ofo Expands Overseas: From Seattle to 15 US Cities

On Christmas Eve 2017, the sun shined in Seattle. Several people rode bikes of the same color and type on the right side of a main thoroughfare in the city center.

Residents might have found that such bikes suddenly appeared across the city during the past few months. For young people in Seattle who love cycling, the bicycle was a “new species”. It had no fixed parking location, and users only needed to scan the code to unlock them All the yellow bikes looked the same with only three eye-catching letters: ofo.

The shared bikes were created by ofo, a new technology company in China. Since entering Seattle in August 2017, ofo has spread to 15 cities across the US from California to Massachusetts. ofo is approved to operate all over the US, and has been welcomed by municipal governments and users.

Chinese Companies Licensed to Operate

August 17, 2017 was a special day in the history of Seattle traffic. On this day, Seattle granted its first permit for a Chinese company called ofo to operate shared bikes.

ofo also became the first Chinese brand to operate shared bikes in a US city.

As for choosing Seattle as its first stop in the US, ofo said it was the result of careful selection. Grace Lin, the company’s vice president of US operations, said ofo spent three months surveying state policy, terrain, climate, population density, travel habits, traffic conditions and many other factors. ofo chose 20 cities for the first batch it would enter.

The Seattle government attaches great importance to energy conservation and environmental protection, and has previously set up a local bikes sharing system. Its results were not satisfying. The government was seeking support from companies better serve the public. Seattle is friendly to bicycles, and the city has many bike lanes, which are not common in the US. Many local residents prefer bikes and are more likely to be users. All of these provided an opportunity for ofo.

As a new science and technology capital, Seattle is home to Amazon, Microsoft, Starbucks, Boeing, Costco and other industry giants. Seattle could offer ofo opportunities for technical exchanges, cross-border cooperation and big data.

Grace Lin said ofo also considered several cities in California and contacted their governments. “ofo left a good impression on the California government. But as California enjoys great political freedom, its requirements for enterprises to enter is very high. It took nearly half a year from the time negotiations began for us to enter California,” Lin said.

While communicating with the California government, ofo launched in Seattle.

But Seattle does not represent most American cities. The US government considers many details when an enterprise enters a local city, and it requires companies to communicate with the US Ministry of Communications, the mayor’s office and relevant departments. The process is quite complicated.

Grace Lin said some municipal governments in the US think China is developing chaotic bicycle sharing programs and miss the convenience they offer. This was challenge for ofo.

“We soon realized it was impossible to start a pilot project in a city and then spread it across the country. All cities must start at the same time,” Lin said.

From 1 City to 15 Cities

ofo expanded in the US after its smooth operation in Seattle. The US is like “country on wheels”. When traveling, Americans depend on cars – urban public transport systems are underdeveloped. But the US has a large population, and many cities have a very high population density, which creates the ideal conditions for bicycle sharing.

Before entering each city, ofo needs to show local governments how its system works and rules for bicycle sharing. Most times, ofo must repeatedly provide videos, pictures and case studies. After being approved by the government, ofo also had to complete other procedures before it could launch and advertise its bikes.

“Most Americans ride bikes before they get a driver’s license,” Lin said, “What ofo needs to do is to make them aware of the convenience of cycling and see it as a transportation tool.”

But in terms of promotion, ofo’s “China experience” has not given it a smooth path in the US. The country has wildly different policies, markets and cultural environments. For example, ofo planned to launch a cycling event on an important American holiday. Three weeks in advance, they learned the activity needed to approved by the government or it would be dispersed. “It’s hard to imagine that a 20-person cycling activity had to report to the government,” Lin said.

While it “encountered” unexpected challenges, ofo also meets surprises. The company’s overseas spokesman Cai Muyuan said ofo participated in South by Southwest in Austin, Texas. ofo rented a booth and put 100 shared bicycles, offering free service for people. During the festival, the local government found that ofo was popular and was very curious about its product. After taking the initiative in communication and coordination, the local government ultimately determined that ofo could provide shared bikes in Austin this year.

In choosing US cities and regions, Lin said towns with a single center may not be suitable for ofo. Those with several centers in a region that are separated by a limited distance may be more suitable.

ofo has brought its bicycle sharing system to 15 cities and regions, including Washington, Los Angeles, Dallas, southern Miami and Wooster. ofo focuses on downtown districts and populated areas.

Lin said the US is not only populous, but its residents are timely in their payments. As long as they recognize the value of something, they are happy to pay for it. Its current US fleet is far from being able to keep up with demand. The company said it sees great promise in its future.

This article originally appeared in The Economic Observer and was translated by Pandaily.