A commuter rides past a row of shared bicycles in Shanghai on March 22, 2019. (Image credit: TechNode/Cassidy McDonald)

Guangzhou has become the first Chinese municipal government to reverse a ban on additional rental bikes, the popularity of which resulted in tangles of broken frames littering major cities. The city announced Tuesday the results of a call for bids from the city’s incoming official bike operators—Mobike, Hellobike, and Didi’s Qingju.

In an announcement released by the Guangzhou Transportation Bureau, Mobike was granted the biggest allotment. It will be allowed to add 180,000 new bicycles over the next three years to six districts in the downtown area. Hellobike won a 120,000 quota and Qingju was granted 100,000 units, first entries into the gateway city of south China for both companies.

“A more efficient, sustainable rental bike market now requires more technology-driven and data-based operational methods,” (our translation) Ren Liangliang, vice president of Hellobike said publicly in Guangzhou in late March. The Ant Financial-backed company pledged to improve city traffic, while Mobike said it would continue to remove damaged bikes to maintain public space.

The announcement also means Ofo may be squeezed out of Guangzhou, according to a report by Renmin Daily. Ofo did not qualify for the auction because it was blacklisted for defaulting on its debts beginning late last year. For companies without access to the city, policy makers now allow a transition period of six months to allow for bike disposal and withdrawal, before authorities start enforcement measures, Chinese media said.

Prior to the invitation for bids, there was no government regulation of bike rental services, meaning the companies ran without licenses. The bidding process procured licenses for the three winners, in addition to the right to add bicycles to the approved districts.

Guangzhou has prohibited the addition of new bicycles into the city for more than a year and a half, then it became the first among Chinese major cities to reopen the market to bike rental startups with an invitation for bids in late April. Beijing authorities also launched a month-long clear-out move, calling companies to remove abandoned bicycles to make way for new ones.

With the exception of Guangzhou, it remains unknown whether other city governments including Beijing and Shanghai will lift their bans, which have been in place for months. Last month, Hellobike and Qingju were censured by Beijing authorities for adding new bikes to the city without permission.

Some have called for a discussion on the issue, saying a more effective and sensible regulation requires the involvement of industry players, not just the government playing a dominant role, reported The Beijing News citing Liu Daizong, an expert from the World Resources Institute.

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen

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