Investors are hot on bike sharing because the Chinese companies have proven it can be a big business within months. Mobike for example the leading bikeshare company that jumped to $3 Billion valuation in less than 2 years. In China, bike sharing has exploded overnight due to an influx of venture capital and a business model that does not need docking stations, making expansion cheaper and easier. Dockless bike companies scatter their bikes around a city, and customers use an app or scan a code to unlock them. Without the need for docks, these startups can launch in a new city in a matter of weeks.
Technically the dockless companies can enter a market without asking permission. They only need to leave some bikes around the city, and anyone with the app can start riding.
The bike-share companies are spending their venture funding aggressively to compete. Like Uber and Lyft, the bike-share companies argue that they can turn a profit in markets where they’ve operated the longest. Unlike Uber and Lyft, they don’t have to pay drivers, though they have to maintain bikes, replace stolen ones, and move ones parked inappropriately.
