Chinese bike-sharing start-up Ofo said it is scaling back its U.S. operations and pulling out of several cities, including the nation’s capital.
The company is closing out operations in the District after a nine-month run in a market where it struggled to get the city to ease regulations, chiefly to lift the restriction that caps its fleet at 400 bikes.
Ofo, one of seven firms in the District’s dockless pilot program, pulled out amid growing tension between the industry and city government. Operators, including Ofo, have said the District’s restrictions on the number of vehicles they can operate have hindered their ability to effectively serve the entire city and make a profit.
The dockless bikes, which rent for as little as $1, have been scattered on city sidewalks since the District launched a tryout in September; electric scooters followed this spring. The pilot was scheduled to end in April but was extended to the end of August.
In recent months, the District Department of Transportation has denied requests from the industry to change the regulation to allow more bikes on city streets. City transportation officials said they will make a determination about fleet size and other regulations for a permanent program after the pilot ends next month.
When asked about Ofo’s departure, DDOT Director Jeff Marootian said in a statement Monday that the pilot program was designed to help the agency determine the most effective approach for introducing the dockless technology to the District while ensuring public safety.
“We appreciate the participation of all the companies and look forward to using the information collected during the demonstration project to arrive at long-term options for the use of dockless vehicles in the District,” he said.
Ofo said it will not be part of that transition. A company spokesman said Ofo was reevaluating “markets that present obstacles” to “prioritize growth in viable markets,” and the District didn’t make the cut.
“There is a strategic restructuring going on globally with Ofo and the company is focusing on a couple of markets in the U.S.,” spokesman Jordan Levine said.
Levine said Monday that the company has been removing its bikes from city streets, working to recover vandalized and stolen bikes, and looking to donate the fleet and scrap the bikes that are unusable.
When Ofo arrived in the District, it offered free rides and promised to reduce car travel and increase bike commuting with a system that had proved popular in China, where the company operates millions of bicycles.
Also operating dockless bikes in the District are China-based Mobike and U.S. start-ups Spin, LimeBike and electric-bike company Jump. Bird and Skip (formerly Waybots) provide scooters. LimeBike has both scooters and bikes in its District fleet.
The city’s experiment with dockless bike-sharing has so far received mixed reviews. Some bike enthusiasts have embraced the services as another commuting option where biking is on the rise. But some residents have labeled the bikes “sidewalk litter” and complained about bikes blocking pedestrian traffic on sidewalks and home entrances.
The companies also faced issues with theft and vandalism that cut down on their fleet availability in a competitive market.
The city’s attempt to further regulate the industry hasn’t been popular. This spring, the DDOT dropped a plan to impose hefty operating fees and regulations on the operators. The plan sought to govern how the private companies operate after the pilot program ends, but it was widely criticized within the industry. Many bike advocates saw it as threat to efforts to grow bike and scooter travel in the city.
Other dockless companies have also expressed concerns with regulations. The Mobike app this week showed no bikes available for rent in the city, and the company said it will make an announcement this week about its operations in the District.
Chris Martin, vice president of international expansion and operations at Mobike, said the city’s regulations have not allowed Mobike to grow, and the company is shifting efforts to cities with the “right regulation and right environment.”
“We had a huge expectation and ambition to make it work,” Martin said.
Martin said the company anticipated that the District pilot program would last a few months and lead to a transition with the ability to operate more bikes.
“You need to have several thousand bikes” to be sustainable, Martin said.
Ofo said several U.S.-based staff are set to be laid off Friday. Ofo recently pulled out of Chicago, where the company cited regulatory hurdles. Company officials said Ofo will continue operations in some U.S. markets, including San Diego and Seattle.
Ofo previously announced plans to pull out of Australia, Germany and Israel.