.6% of Chinese shared bicycle users stated that they would choose a single payment for their riding expenses.

In addition, the price of a single settlement varies among different cities and brands.

For example, in early May this year, some media reported that the pricing methods of some bicycle brands in Xiamen had changed; At the beginning of this year, some media reported that some bicycle brands in Chengdu had changed their pricing methods; In addition, users from Shandong, Jiangsu and other regions have also reported price adjustments for shared bike brands in their respective regions.

Taking Meituan bicycles in Chengdu as an example, Red Star Capital Bureau learned that starting from January 23rd this year, Meituan has implemented a new pricing standard in the Chengdu area. Previously, the starting price of 1.5 yuan included a duration of 30 minutes, but now it has been adjusted to 15 minutes.

That is to say, if the user rides for 20 minutes, they now need to pay 2.5 yuan, compared to 1.5 yuan before; If you ride for 50 minutes, you now need to pay 4.5 yuan, compared to 3 yuan before.

This increase is also significant. If users commute to and from work on a shared bike every day, based on a 20 minute cycling time, the monthly fee that consumers need to pay on a shared bike for 22 working days is around 110 yuan, compared to only 66 yuan before.

If you don't have a package bike card, you can buy a bicycle at this price in three months.

It is worth mentioning that after Meituan's price increase, other bicycle brands in Chengdu have also adjusted their pricing rules for cycling. At present, the prices of Meituan Bike, Hello Bike, and Didi Qingju remain consistent within Chengdu city.

In addition, due to price adjustments varying from city to city, the prices of some bicycle brands in some first tier cities are actually higher.

Taking Shanghai as an example, the current charging rules for Meituan and Hello bicycles are 1.5 yuan for the first 15 minutes, and 1 yuan for every 15 minutes thereafter, which is equivalent to 4.5 yuan per hour. The fee for Didi Qingju is 1.5 yuan for the first 15 minutes, and 1 yuan for every 10 minutes thereafter, which is equivalent to a fee of 6.5 yuan for one hour of cycling.

In summary, whether using a package ride or a single ride, the price of shared bicycles is indeed increasing.

The era of 50 cents and a half an hour, various red envelopes, and even free riding is no longer there. No wonder some consumers complain that the price of riding shared bicycles is now higher than that of buses and subways.

Consumers love and hate each other, with 90% of users riding bikes every week

From a user perspective, according to the "Special Research Report on the Development of Shared Mobility in China in the First Half of 2021" released by iMedia Consulting, the main factors for users to choose shared bike travel are their perception of environmental protection, physical exercise, unwillingness to walk, unwillingness to take public transportation, and affordable prices.

Therefore, shared bicycles have become the last mile travel choice for many consumers. According to online economic and social data, the number of shared bicycle users in China has reached 300 million in 2021.

In addition, the frequency of these users using shared bicycles is not low. According to data from iMedia Consulting, in 2022, 37.9% of Chinese bike sharing users used it on average 3-4 times a week, 36.0% used it 1-2 times a week, and a small number of consumers used it as much as 5 times a week or more.

That is to say, nearly 90% of bike sharing users use shared bikes every week.

In large cities that are prone to traffic congestion, consumers often rely more on shared bicycles.

Taking Beijing as an example, according to the Beijing Evening News, the number of shared bicycles ridden in Beijing in 2022 has reached 937 million, with a daily average of 2.8065 million riders.

Although these urban commuters are quite dependent on shared bicycles, they have also encountered a lot of difficulties in using them.

On Black Cat Complaints, searching for related shared bike brands resulted in a large number of complaints from users, mainly focusing on issues such as "inability to find parking spots", "arbitrary deduction of dispatch fees", and "bike quality issues".

In addition, according to data from iMedia Consulting, in the 2022 survey of Chinese shared bicycle users, in addition to improving bicycle performance, nearly 60% of consumers believe that shared bicycles should reduce costs, reduce the number of damaged cars, and improve the speed of maintenance.

Overall, environmental convenience has given shared bicycles a huge user base, and many first tier cities have strong user stickiness. However, there are also many consumers who are not satisfied with the overall user experience.

Is bike sharing a good business?

Perhaps many people believe that the frequent price increases of shared bicycles are due to companies relying on shared bicycles to earn more money. After all, shared bicycles are also a business with a large user base and high usage frequency.

But in fact, companies may also feel aggrieved by price increases, as shared bicycles are not very profitable.

According to the prospectus of Hello Travel, the revenue in 2018, 2019, and 2020 were 2.114 billion yuan, 4.823 billion yuan, and 6.044 billion yuan respectively; The net losses were 2.208 billion yuan, 1.505 billion yuan, and 1.134 billion yuan, respectively.

