Sizzle Of The Week, The Great Bikesharing Boom
Bicycles in their modern form became common in the early 20th century, making them a brilliant innovation that had the misfortune of showing up on the scene shortly before a slightly better one rolled out: the automobile. As a result, the car became the transportation innovation that changed the world, as the bicycle ended up a bit of an also-ran (or rolled, in this case).
And so the bicycle often lost out on the credit that was its due. For example, without the bicycle, there would be no United Parcel Service, which was founded under the name American Messenger Company by James Casey and Claude Ryan. The two teenagers had two resources on which they built their delivery empire: a bicycle and a borrowed $100.
But after over a century of taking a backseat, so to speak, bikes have been blowing up in the U.S. and around the world for the last 18 to 24 months – and investors, riders and start-ups have begun giving the bike its due.
Because it seems no matter where you turn, it is turning into big business, as the bikesharing platforms seem to be taking over the world.
“Bikes are really culturally agnostic; it doesn’t matter if you are in Europe, North America or Asia — everyone pretty much understands the concept of bikes, and the vast majority of people know how to ride one,” Mobike’s head of international expansion, Florian Bohnert, told Karen Webster last spring. There are a number of very interesting target markets, because no matter what city you are in, they want bikes as opposed to cars.”
Mobike was the loudest sizzle in the bonanza of bike-related news this week, with the announcement that it has been acquired by Meituan-Dianping for $2.7 billion, according to South China Morning Post.
As of the announcement, Mobike has 7 million bikes in 180 cities worldwide and controls an estimated 70 percent of the Chinese bikesharing market. Meituan-Dianping is frequently described as the Chinese version of Yelp. The acquisition follows an expansion into ridesharing that the firm kicked off last month.
The deal does see Mobike leaving the market at a slightly lower price point than its value as of last summer – at a $3 billion valuation, according to The Wall Street Journal.
The deal, according to Chinese media source Yicai Global, includes a mix of $1.2 billion in cash and $1.5 million in equity, and will also see Meituan assume Mobike’s nearly $1 billion in debt.
And while one bikesharing firm was exiting, on the other side of the world, a new firm was popping up to snatch up some funding in San Paulo, Brazil.
Brazilian startup Yellow has captured $9 million in seed round funding. Those funds will go toward launching the country’s first dockless bikesharing service.
“As local residents, we’re acutely aware of the pain points caused by Brazil’s inefficient public transit, and we built Yellow specifically to address them,” noted Eduardo Musa, Yellow founder and former CEO of Brazilian bike manufacturer Caloi.
“Our goal is to improve circulation of urban traffic and curb harmful greenhouse gas emissions by providing a fun, cost-effective mode of transportation that integrates with other public transit systems to optimize daily routes in big cities.”
Dockless bikes of the electric variety, also known as assisted bikes (which can give riders a boost uphill and on long rides), also got a big win this week. Dockless, electric bikesharing programs have gained some traction in the U.S. – namely in hilly San Francisco, where they are particularly appreciated. They have yet to crack the New York City market, where they have not been legal.
Until now. Mayor Bill de Blasio signaled his intention to see that rule changed.
“As cycling continues to grow in popularity for commuting, deliveries and tourism, we are seeing the demand for pedal-assist bicycles that can help cyclists travel longer distances and more easily climb steep hills,” Mayor de Blasio said in a press release. “With new and clear guidelines, cyclists, delivery workers and businesses alike will now understand exactly what devices are allowed.”
The move follows a crackdown that saw the NYPD seize 923 e-bikes a few months ago. New rules will allow pedal-assist bikes while still barring anything that goes over 20 mph.
The news was particularly good for JUMP, a NYC-based bikesharing startup that can’t offer its pedal assist bikes in its hometown due to local regulations. The firm has an 18-month exclusive permit for its electric bikes in San Francisco. It also operated dockless pedal-assist bikes in Washington, D.C. and Sacramento.
But JUMP’s news out of New York was probably its second biggest reveal this week, the first being that it might be a target for acquisition by Uber. According to sources, the two firms – which already have a partnership agreement – have been investigating the sale of JUMP to Uber for a sum of around $100 million. A possible investment with venture participation has also been discussed.
Reports further indicate that Uber is not JUMP’s only potential suitor, and “that other parties” have been increasing their offers over the past week in a bid to secure ownership.
JUMP has been unavailable for comment, and Uber has formally declined to comment on the reports.
“Our mission at JUMP Bikes is to build the bike you want. A bike that can take you farther, get you there faster and be the most fun to ride,” the company wrote in a blog post. “A bike that you don’t even need to own, doesn’t cost a penny to maintain and is always nearby when you want it. If we achieve this mission, then we’ll see more people on bikes — meaning greener, more accessible and healthier cities.”
So will JUMP finally crack New York – and, if it does, will it still be its own firm, or a part of Uber?
And what will happen when all the regional ridesharing champions start to clash as they grow globally?
Too early to call the race – but the fact that the Tour de Dockless Bike is already rolling along so fast and hot makes for this week’s winning sizzle.
Online alcohol delivery as the toast of the town: Booze with a click of the mouse and a knock at the door? Turns out people like that concept. Data from Slice Intelligence shows that online alcohol delivery revenues grew by roughly 33 percent in 2017. The average rate of increase month on month was about 3 percent. The overall growth got a tailwind from Drizly, the eCommerce marketplace, which saw revenues up 62 percent over 2017. The biggest month? December, at 12 percent of the year’s sales.
Mobile SMB loans: Big surge here, as a Kabbage survey found a 360 percent ramp-up in the number of SMB loans applied for over mobile conduits, as measured over a roughly four-year period ending in February 2018. The value of the loans was up more than 1,220 percent.
Money, on a global scale: Cross-border transfers got new muscle as Walmart2World launched. Overall, $138 billion was sent from the U.S. to receivers around the globe. Walmart says that the fees tied to transactions are lower than its peers – and that receivers can get their money within 10 minutes.
Ripple sinks, no port on exchanges: Ripple was denied listing on two of the top crypto exchanges in the U.S., Gemini and Coinbase, even amid dangling cash incentives to do so. Ripple has been hoping to make waves, of course, and the price has been hit hard in the overall decline in cryptocurrencies. Tough sledding for a marquee name.
Apple Pay: Now! Please!: News hit that the tech giant is nudging iPhone users to enroll in Apple Pay, with alerts that their phone setup is incomplete – if they do not enter their credit card info for Apple Pay, that is. Critics charge that the prompts are a form of trying to promote antitrust behavior.
Tech stocks: Easy come, easy go when it comes to stock market gains. The decline in big cap tech names, from Amazon to Google, continued into its third week, as total slippage came to roughly $400 billion. That’s a lot of digits. Facebook, of course, didn’t help, turning stocks into a giant … faceplant.