Chinese bike-sharing firm Ofo has announced a new pricing scheme for its shared bikes following the introduction of a licensing fee by the Land Transport Authority (LTA).
Under LTA’s new licensing framework, bike-sharing operators have to pay $60 for every bicycle deployed (which covers a licensing fee and security deposit), on top of a $1,500 application fee.
Those who opt for the pay-as-you-go service will be charged $0.50 per unlock, and an additional $0.50 for every 15 minutes of use or part thereof.
This means that a ride under 15 minutes will cost $1.
A 30-minute ride will cost $1.50, which is three times more than the usual $0.50 fee.
Meanwhile, a one-hour ride will cost $2.50, more than double the previous rate of $1.
Ofo also increased the prices for its subscription pass. The Ofo pass will cost $8.99 (30 days), $16.99 (60 days) and $26.99 (90 days), up from its previous pricing of $6.99, $15 and $25 respectively.
Regardless, Ofo feels that this price hike will help the company to “maintain the quality of [their] bikes … and [their] level of service … to users.”
Other bike-sharing firms in Singapore have no similar plans to increase their prices as of yet.
“While there are associated costs with the licensing regime, we will definitely be looking into other means to manage the costs, and not pass them off to our users unnecessarily,” SG Bike’s marketing director, Benjamin Oh, told TODAY.
On the other hand, Mobike Singapore country manager Sharon Meng said that it is “currently exploring other sources of revenue such as corporate sponsorships and advertising” to help offset the licensing fee.
Smaller Pool Of Ofo Bikes To Tap On
On September 28, LTA has awarded Ofo with a full license to operate in Singapore at the end of the month.
However, the new licensing regime, which was introduced to curb indiscriminate parking, also meant that operators are required to downsize their fleets.
Ofo’s 80,000 bicycles would be capped at 25,000, a figure which Ofo feels would not be “sufficient to facilitate the high demand for bike-sharing in Singapore.”
This could be a potential downfall for Ofo, which currently has the “best coverage” in Singapore.
Ofo users could start considering its competitors if there were not as many Ofo bikes around. Coupled with the price hike, this could be very detrimental for Ofo in the long run.
Featured Image Credit: Popspoken