Beijing drafts regulations mandating smart locks for bike-rentals in the city

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The Beijing government is soliciting public opinion on draft guidelines aimed at reining in the disorderly expansion of the city’s bike-rental sector, local media is reporting (in Chinese).

The draft guidance provides that rental bikes should meet national and industry standards, and requires rental bikes should be equipped with smart locks and the satellite positioning system.

Most of bike-rental startups in the country such as Mobike (摩拜单车 in Chinese), Bluegogo (小蓝单车 in Chinese) and Xiaoming (小鸣单车 in Chinese) have adopted smart locks on their bikes, while ofo, which originally did not plan to use smart locks on their bikes, said it has been gearing up to replace its old combo lock with a new BeiDou smart lock on its old-version bikes in Beijing and Shanghai.

In addition, the draft guidance requires that bike-rental firms should open special bank accounts in the city. This may help regulators to supervise the safety of user deposits in these firms’ accounts.  There have been concerns about the safety of such capital with some even speculating that bike-rental companies are using these deposits to fund their expansion, but both Mobike and Ofo claimed users’ deposits are secure and they keep their operating funds separate from user deposits.

The draft guidance urges government at district-levels to cap the number of bikes allowed onto the streets to manage the bike sprawl. According to Beijing’s transportation regulators, various bike-rental firms have put into service 700,000 bikes in the city since last August, saddling the city with a heavy burden of traffic and space.

Dreams of making a fortune from the rental boom may have been shattered for electric bicycle-rental services such as E-zebra (电斑马 in Chinese) and Mebike (小蜜电单车 in Chinese) and Number-7 (7号电单车 in Chinese), since the Beijing draft guidance discourages the development of electric bicycle-rentals in the city, citing reasons of safety, parking, and road conditions.

Under the new regulation only those boasting strong financial strength and extensive channels of cooperation can have opportunities to acquire more resources to enhance innovation and ultimately dominate the market, an industry insider maintained.

As mounting problems have been emerging with the bike-rental boom, such as the inundation of bikes, illegal bike parking, slow deposit refunds and bike vandalism, local governments have started to mull rules to regulate the bike-rental sector.

Shanghai’s regulations, expected to be introduced next month, requires bike-rental firms to have three-year-old bikes scrapped off the road and bans users less than 12 years old from riding rental bikes, to name just a few. Shenzhen and Tianjin have same rules for user age as well.