The most global of the contenders and with the biggest pot of money, Ofo sports 10 million bikes and 20 million users across 15 countries and 180 cities. Founded in 2014 by CEO Dai Wei while a Peking University student and named to resemble a rider on a bike, Ofo is financed with $1.2 billion, mostly from China sources, including Alibaba, Hony Capital, DST Global, CITIC Private Equity and Chinese ride-hailing leader Didi Chuxing.
"We want to unlock every corner of the world and make bicycles accessible," said Grace Lin, vice president of Ofo North America, who oversees Ofo's four U.S. markets so far and leads a 50-person U.S. team, shuttling between Beijing and San Francisco. Ofo's goal is to exceed 1 million users in the United States by the end of this year, she said, noting that this week Ofo plans to add the Denver suburb of Aurora to its footprint.
The largest of the smart bike-sharing companies globally, Mobike is active in more than 100 cities internationally, runs more than 5 million bikes and claims 100 million users in China, Singapore, the U.K and the United States. Mobike was launched in early 2015 by CTO and former automaker executive Joe Xia and two Chinese co-founders. Its group of $1 billion backers include heavyweights Tencent, Sequoia Capital China, TPG, Hillhouse Capital, Singapore's investment power Temasek and major institutional investors. Mobike has leveraged the Tencent connection by integrating Tencent's WeChat popular service for cyclists to scan for and pay for bikes.
Ultimately, LimeBike could face a more powerful contender if rumors of a possible merger of the two leading Chinese bike-sharing entrants actually occurs. So far, such talk is dismissed and downplayed by the companies. If a merger does happen between Ofo and Mobike, it would parallel the joining of China's leading car-hailing services backed by Alibaba and Tencent into one major player, Didi Chuixing, which acquired Uber's China business in 2016.
In China, smart bikes – or Uber for bikes -- have become a popular, environmentally friendly and efficient way to travel short distances for commuting to work or running errands. The new biking craze in China has ironically brought biking back to Beijing, Shanghai and other congested Chinese cities.
With the dockless, bike-sharing model, cyclists can use a smartphone app, GPS technology and QR codes to find, unlock, rent, pay for and park bikes anywhere convenient. Riders don't have to park or pick up bikes at docking stations.
Docked bikes such as Citi Bike in New York City introduced bike-sharing but this new, more flexible dockless model could catch on quickly in the U.S., just like Uber did for cars. Free introductory rides are being offered as well as reasonable rates starting at $1 per half hour or one trip lasting up to one hour, with 50 percent discounts for students.
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The potential of the U.S. market has led other, smaller contenders to jump in, such as San Francisco-based Spin, which has rolled out to Seattle, Dallas and South San Francisco and is propped up by $8 million in funding by Grishin Robotics and several early stage technology investors.
LimeBike's CEO Sun said he welcomes the entry of competitors to the U.S. because together they can help the new Chinese-style biking go mainstream. Sun said he was inspired to start LimeBike after observing the popularity of dockless bike-sharing in China.
He pointed out that LimeBikes have been customized for the U.S. market, with extra-sturdy, longer-lasting aluminum frames, three gears in most markets and up to 8 for hillier cities, solar panels for battery charging, flat-proof tires, and special reflector lights. LimeBike also differentiates its model with a monthly subscription pricing of $29.95 for 100 rides per month.
With the market so young, profits are secondary to fast expansion and critical mass among the bike-sharing rivals. Even so, LimeBike is close to breaking even in one market already, according to Sun.
In the United States, local and city governments require the bike operators to have a permit or license. Not all cities welcome the new model, and pilots are being carried out in several markets. In China the problems have included vandalism and theft of bikes, as well as bikes randomly strewn along crowded city streets and pedestrian paths. The bike-rental companies have turned to offering incentives such as free rides to cyclists who leave their bikes in proper spots.
— Rebecca Fannin, special to CNBC.com