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Grab a bicycle, as GrabCycle looks set to ride into town

SINGAPORE — Ride-hailing firm Grab could be making a major foray into the bicycle-sharing industry, two months after it first announced a partnership with homegrown operator oBike.

An oBike bicycle outside one-north MRT station sporting GrabCycle livery. Pictures of oBike bicycles sporting GrabCycle livery have been making their rounds on social media since the two companies announced a tie-up in January. Photo: Louisa Tang/TODAY

An oBike bicycle outside one-north MRT station sporting GrabCycle livery. Pictures of oBike bicycles sporting GrabCycle livery have been making their rounds on social media since the two companies announced a tie-up in January. Photo: Louisa Tang/TODAY

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SINGAPORE — Ride-hailing firm Grab could be making a major foray into the bicycle-sharing industry, two months after it first announced a partnership with homegrown operator oBike.

Since then, there have been hints that it could be riding into the turf dominated by Ofo, Mobike, and oBike. On Monday (Mar 5), Grab posted a teaser on its Facebook page about an announcement on Friday with the tagline, “Something wheelie exciting is coming”. In its invitation for a media event, the company hinted at a “single app” that allows users to “explore the alleyways and neighbourhoods of Singapore with just a few taps”.

Pictures of oBike bicycles sporting GrabCycle livery have been making their rounds on social media since the two companies announced the tie-up in January.

A check by TODAY with the Accounting and Corporate Regulatory Authority (Acra) found that a company called GrabCycle (SG) Pte Ltd was registered last November. The company was listed as an “app-enabled market place for bike sharing”, and a “bike and e-bike rental service”. It was registered under the names of Grab co-founder Anthony Tan and Ms Joanna Teng, who were listed as GrabCycle’s director and secretary, respectively.

Grab and oBike were tightlipped about GrabCycle and Friday’s announcement when contacted by TODAY. However, oBike general manager Tim Phang said that there are currently “two initiatives” in the works under the partnership.

In response to queries, a Grab spokesman said: “We are always exploring new mobility options to add to our suite of transport offerings. This includes our partnership with oBike to promote bike-riding as an alternative first- and last-mile commute across the island.”

While analysts said Grab’s entry into bike-sharing is a logical move, they believe the company is unlikely to enter an already saturated market on its own. Instead, it is more likely to either partner or buy over an existing player.

Dr Walter Theseira, transport economist from the Singapore University of Social Sciences (SUSS), noted that it “makes sense” for Grab to go into bike-sharing as they want users to “think of their platform first when it comes to any sort of service related to transport, or even related to payments”.

Adjunct Associate Professor Zafar Momin from Nanyang Technological University’s Nanyang Business School added: “By partnering oBike, Grab potentially builds a bigger critical mass of customers and gets them conditioned to using GrabPay and other Grab services. The upfront payment model for cycles could also help their cash flow.”

In their January press release, oBike said that users would be able to use GrabReward points when paying for their rides using Grab’s e-payment platform, GrabPay, in the coming months.

Some experts felt that there should not be a separate app for GrabCycle, as Dr Theseira said that customers would likely prefer oBike’s services to be integrated into the Grab app.

SUSS transport researcher Park Byung Joon, however, noted that it would be better for Grab’s payment platform to be integrated in the oBike app instead. “If it’s (oBike services being integrated into Grab), Grab users might find the app too cumbersome – slower in loading, etc,” he said.

Dr Theseira also said that GrabCycle could help reduce overcapacity in the bike-sharing market. He added: “If a ride-hailing company ties up with more than one bike provider, that might be the kind of step you need to rationalise the market a bit.

“The way the market works now, it’s not clear that any of the providers can make any money, because there are too many of them and there are too many bicycles in the market.”

The tie-ups are already in overseas markets, as Chinese ride-sharing giant Didi Chuxing announced in January plans to launch a bike-sharing platform within its own app. Starting with users in Beijing and Shenzhen, the platform will combine services from bike-sharing firms Bluegogo and Ofo, as well as its upcoming “own-branded bike-sharing service”.

However, Dr Theseira was unsure if GrabCycle will take off here, as he pointed out that unlike in China or European cities where there are many restrictions on driving your car in the city, private-hire cars and taxis are able to reach many parts of Singapore.

As Grab looks to expand on its offerings here, there are concerns that the firm could monopolise the transport industry. Mr Tham Chen Munn, an analyst with transport solutions firm PTV Group, said there are no grounds for concern as transport is still regulated by the Land Transport Authority.

“I’d be more concerned if it’s in cities like Jakarta because it could lead to monopoly and setting high prices,” he added.

But Adj Assoc Prof Zafar pointed out that there could be potential risk of monopolistic behaviour if Grab acquires rival Uber’s South-east Asian business, as that could lead to higher prices for consumers. It was reported last month that Uber is preparing to sell its ride-hailing business in the region to Grab in return for a substantial stake in the company. ADDITIONAL REPORTING BY KELLY NG

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