The Chinese bike-sharing company Ofo Inc. just secured another $700 million, outraising Beijing Mobike Technology Co., which added $600 million to its coffers last month.
Except it isn't bike sharing, is it? As I have shouted in this newsroom more than once, these startups are in the business of bike rental. Why do they keep insisting they're part of the sharing economy?
If you don't know the difference, look up the term inventory risk.
For Ofo, that means owning 6.5 million bikes in 150 cities from San Francisco to Cambridge, England, with a target of 20 million bikes by the end of the year, funded by a total of $1.35 billion in cash. Mobike said last month that it has 5 million bikes in 100 cities from Manchester, England to Fukuoka, Japan.
I suspect that Ofo, Mobike and their brethren insist on using the "sharing" moniker because they want to be just like Uber Technologies Inc. and Airbnb Inc.
And who wouldn't want to be a heptaconta-unicorn? (That's a $70 billion valuation. In the startup world we're allowed to invent terms.)
One thing bike-rental companies have in common with the car- and bed-share players is that they remove the middleman. The dockless business model means you just walk up to a bike and scan a QR code with your phone, while with Uber and Airbnb you use an app.
You haven't really removed the middlemen, though -- you've just outsourced them to the cloud. The startups themselves are the middlemen's programming overlords.
At least Didi Chuxing, Uber and Airbnb are trying to expand beyond their initial business models. Airbnb is adding experiences so that dreadlocked Quinn can help you surf and sleep under Santa Monica's stars. Uber wants to expand beyond car-to-passenger matchmaking and move into driverless cars (or they will, when they find a management team).
Bike startups haven't yet found a new future. Some of them are tapping into advertising, which is more a short-term survival tactic to leverage the inventory they own than a long-term plan.
Perhaps their next phase is to offer you the chance to sleep under a bridge in Shanghai. Or better yet: driverless bikes.
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Paul Sillitoe at firstname.lastname@example.org