This is a graveyard of #startup dreams and investor cash:
The rows and piles of bicycles, from an array of bike-share startups that have popped up in the past year or two in China, were created when authorities in Shanghai seized the two-wheelers. The reason: the city of 25 million has too many bikes, resulting in clogged sidewalks, especially outside subway stops and community gates.
Startups like Mobike and Ofo, in their haste to expand and become the best-known service, have flooded Shanghai with bicycles. 1.5 million of them.
In August, Shanghai municipal authorities said that 500,000 bikes is its saturation point and instructed the startups not to deploy any more bicycles. Guangzhou did likewise, putting a cap at 800,000 rides for its 14 million inhabitants. Six other cities followed suit.
And then this week in Wuhan, population 10.6 million, authorities said no more goddamn bikes. There’s 700,000 of them, but the streets can only handle 400,000, according to state news agency Xinhua which described the deluge as causing “chaos.”
Cease and desist
It’s a stark reminder to bike-share startups that their growth cannot be limitless.
Unlike Uber or Didi, the dockless bicycles operate under a ceiling. In every city there is a saturation level – a tipping point where bikes turn from utility to litter; from tools that improve city life to mangled wrecks that trip up old ladies.
In order to continue the kind of growth that startups need to bag hundreds of millions more dollars from investors, apps like Mobike and Ofo will need to accelerate their overseas expansion.
And this applies to more than bikes.
Any startup in China that wants to slap a QR code on something and then rent it out needs to remember that their growth could be capped any day – or even see their entire business shut down overnight.
That happened last month when children’s trikes – with stroller-esque handles for parents to push them along – suddenly appeared in Shanghai. This is a photo from the startup itself:
Within a few days, Chinese media reported that they’d virtually all vanished after city workers were seen scooping up the trikes and tossing them into the back of pickups.
Despite that stumble, the trike startup, Deemeng, is apparently persisting. Just a few days ago, it tried its luck in a different city.
Aside from the responsibility to not litter the streets, a number of China’s so-called sharing startups – renting out everything from basketballs to umbrellas – have found that theft and vandalism are a natural curb on their growth. But that’s a whole other story.
Steven's interested in ecommerce, mobile, smartphone adoption, gadgets, social media, transportation, and cars. If you have any tips or feedback, contact him on Twitter: @sirsteven