Happy April Fool’s Day!
In a surprise announcement, China’s largest bike-rental companies, Mobike and ofo announced plans to merge last night, local media is reporting. For the time being, both companies will operate independently until the merger is complete. Unlike other recent mergers in China’s sharing economy, the merger will see the creation of a new company, to be called Mofo.
“After deep consideration and encouragement from friends and allies, the founders felt they were wasting too much investor money. In addition, their parents were worried about their health,” said a person familiar with the matter.
The move from both companies comes as a shock as many expected the competition to continue for some time. Indeed, the typical cycle in China’s hot sectors has historically been burning cash to capture users and market share until a winner emerges.
“They considered all the possibilities and decided that they didn’t want to keep fighting. There’s actually more value in combining forces. This merger will allow them to better beat back other smaller players. In addition, they can now focus on the future of transportation: autonomous riding,” said the person.
As part of the announcement, the companies also said that once the merger is complete, they will begin to invest in autonomous riding research. Autonomous driving is a high-interest area for companies around the world, with ride-hailing company Didi also exploring this.
“The future is autonomy. Cars will soon be self-driving. Why can’t bikes be self-driving as well?” said the person.