Ofo: A Bike Sharing Firm from Campus

Abstract

After the financial crisis of 2008, with the development of information technology and various innovative mobile innovation applications, the sharing economy entered a rapid growth period. The case of the bike sharing company ofo elaborates on a wide range of strategic issues that a sharing economy firm may face when creating its business model, generating unprecedented value to the customers, challenging traditional business models and rules, and competing with other companies. The bike sharing company ofo was founded by Dai Wei and his partners at Peking University (PKU) in 2015. According to its website, ofo is the world’s first bike sharing platform with non-fixed parking locations (available anytime, anywhere). From PKU, ofo expanded to cover more than 200 universities and colleges in 22 cities across the country by October 2016. With more than 40 million cycling trips provided, it became China’s largest provider of campus transportation, serving both students and faculty with a convenient, green, low-carbon, and efficient bike sharing service on campus. The first part of the case describes ofo’s history, its business model, financing timetable, product model, and pricing and revenue model. It then discusses ofo’s attempt to enter cities with its plan of “bike sharing in cities all over China.” The second part of the case describes the rapid development of bike sharing and bike rental in China, and ofo’s competition in the bike sharing industry.

The case was developed by WANG Rui of Peking University, and QIAN Liping of Chongqing University, with the helpful collaboration and support of ofo. The case was developed to provide the basis of classroom discussion rather than to illustrate effective or ineffective handling of a management situation.

This case was the Nominated Case Award winner of 2016 Global Contest for the Best China-Focused Cases.