Chinese bike-sharing startup Ofo launches in Sydney

200 bicycles have been deployed in Sydney's CBD, with an additional 200 to be added in Waverley and Inner West suburbs in the upcoming weeks.

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(Image: Ofo)

Chinese bicycle-sharing company Ofo has announced launching in Sydney after conducting a pilot program in Adelaide, South Australia.

Ofo's bikes can be rented for AU$1 for 30 minutes, with a ride cap of AU$5 and no deposit or membership fee.

The company -- which raised $700 million in a Series E round led by Alibaba in July, valuing the company at $2 billion -- said it is working with the government and cycling "stakeholders" to roll out its service one location at a time.

"We are dedicated to making Australian cities as green and liveable as possible by providing the ultimate healthy and low-carbon mobility solution," Zhang Yanqi, co-founder and COO of Ofo, said in a statement.

Thus far, 200 bikes have been deployed across Sydney's central business district, with an additional 200 to be deployed in nearby suburb Waverley and Inner West council areas in the upcoming weeks.

The Chinese company, which has deployed 10 million bikes in more than 180 cities across 17 countries, will also double its fleet in Adelaide's CBD and North Adelaide from 50 to 100 bikes.

Ofo said a local operations team has been established to manage the bike fleet in each pre-arranged riding zone within Sydney to ensure all bikes are maintained, redistributed, have a helmet, and are parked appropriately.

Additionally, the company said a GPS-enabled geofence, called an "operating fence", allows it to contain its fleet and ensure appropriate resourcing within the riding zone at all times.

As part of the rollout, Ofo staff on the streets will educate people about Ofo bikes, including how to use them and park them. Preferred parking zones are also visible on a map in the Ofo app, guiding users to the best places to park.

Ofo's credit system will reward users who use its bikes correctly while deducting points from those who fail to comply with its parking rules and recommendations.

Users can report a missing helmet or faulty bike in the Ofo app and a 24/7 contact phone number is present on all bikes.

Prior to launching in Australia, Ofo had ridden into seven countries -- Singapore, the UK, Kazakhstan, Thailand, Malaysia, Japan, and the US -- since commencing its global expansion in late 2016.

Today, Ofo is generating more than 32 million daily transactions and has provided 200 million-plus users with 4 billion rides.

Founded in 2014, Ofo is one of two startups dominating China's bike-sharing wave, the other being Mobike, which raised $600 million earlier this year.

Unlike Ofo and Mobike, more than 30 bike-sharing apps in China have had to shut down, according to the South China Morning Post.

Chongqing-based Wukong Bicycles, for example, was forced to close down in June after losing 90 percent of its bikes within five months of launching. The bikes were not equipped with GPS devices, making them impossible to track.

While companies like Ofo tout a healthier and low-carbon mobility solution, the bike-sharing boom has faced criticism for crowding roads, footpaths, and parking lots, with local governments in China being pressured to introduce rules to reduce congestion, according to state news agency Xinhua.

Local governments in cities such as Shanghai and Tianjin have already started introducing rules that require companies to hire at least one maintenance employee for every 200 bikes and limit a bicycle's service life to three years, Xinhua has reported.

Shanghai Municipal Transportation Commission announced in August that no new shared bikes will be allowed into circulation in the city, capping the number at 1.5 million.

The local regulator also demanded bike-sharing firms combat improperly parked bikes in the city, for which both Ofo and Mobike have expressed support.

China's sharing economy has been booming, with umbrella-sharing services also offered in the country. In 2016, the sector saw deals worth 3.45 trillion yuan ($500 billion), up 103 percent from the previous year, according to a report released by the Chinese government's Sharing Economy Research Center.

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