That is to say, Hello Chuxing has accumulated a loss of about 4.8 billion yuan over the past three years. As of the end of 2020, 91% of Hello's revenue came from shared two wheeler services.

Meituan's situation is not much better either. According to the financial report, Meituan fully acquired Mobike for $2.7 billion in April 2018, with Mobike contributing a revenue of RMB 1.507 billion to the comprehensive income statement. During the same period, Mobike contributed a loss of RMB 4.55 billion to Meituan.

In 2022, Meituan achieved a revenue of 219.955 billion yuan, with an adjusted net profit of 2.8 billion yuan. However, the new business segments of shared bicycles and community fresh produce suffered operating losses of up to 28.4 billion yuan.

In 2021, Qingju shared bicycles were divided by Didi into a loss of 30 billion yuan in "other businesses".

According to Didi's prospectus, as of March 31, 2021, Didi has deployed 5.2 million bicycles and 2 million electric bicycles in approximately 220 cities across the country. The revenue from this part in 2018, 2019, and 2020 was 200 million yuan, 1.5 billion yuan, and 3.2 billion yuan, respectively.

Overall, whether it's Hello, Meituan Bike, or Didi Qingju, bike sharing is a somewhat bitter business for these three giants.

Why does shared bicycles appear to have a large number of users, but in reality, they don't make much money?

From the perspective of enterprise revenue, the profit model of shared bicycles is actually relatively single. In the past, consumer deposits could still be used as leverage, indirectly becoming financing tools. Nowadays, everyone adopts a "deposit free" model, and the profit model only remains user payment and advertising.

From the cost perspective of the enterprise, firstly, car manufacturing belongs to heavy assets with high costs.

According to the Qianjiang Evening News, the average cost of one early shared bicycle reached over 2000 yuan. However, the cost of buying a car is only one aspect, and the larger cost lies in the high operation and maintenance costs that remain high after entering the market.

Hello CEO Yang Lei previously stated in a media interview that the daily operation and maintenance cost of a bicycle is 0.3 yuan, and the depreciation cost of each vehicle is 0.6 yuan per day.

That is to say, the daily maintenance and depreciation cost of each shared bicycle is about 1 yuan, while a bicycle costs 365 yuan per year.

Assuming a bike sharing enterprise invests 100000 bicycles, the annual maintenance cost can reach over 30 million yuan. This has not yet taken into account extreme situations such as loss or severe damage, and the final cost will only be higher.

However, why do Internet giants have to deploy their shared bicycles in a single revenue structure and complicated costs?

In fact, behind insisting on doing shared bicycles, companies have their own trade-offs.

For Hello, the travel business represented by shared bicycles is just an entry point, and what the enterprise wants to do is a travel and life service platform.

In April 2022, Hello also removed the word "travel" from its name and adopted a new brand slogan of "accompanying life every day". Hello, this means a new stage of development for the company's transformation from a mobile travel platform to a professional local travel and lifestyle service platform.

Hello's business boundaries are also constantly expanding. By opening the app, in addition to the travel industry such as cycling, hitchhiking, and taking taxis, Hello also engages in businesses such as hotels, catering, online errands, train tickets, attraction tickets, and pets.

It can be said that from bike sharing to travel platforms, and then expanding to the entire local life business, Hello is continuously expanding its business map and entering sectors that are more likely to achieve profitability.

Meituan Bike is mainly aimed at filling the gap in Meituan's local life and is an important part of Meituan's improvement of local life services. From food delivery, grocery shopping, and medicine to travel, Meituan bicycles are more of a supplement to the travel experience.

Qingju is improving the travel map of the Didi platform. For Didi, shared bicycles are relatively lower end, and companies can cultivate user habits through high-frequency shared bicycles, and then transition to ride hailing services to meet user travel needs.

Overall, Didi and Meituan have an inward demand for shared bicycles, maintaining stable traffic entry through shared bicycles. Hello, the demand for shared bicycles is expanding outward, and companies are exploring more business possibilities from the perspective of travel.

Summary

Nowadays, the wave of the sharing economy has faded, and shared products that are not recognized by consumers and do not have commercial value have been eliminated. However, shared bicycles, as products that can meet the real needs of consumers, have been preserved.

These Internet enterprises also have different "plans" on bike sharing. Speaking of price increases, this may be expected. However, how to scientifically manage bicycles and improve service quality has also raised higher requirements for these shared bicycle enterprises in the market.