Bike-sharing platform Mobike, which was acquired by Hong Kong-listed Meituan the largest Chinese on-demand service platform, reportedly has again raised its rental fees across a handful of cities in which it operates, including Beijing and Shanghai.
The price hike is the latest of Mobike’s successive tariff adjustments over the past few months as the company looks to reverse its huge losses that dogged its parent’s balance sheet.
It announced in October that riders in Beijing will be charged RMB 1.5 (USD 0.21) for the first 30 minutes and RMB 1.5 for every additional 30 minutes, comparing to the previous rate of RMB 1 (USD 0.14) within 15 minutes and RMB 0.5 for every 15 minutes thereafter. Basically, the first hour of Mobike ride will now cost RMB 3 in comparison to RMB 2 before.
The price increase might help the company drive some of the customers into its monthly and quarterly passes, whereby holders of the passes could still enjoy free rides for the first two hours for each ride.
Mobike has been busy raising its prices this year. KrASIA reported earlier its pricing policy change for Beijing-based riders in April. The starting rate was adjusted to RMB 1 for the first 15 minutes and RMB 0.5 for every 15 minutes thereafter. Also, it announced a change of the starting rate from RMB 1 to RMB 1.5 for the first 15 minutes in July in cities including Shanghai, Shenzhen, Taiyuan, and Chengdu.
Meituan made a foray into bike-sharing in April last year, spending USD 2.7 billion to acquire cash-bleeding Mobike. That acquisition generated RMB 1.51 billion (USD 225 million) in revenue in the 2018 fiscal year but made a loss of RMB 4.55 billion (USD 678 million), accounting for more than half of Meituan’s entire losses.
Meituan said in its latest financial report that operating loss of its bike-sharing segment was narrowed in the first half of 2019, though not disclosing the amount. The narrowed loss was attributed to many factors including the “improved domestic pricing matrix.”
When bike sharing as a novel idea was first introduced to the Middle Kingdom in 2014, a ride typically costs RMB 0.5 for 30 minutes. Following the Ofo fiasco and the sell of Mobike and Bluegogo, the industry entered into an era while all players have to figure out a way to sustain a business in a saturated market with fierce competition.
Meituan is not the only Chinese bike-sharers that looking at a price hike to try to turn a profit or at least break even, as a host of others have done the same lately, including Hellobike, the bike-sharing service of Ant Financial-backed Hello Chuxing, and ride-hailing giant Didi-backed Bluegogo and Qingju Bikes. A one-hour ride with Hellobike now doubled to RMB 4.
