Uber and Grab, fierce competitors in the ride-on-demand apps, take their battle to the two wheels market. Grab invested in Obike recently, a startup for bike sharing that operates in Southeast Asia.
Grab quietly backed oBike’s dockless bike sharing system to help their expansion in the subcontinent, and to better compete with the Ofo, backed by Uber.
This movement throws interesting dynamics into the development of the bike sharing market in southeast Asia and Australia, the grounds of operation for OBike. Ofo is backed by Didi Chuxing, who recently acquired Uber China, and is also a backer of Grab via a Series B founding.
Both spokespersons for Grab and OBike decline to comment about the investment, but the total capital seed in the Series B founding reached $45 million in August.
The scale and goal with this investment in Obike is unclear, but as Grab opens operations in Singapore, it’s expected that OBike will follow. Recently, Ofo was added to Didi Chuxing’s main app, so it’s logical that OBike and Grab will follow a similar path.
Nonetheless, OBike still has challenges to face. Various reports from Melbourne and Sidney state that OBike misuses bikes. Up to 42 bikes where rescued from the banks of Melbourne’s Yarra river, where they were presumably thrown.
According to some Australians, dockless bikes cause visual pollution. Authorities are alarmed about pollution accusations, and even the Mayor’s office has considered banning OBike from the city’s downtown area.
In other markets users are questioning OBike’s fees, like the Singhalese Redditor Chubbypun643: “It’s too expensive for me as a student. At $1/30mins it’s more expensive than a MRT ride to anywhere, and that’s not to mention their barely refundable $49 deposit. It’s a neat concept, but I don’t think the take up rate will be high”.
Obike now has fresh funding to tackle these issues and continue their expansion to the rest of Asia and Oceania.