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Didi improves its ecosystem with takeover of Bluegogo, launch of shared electric bikes

A woman walks past ride-hailing company Didi Chuxing's booth at the Global Mobile Internet Conference in Beijing, China, on April 28, 2017. Photo: Reuters

China's taxi-hailing leader Didi Chuxing has signed a deal to partly manage the operation of what was once the country's third-largest bike-sharing firm Bluegogo, part of its strategy to build an intelligent transportation system.

Helped by a buyout of archrival Uber's China operation, Didi has grown as the monopoly of the domestic car-hailing market, and is stretching its reach into the country's glutted bike-sharing sector, which is currently dominated by the leading bike-sharing service providers Mobike and Ofo. Didi is the biggest financial backer of Ofo, while Tencent is the top shareholder of Mobike.

Didi said that it is planning to launch a kaleidoscopic bike-sharing platform on its ride-hailing app, through which the users are able to book bikes operated by Ofo, Bluegogo and other potential partners with deposit-free options. Didi's upcoming own-branded bike-sharing service will also be soon integrated into the bike-sharing platform.

In late-2017, Bluegogo declared bankruptcy after the domestic media reports said that the company was mired in cash chain rupture and was unable to refund its users' deposits. In its heyday, Bluegogo was China's third-largest bike-sharing firm with 20 million registered users and daily bookings of 3 million rides.

With the closure of Bluegogo foreshadowing the burst of the bubble of China's money-burning bike-sharing industry, Didi's move to take over Bluegogo's operation and including it into its bike-sharing platform signals its intent to deploy a big data-enabled intelligent transportation system offering the services of last-mile transportation, medium-distance travel and long-distance journey. It also came after Didi failed to persuade Ofo to accept its proposal calling for a merger with Mobike to end the cash-burning competition.

Over the past year, Didi has forged strategic partnerships with several Chinese city governments to build the intelligent transportation system, which would provide the residents with innovative public transport options and more flexible mobility options by means of the company's machine learning-based algorithm and big data analytics. Specifically speaking, the intelligent transportation system will better connect customers with more convenient, Internet-based taxi, minibus and shared bike.

Last week, domestic media reported that Didi had established a unit codenamed "Black Horse" in Hangzhou to operate the electric bike sharing business, which is considered as "filling the blank in the medium-distance ride". The new unit had launched small-scale internal tests of the electric bike sharing service in a certain southern city, and would roll out the service in at least three cities in the first half of this year, the reports said.

At the same time, there were online reports showing photos of Mobike debuting its electric bike sharing service. It was three months after Mobike said that it was looking for new investment for its planned electric bike sharing business.

However, the push into the electric bike sharing is hindered by regulatory constraints. In August last year, the Ministry of Transport and nine other government agencies published a document in opposition to the development of the Internet-based electric bike sharing business. Later, several Chinese cities including Beijing, Shanghai and Tianjin successively unveiled bans on the electric bike sharing business citing safety concern.

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