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Successful rental model for bikes will not work for sharing all things

China Daily | Updated: 2017-05-15 07:48

Successful rental model for bikes will not work for sharing all things

Various bicycles are parked at a subway entrance in Shenzhen, Guangdong province, April 4, 2017. [Photo/VCG]

AS SHARED BICYCLES PROVE POPULAR, more companies are copying the model with things such as basketballs and umbrellas. However, some of these self-claimed "sharing" businesses are unlikely to succeed. Beijing News comments:

In economics, there is a strict definition of the "sharing economy". It means people sharing their unused resources with others, so that both sides benefit and the whole society avoids wasting resources.

In this mode, a company provides a platform enabling one person to rent or lease a resource of another. An example of this is Airbnb, which offers a platform for those offering or wanting to rent a room from others. The company in turn makes money by charging a service fee.

From this point of view, the model used by companies offering "shared bicycles" should perhaps more properly be regarded as part of a "rental economy", in which the companies provide bicycles and customers pay to rent them. The companies make money by renting out bikes they own rather than from information they provide.

As this "rental" model has proved quite successful for bicycles, many companies are now rushing into the market offering other things to rent, such as basketballs or umbrellas. However, when trying to copy this business model with other goods, these newcomers might have neglected what makes bicycles special.

The rental bikes are cheap and convenient to use, and it means people don't have to buy and maintain their own bikes.

But basketballs might be less appealing to rent. Anybody who plays basketball will prepare for the sport, and having their own basketball is a natural choice. If a company really invests to put some rental basketballs by the side of the field, its customers might be very few in number and the mode might not be sustainable. Other businesses might face similar problems, and they should think twice before entering the market.

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