Chinese unicorn ofo has provided bicycle rides to more than 200 million users in 250 cities in 21 countries around the world, according to its website.
The concept is simple enough: the user unlocks the bicycle through the mobile phone and enjoys the shared travel service anytime and anywhere where ofo has a presence.
But the technology behind the Beijing-based station-free bike-sharing platform operated via an online mobile application is cutting edge: mobile internet of things (IoT) smart locks and the world’s leading artificial intelligence big data platform “Singularity” system.
A case study published by Huawei revealed that in July 2017, ofo partnered with China Telecom and Huawei to develop and deploy Narrowband-IoT (NB-IoT) and smart IoT locks on ofo’s bikes.
“Ofo’s top priority was to introduce and popularize smart locks to improve user experience and enable value-added services,” the study noted.
The company eventually developed an IoT smart lock based on NB-IoT technology that “lowers power consumption, enables wide coverage, and slashes system resource delays at low cost.”
The Huawei paper explained that this allowed ofo to ensure that it has bikes located at key locations when commuter demand is highest. “Meanwhile, bikes can be unlocked in less than a second. Both improvements have greatly boosted user satisfaction,” it said.
Other technologies were later added to the ofo platform, including “smart chips, networking tools and IoT platform. Together they ensure that there is coverage in poor-signal areas, higher than average network capacity, faster payment processing and improving battery life.”
“ofo already is reaping the rewards of improved user experience, especially for commuters who use the bikes to ride from subway stations to work,” Huawei said.
As a provider of short distance transportation solution, ofo is solving the “last mile” transportation problem by connecting approximately 10 million bikes for users in many countries.
Headquartered in Hadian, Beijing, ofo has received a total of $2.2 billion in funding in nine rounds, according to Crunchbase.
Market research firm Statista projects the global bike sharing market between 2016 and 2021 to grow between €7 billion and €8 billion ($7.8 billion to $9 billion). The number of bikes in bike sharing schemes are also expected to reach around 20 million units during the same period.
However, the Huawei case study noted that the market poses a significant challenge to operators.
“The popularity of bike sharing has led to rising expectations: Users want a bike exactly when and where they need one. And they want to pedal away quickly,” it said. “A second issue is unsustainable business models, as companies that go for maximum user numbers soon lose their competitiveness.”
A report from Time magazine published in April 2018 highlighted these many challenges in China alone. At that time, it said around 60 firms have put 16 million to 18 million bicycles onto Chinese streets. At one point, ofo had even faced a cash crisis as customers demand refunds, the Nikkei Asian Review reported in December 2018.
In this highly competitive market, Huawei said market segmentation based on analytics can focus on and retain high-value users.
“For shared bike enterprises, two approaches can revitalize a jaded business model: implement smart management and seek partners for new innovations,” it concluded.