Research on Risk Management and Profitability of Bike Sharing Business Model

Abstract

People’s needs for personal leasing create the explosion of sharing economy systems, bike sharing meets people’s demand for short-distance and eco-friendly travels. Therefore, many bike sharing enterprises emerge as the times require. In the context of bike sharing, risk management and profitability are vital factors that affect the survival and sustainable development of shared-bike enterprises. However, today, the profit model is unclear, and many profit issues occur in the whole bike sharing industry. This paper investigates and classifies potential causes of the lack of profitability of shared-bike enterprises and how companies can tackle those issues. Specifically, the literature analysis method and case study are used for the research. We propose the substance of bike sharing, which is the basic premise for profitability. Then, we analyze the deficiency of bike-sharing platforms and profits and costs of OFO, a typical example of a bike sharing failure. After which, management risks are segmented into financial risk, operational risk, credit risk, technical risk, and social risk and explained in further detail. We subsequently discuss feasible solutions to deal with problems at present and summarize them into five main categories of strategies: cost reduction, multiple profit methods, internal supervision system establishment, technical development, and social publicity. The paper provides effective suggestions for bike sharing risk management and profitability. It aims to offer a reference for shared-bike enterprises and other sharing economy organizations to maintain long-term and stable progress and development, contributing to the shared-bike business model and even the sharing economy systems.