BUSINESS

Bike-sharing biz heats up in Korea with Kakao, Socar joining

By Yeo Jun-suk

Kakao, Socar join bicycle-sharing service amid growing competition over micro-mobility market

  • Published : Mar 12, 2019 - 18:56
  • Updated : Mar 13, 2019 - 09:03

South Korea’s ride-sharing companies are expanding their business portfolios into electric bike-sharing, creating high expectations as municipalities scramble to introduce the service as an alternative to conventional transportation.

The country’s major messenger app company, Kakao, has entered the e-bike sharing business with a new service called Kakao T Bike. The company began its service on Mar. 6 in Incheon and Seongnam, Gyeonggi Province.

Socar, a Seoul-based car-sharing startup, also joined the foray by investing in a young e-bike sharing service provider, Nine2One. The company said it would launch the sharing service within this month.

"We are hoping to provide various transportation options for consumers without cars,” Socar CEO Lee Jae-woong said when he announced the plan for launching the sharing service on Mar. 6. “We can resolve traffic problems by reducing the number of cars on the streets.”


(Kakao)

The bike-sharing business is the focus of intense competition across the country, whether the bicycles are conventional or electric. The country has allowed electronic bicycles to run on the lanes alongside ordinary vehicles since March last year. 

Inspired by the success of a similar endeavor in Seoul, some of the surrounding municipalities such as Seongnam and Suwon have been joining hands with global bike-sharing platforms.

Seoul has been operating a bike-sharing service since 2015. The bicycles are available at designated places scattered around Seoul. Currently, about 20,000 are being provided to the public by the Seoul government. 

“The number of bicycles (available for sharing service) is 20 per every 10,000 Seoul citizens,” Seoul city government said. “Most of them are located at least 20 meters away from the subway and bus stations.”

In Suwon, about 5,000 bikes are being used as part of the sharing service since the program was launched in January last year. The municipal government is working with Singapore-based bike-sharing company O-bike. 

Seongnam has also introduced a similar bike-sharing service in cooperation with Kakao. About 600 electric bikes are part of the service. Some 400 Kakao bikes are operational at Songdo, Incheon.

The Korean ride-sharing companies said their businesses would ride high, as bike-sharing has gained popularity as a form of environmentally friendly transportation amid growing concern over air pollution.

“Although we make money out of the car-sharing business, our ultimate goal is to reduce the number of cars,” Socar CEO Lee Jae-woong wrote on Facebook last week. “It is the only way to make our business sustainable.”
 
Automobile exhaust fumes are considered to be one of the major contributors to worsening air pollution in South Korea. Some vehicles with harmful pollutants can be restricted from operating in Seoul when the city  government declares emergency measures to reduce the level of fine dust.

The companies also stressed that their service is much more user-friendly than those provided by the municipalities, as the users don’t have to be bothered looking for parking spaces after borrowing the bicycles.

For example, Kakao users are able to check out where the bicycles are placed via its Kakao T apps before using them. The borrowed bicycles can be returned to any places that the users see fit -- except for the places such as motorways, underground parking places and the building’s entrances.

“For those seeking to travel a short distance, we can provide alternative to traditional transportation,” Kakao Mobility CEO Jung Joo-hwan said on March 5 when the company launched the bicycle sharing service in Yeonsu-gu, Incheon.

Kakao Mobility is seeking to provide about 3,000 bicycles for nationwide sharing service after achieving the success of its service in Incheon. About 1,000 electronic bicycles are operated in Incheon, with most of them being manufactured by Samchuly and Alton Sports.

After investing into Nine2One, Socar is planning to launch its own bicycle-sharing service in Seoul by the end of this month. The company said it will provide 350 bicycles as initial service and expand the number to 2000 for nationwide service. 

By Yeo Jun-suk (jasonyeo@heraldcorp.com)



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