Why does bike-sharing app Ofo decide to share user data with city governments?

Ofo, the Alibaba and DidiChuxing-backed Chinese bicycle sharing company with 9 million daily active users, is in a hot competition with Tencent-backed Mobike, which boasts 8.6 million daily users. The turf war is turning from a competition for market share into a battle on the big data front.

Most bike sharing companies initially analyze their usage pattern data in order to redistribute bicycles more efficiently. The proliferation of bicycle sharing networks, however, is generating a huge amount of data on a daily basis that can help not only these companies, but also city authorities who want to understand transportation patterns and make informed planning decisions.

Recently, ofo announced that it will voluntarily share its data with the authorities from 200 Chinese cities. Ofo’s “singularity” big data platform circulates 40TB of data every day, and city administrative departments will soon be able to access real-time information on bicycle deployment, parking locations, and movement. The data will help city planners visualize commute patterns and traffic hot spots. They will be able to facilitate the distribution of bicycles and clear sidewalks for pedestrian safety.

Like the recent data sharing agreement between Apple and the Chinese government, this deal will raise concerns about whether or not it is a good idea for companies to share data with public authorities. Of course, local officials may interfere with ofo’s daily operations for public safety reasons if they identify violations or other issues. The data sharing may add additional operational and maintenance costs for ofo as well.

On the other hand, the collaboration between ofo and local governments marked a new business growth strategy for the company. Ofo can diversify its revenue streams by acquiring larger market share and integrating into the wide ranging Smart City plan. In the long run, both ofo and the government will benefit from the public-private partnership.

Many Chinese cities are participating in Smart City development and encouraging people to use low-carbon and public transportation to alleviate traffic congestion and air pollution. The bicycle ridership information is an essential piece for gathering more in-depth information. For example, in Chengdu, more than 600 grids enable the precise monitoring of riders’ movement and behavior. Security cameras, integral components of smart traffic light control systems, may not be able to cover every single corner of a city. Ofo’s data could be used as a supplementary tool to predict traffic conditions and track and optimize Smart City schemes.

For ofo’s investors and other business partners, the value of company’s data is its purity. Didi can provide commute and traffic information from its data platform. However, Didi’s data couples passengers and drivers. The ofo data will make it easier to understand the true intentions of a rider who makes decisions on when and where to go.

Most bicycle riders start at public transportation hubs or stations and continue for 2-3 kilometers. Riders can use the bikes to run daily errands, such as going to grocery stores, banks, or restaurants, but they are not the focus for public transit or car sharing. Thanks to the IoT data from ofo bicycles, this lesser-known transportation sector is being unveiled. Mobike launched an incentive program to encourage riders to park the bicycles in high-demand areas in order to get bonus red packets. Bicycle riders can be guided to the area where local business wants them.

Ofo has chipped in its data to city planning, and this will open doors to myriad opportunities for data uses.

(Top photo from Ofo.com)

Fang Yuan
Fang Yuan

Fang Yuan is our columnist. She is originally from Shanghai and now lives in New York. She is a Certified Passive House Consultant and works on sustainable building consulting. She believes that technology helps people and the environment if it is being used mindfully.

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