How much does your Ofo bike cost? Your privacy?

The true cost of bike hire schemes revealed

Students returning to Oxford last year may have noticed an unfamiliar sight on the city streets: countless new, dock-less bikes. They came in three varieties: yellow, silver and blue, representing the three major bike sharing firms operating in the city (Ofo, Mobike and Pony Bike). By now, the presence of these bikes has become a familiar sight to most of us. Indeed, Oxford is just one of many cities engulfed in a global bike-sharing boom and reports have proliferated in recent months of bike firm wars in Sydney, Mobike trips in London and even bike graveyards in Shanghai.

The system is simple and its appeal obvious. Users download an app, enter their card details, turn on location data and then use the app’s built in map function to find, swipe and unlock bikes, which they can then use within the city limits for as long they like. Fares are low: all three firms charge just 50p for a 30-minute ride (Mobike also charges a refundable 15-pound deposit). The convenience and inexpensiveness of these apps have already made them a firm favourite amongst the student population, and recent months have seen the firms replacing and updating their bikes.

The sudden proliferation of these bikes does, however, raise a few questions. Firstly, why did three firms appear in the city almost simultaneously? Should one firm have not realised the potential in the market and cornered it? Secondly, how can charges of 50p per ride possibly fund the purchasing and maintenance of so many bicycles?

Whilst the deposit fees charged by these companies can be a useful source of initial capital, Mobike is the only firm in Oxford that charges such a fee. Thus, as with many start-ups, it is likely that dock-less bike sharing firms are not funded by self-generated revenue, but rather by external investment. The two largest firms operating in Oxford, Ofo and Mobike, are owned by Chinese tech giants Alibaba and Tencent respectively, making the Ofo/Mobike competition but one field in the two firms’ ongoing global battle. This showdown encompasses everything from social media, video-streaming, ticket-selling, lift-sharing, bill-paying, food delivery and, now, bike-sharing apps.

Wang Yijian, a Chinese tech journalist who authored a report on the finances of the global bike-sharing boom, explains that, as the major investors in the two firms, Alibaba and Tencent are not interested in interested in profit, but rather seek to utilise user data to strengthen their payment apps, Alipay and WeChatPay. In the very earliest stages of setting up each app, users enter their phone number, email and card details as well as enabling the app to track their location. The apps gain further information, like age and personal details, from other sources, such as linked social media accounts.

It’s access to this sort of information that attracts investors to bike-sharing firms.

Whilst recent controversies and changes to data protection laws have forced these firms to be less explicit with their data sharing activities (before the Cambridge Analytica scandal, “I consent to Mobike sharing my data with other firms outside of Mobike and outside of the EU”, was one of the very first conditions users were required to agree to when setting up the Mobile app), the data policy of each firm still allows them a considerable degree of leeway when it comes to personal data usage. All three state in their data policy that they may share users’ data with parent companies, affiliate companies and any contracted “partners”, as well as with firms who eventually buy them out. What’s more, all three apps are only usable once users approve long and somewhat ambiguous lists of entities with whom they can rightfully share user data.

I contacted each of the firms asking what exactly is done with this information: whether it is ever sold, where the money to buy the bikes comes from and whether access to data was a major incentive for investors. Ofo failed to respond to me at all and Mobike declined to comment, instead sending a thirty-page whitepaper entitled “How Cycling Changes Cities”, which focused on urban planning. Only Clara Vaisse, co-founder of PonyBike, offered a full response:

“One of the Pony promises is to never sell the data to any third party…we’re extremely proud to say that every Pony ride is profitable. The money to buy new bikes comes from the profit generated by running the scheme. The business is privately owned by the founders and Angel investors.”

Ponybike is an Oxford-based start-up and operates in just one other city. This difference in scale is, perhaps, crucial: where Ponybike exists to provide bikes and make a profit, Ofo and Mobike, both operate in over 200 cities and are entwined in a global battle – one fuelled by tech-giant rivalry and investors’ pursuit of data.