Shanghai first! Will the stricter bike-sharing rules spread to other parts of China?

Shanghai authorities have completed standard guidelines on bike-sharing startups and are to seek public opinions soon, Shanghai-based news outlet The Paper reported on Tuesday.

According to the new guidelines, Shanghai will soon launch an e-map to guide shared bikes’ parking. The guidelines require shared bikes to have GPS embedded in them. So far a large proportion of shared bikes in China’s market fail to meet this standard. Ofo, a leading player in China, has more than 1 million bikes and none of them use GPS.

Bike conditions are to be regulated. Bikes should be scrapped after 3 years of use and are forbidden to re-enter the market, even after being reassembled or repaired. Bikes in the market need to retain at least “95% integrity”.

Tencent-backed Mobike used a different approach from ofo. Mobike has specially designed bikes that are several times more expensive than its competitors’, aiming to ensure that there will be little need for maintenance of bikes for five years.

It is predictable that bike-sharing startups – whether they provide expensive and durable bikes or cheap and simple bikes – will face a great impact, at least in Shanghai in the near future.

Other aspects of the guidelines include that startups should allocate at least 50 human employees for every 10,000 shared bikes. They must refund their users within seven days after a user requests his or her deposit back. If a user is injured when using shared bikes, companies should compensate the victim for up to RMB 150,000 (USD 22,000).

There are more than 450,000 shared bikes and over 4.5 million registered users in Shanghai, Chinese tech media 36Kr reported.

Shanghai has been a weather vane for new business models in China. In December last year, administrators in the southern Chinese city of Kunming made survey trips to Shanghai before they came up with a report on ride-sharing administration. The Coastal city of Shenzhen in the same month issued draft opinions to guide shared bikes.

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