And Finally

Punctured pride

Wuhan’s bike-sharing scheme is failing


The early days

In 2010, a model called Ma Nuo became a minor celebrity after telling a potential suitor on a dating show that she would rather weep in someone else’s BMW than smile on the back of the contestant’s bike.

Four years on, the bike has been making a minor comeback, as city governments embrace bike-sharing schemes as a means to reduce air pollution. According to the Earth Policy Institute, China accounts for 79 of 535 such programmes worldwide, including 16 of the 21 biggest schemes. A showcase example was supposed to be in Wuhan, central China’s largest city. At its peak it offered 90,000 bicycles for rent.

Wuhan netizen Guan Dekuan suspects the figure is a lot less now. Xinhua reports that Guan walked five kilometres and went to 16 docking stations, but found not a single bicycle available. And when he spoke to staff about finding one, they asked why on earth he’d want to rent a bike when a bus or taxi would be more convenient.

Reporters from the news agency discovered similar situations when they conducted random checks in March and April. Many docking stations lacked bikes or had inventory that was locked or broken. In many instances, the docking stations had been converted into newspaper kiosks.

So what went wrong? lays the blame with the company in charge of Wuhan’s scheme: Xinfeida. It tells a familiar tale of the government awarding a contract and providing subsidies, but failing to supervise the programme’s implementation properly. Instead, the scheme’s operator has invested in real estate and other sidelines.

Xinfeida officials counter that the scheme is making losses of Rmb20 million ($3.19 million) every year because of unexpectedly high management and maintenance costs. “We have been unable to continue and can do nothing about the paralysis,” it told Xinhua.

But the news agency then unpicked some of the contract figures with the help of anonymous Xinfeida staff. This suggests that the firm got an upfront grant of Rmb300 million, mainly to pay for advertising billboards whose rent was supposed to generate ongoing revenue to service the bikes. These billboards can raise up to Rmb46 million in annual sales. Half the booths at collection stations have also been rented, netting more income, while 800,000 Wuhan citizens deposited cash on cards that allow them to use the bikes. Together this amounts to Rmb540 million in upfront revenue and Rmb50 million in annual revenue, Xinhua says. On the cost side of the equation, the docking stations and the bikes cost Rmb132 million to set up. So there should have been sufficient funds for Xinfeida to run the project. But the state news service then quotes an insider’s claims that cash was diverted into buying part of an office building in the centre of Wuhan.

But if Wuhan offers a cautionary tale, Hangzhou appears to have had a more successful time. Its better managed scheme will see the city’s 69,750 bikes increased to 175,000 by the end of the decade.

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