Peking University Economics Professors Comment on the Urgency of ofo: The Outcome of Great Trial Tragedy

 Peking University Economics Professors Comment on the Urgency of ofo: The Outcome of Great Trial Tragedy

(Wen/Observer Network columnist Cao Ping)

Looking back on the development history of Internet e-commerce, we can easily find that the birth of shared bicycle is never the idea of someones flash of light, but deeply rooted in the matching infrastructure and technological revolution, which is the inherent logic of the operation of shared bicycle.

The Internet industry has had five generations of operating platforms in the past 10 years:

The first generation is the General Information Website, which we call the Internet Portal. It relies on the technology of optical fiber internet.

The second generation, when the existing fiber optic internet is combined with the mouse, we have a search engine, the representative product is Baidu.

In the third generation, when the optical fiber Internet and mobile Internet are combined, and the whole country is connected into a grid with a base station of 50 kilometers, the network realizes not only connecting people indoors, but also outdoors; not only connecting people sitting in silence, but also connecting mobile people, so that 1 billion netizens in the whole country are really connected together. This creates conditions for SuperVirtualStore, what we call Super E-Commerce. We know that the indispensable Internet products in life, such as Materialism Society, Ali, Dangdang and Jingdong, are the products of two networks in one.

Club-style e-commerce of the fourth generation of social attributes is formed under the condition of the significant improvement of smartphone functions. Headlines, millet, these Internet products are in the ascendant today.

The fifth generation is the most popular shared economy of last year, such as Xiaohuang car ofo, Mobai bicycle and Xiaolan, whose infrastructure is based on intelligent perception network.

These five generations of Internet e-commerce are advancing and upgrading step by step. The newer the generations, the more vitality they will have. Although sharing bicycles is a problem at present, I still think that the profit model of the Five Generations Operating Platform is advanced, and the reason why this advanced Internet product is difficult to sustain at present is that the position he gave himself from the beginning is wrong, which caused a series of irreconcilable problems.

In my opinion, sharing bicycles is essentially a kind of public goods (Local PublicGoods) providing public services. It has three typical attributes:

First of all, the existence of shared bicycles is to supplement the gap of government public management.

Lets take a scene in Beijing as an example. A little girl comes out of the corridor of her house in the morning. She just scans her bicycle with her mobile phone, gets on her bicycle and goes away. She may ride hundreds of meters or a kilometer to the subway entrance or bus stop. You will find that this distance can not reach the bus, the subway and the police, but it is really the most inconvenient distance for people to travel everyday. It is convenient for consumers and has reached the level of public transport facilities with legs raised. This is what the Chinese government and other developed countries wanted to accomplish in the past, but because of the traditional financial investment and high management costs can not accomplish the task. Who would have thought that Chinese young people could break through with ofo, Mobai and Xiaolan?

Secondly, sharing bicycles is a micro-profit product.

Close to the free price, sharing bicycles has no room for bicycle companies to raise prices after monopolizing the market through vicious competition. Similarly, compared with the cost of manufacturing, repairing, putting in and managing these bicycles, the current single profit model of sharing bicycles relying on the rental fee of one dollar riding and the limited advertising fee is obviously unsustainable.

Thirdly, sharing bicycles must be accompanied by public management resources and infrastructure. The most intuitive is to share bicycle parking parking lot and dedicated area, which is the development of shared bicycle to todays ordinary users reflect the most areas. There is no problem with 3 or 5 cars on the sidewalk at our ordinary subway entrance, but in big cities like Beijing and Shanghai, there are usually 3 or 500 bicycles in the same type of places, and some super hubs even reach more than 1000. At present, no city in China has parking space that matches the scale of bicycle sharing.

Unfortunately, the government, consumers and sharing bicycle companies themselves have never realized this essential attribute and regard it as a competitive product offered by private enterprises. This misorientation is the root of all problems:

First, shared bicycle companies cant see clearly.

He sold his public goods as a unicorn in the capital market, with a large amount of capital injection, the popularity of smartphones, excess industrial capacity and the relatively developed infrastructure in Chinese cities, which made them feel everything is ready, optimistic about the profit prospects, and believed that as long as there were investment and users, they could succeed.

Secondly, government departments can not see clearly.

He manages such a public goods service as a private enterprise. They neglect the convenience of sharing bicycles to urban management, but regard them as the trouble and burden of some department management (such as urban management), which forms a confrontational relationship. Where bicycles are shared, some governments send a garbage truck to load these trucks into the garbage dump. I used to drive my own car to chase the Chengguan for 1.5 kilometers. I just couldnt bear to watch their trucks keep loading their nice yellow cars to the garbage dump outside the city.

Moreover, consumers cant see clearly.

They enjoy this public service product as a private product. People always try to abuse the service of providing public goods with the service of competitive products, but the two are different.

Why do people always criticize the government for the smaller the government is, the better the market is, because the public goods services provided by the government are considered cold, because such services are obtained by the public at very close to zero price, and user experience is naturally inferior to competitive products. So a group of confrontational consumers came into being. They disliked the bicycle trouble, blocked their way and took up the place where they danced, so they threw the bicycle into the river. Many consumers are reluctant to finish the regular work of bringing bicycles back after using them.

In my opinion, sharing bicycles is an experiment of public goods services brought about by the great technological revolution. If from the very beginning they could operate in the public goods mode, enterprises and governments could integrate and involve the government instead of relying solely on capital, maybe the situation of these companies would be very different today.

Firstly, government departments can share a large amount of public management resources with shared bicycles. For example, a large number of urban management personnel are no longer driving to throw away bicycles, but can help dispatch and reorganization. At the same time, it can also decide whether to upgrade some sidewalks and squares according to the use of bicycles, and incorporate them into the overall planning of urban public facilities construction.

Secondly, it is not enough and inefficient to regulate the uncivilized behavior of consumers in the process of using bicycles only by virtue of morality.

Public goods need usage power to maintain. The mature law enforcement network formed by government departments can provide such convenience.

For example, the uncivilized behavior on high-speed railway emerges in endlessly, and railway policemen alone are often difficult to manage and dare not ignore. The existing measures to restrict uncivilized people to travel obviously do not have enough deterrent effect. But if we form a linkage agreement with the local police along the railway and send them to the local public security organs, the effect will be very different. Similarly, grass-roots law enforcement officers throughout the community can help to correct consumersuncivilized behavior in using shared bicycles.

More importantly, the government can also provide financial support for sharing bicycles. Take the recent deposit storm of the mini yellow car as an example, if the deposit is to be repaid by consumers, the local government should support the issue of sustainable debt to maintain, rather than allowing consumers to run. In the low-profit industry, without the care of the public sector, consumers do not cherish, competitive consumers in the case of destruction, by sharing the tens of billions of bicycles alone, it is impossible to carry down until profit.

In addition, technology is not yet fully mature is also an important reason.

Shared bicycle as the sixth generation e-commerce platform, relying on the smart city and perception network has not really been established, that is to say, our digital intelligent technology is still backward. The next generation of bicycles may be more comfortable and intelligent, such as auto-positioning, Auto-scanning face, sending pictures of the person throwing the car to the management platform, and chastising him. Only when the shared bicycle is really integrated into the future smart city system as an organic component, can it be operated benignly.

The conclusion is that the innovation of sharing bicycle products like ofo is 3-7 years ahead of schedule. As a public goods experiment, the deviation of positioning and the immaturity of conditions make people throw away the things that could benefit them as garbage. In retrospect, people will be afraid of such progress. So I think the dilemma of sharing bicycles this year can be summed up as great experiments, tragic endings. (The author is a professor at the School of Economics, Peking University)