On the other side of the ocean, the short-distance travel industry is also in full swing. Startups, unicorns, technology giants, governments and users have jointly created this treacherous shared travel ecosystem.

The unanswered questions about whether shared bikes can survive without subsidies, and who is responsible for short-distance travel by startups and governments in the domestic market development process seem to be able to be found among American peers.

At the beginning of June 2018, the US shared short-distance travel platform lime completed a round C financing of US $250 million, led by Google venture capital and alphabet, the parent company of Google, with a valuation of more than US $1 billion, becoming the fastest-growing Unicorn start-up company in the history of the US. Lime was established in January 2017 to provide the sharing services of pile less bicycle, electric bicycle and electric scooter. At present, it has raised four rounds with a total amount of more than US $380 million, including angel investor Wang Gang of Didi, venture capital institution coatue, IDG capital, Jiyuan capital, DCM, Nokia growth fund, ame cloud and micro light venture capital.

Biome's competitor in the field of electric scooters, bird, currently seeks to raise $200 million at a valuation of $2 billion.

Bird completed round C financing of $150 million at a valuation of $1 billion, while in March 2018, the company received $115 million in financing.

Internet giants are also making waves in the battle of short-distance travel: Uber, an American travel giant, took 2.5 years ago Jump, a start-up company acquired by US $100 million, has launched bike sharing services in Europe; Uber and LYFT, the US Derby, have recently competed in San Francisco to launch the shared electric scooter business; Uber and LYFT are also bidding for the company that has already run the pile sharing bike system in New York and San Francisco.

Players are decisive and generous. Even in Silicon Valley, where technology innovation is developed and financing environment is mature, it is rare for a company or an industry to see such a short-term price surge.

An investor in LYFT, a U.S. travel sharing company, told Tencent frontline that now investing in short-distance travel sharing companies is like investing in the early Uber. After that, these platforms are either acquired by large companies or listed independently, with attractive prospects.

However, there are also hidden dangers behind the rapid growth.

Since its birth, platforms such as bird and lime, like Uber, have encountered huge resistance from regulation.

Lime's founding team had long expected that they would include former senior officials of the U.S. Department of transportation and "bury" relevant talents in the team to deal with government relations. Toby sun (Sun Weiyao), co-founder and CEO of limes, told Tencent frontline that limes' advantage lies in its emphasis on and ability to do a good job in government relations. "The key is to find the right people and use the right way."

But coordination with the government is still a tough battle for the industry. Regulators often pay hundreds of thousands of dollars for "aggressive expansion" of short-distance platforms.

1. No Uber expansion

Uber's radical expansion previously seemed to be an unavoidable "evil" of similar platform development. Scale is crucial to the user experience of the shared travel platform, and the number of cars and cities covered is one of the preconditions for convenient use of users. Uber's previous "aggressive" expansion, because of its remarkable effect, once became a method that the company was proud of and rivals tried to emulate. However, this "wolf" culture led to frequent accidents, and Uber also suffered double blows from products and public relations.

The start-up travel platform is competing for the market every second. However, Toby sun stressed to Tencent's frontline that lime does not follow Uber's old path and must first reach an agreement with the local government before paving.

Brad Bao, co-founder and chairman of lime, told Tencent's frontline that "most of the operating licenses in more than 30 market segments are exclusive, which is the barrier to competition". Specifically, there are two types of exclusive business of lime, one is to sign an exclusive agreement with the municipal authority for a period of time, and the other is to "not specify the exclusive business, but the government only cooperates with lime".

Brad Bao said that the competition in China is too fierce due to the lack of barriers. "You have seen the situation of the Chinese market. There are nearly 70 operators in the peak period, and no one can receive money.". On the one hand, it makes every step of lime platform relatively solid, but on the other hand, it also brings some "troubles".

First, the company's time cost becomes relatively uncontrollable. A middle-level employee of a shared travel platform told Tencent frontline that unlike the taxi market, the products of short-distance travel companies do not touch the cheese of the government, so it is relatively easy for government public relations. But Brad Bao told Tencent's frontline that it took longer than expected to enter some cities.

For example, in New York City, the city has half government subsidies and half enterprise sponsored Citi bike, a pile sharing bicycle platform, which has been in the market for more than a year.

After entering the market, it's a vicious battle to compete with the already popular Citi bike market.

Brad Bao told Tencent frontline that "the pile free cars we put in and the pile cars we have run can be combined organically, which are all part of the urban short distance travel solution, which has been verified in the operation data of Seattle and other cities." Secondly, each region of the United States has different government regulation rules. A city or even a community may have different standards, which not only challenges the scale, but also sets the ceiling of a shared platform to some extent.

For example, San Francisco's current policy in the electric skateboard market is to launch a 24-month test program, which only allows five shared skateboard platforms to be launched, and as many as 12 companies have submitted operating licenses.

Even if it gets into the government's list, the test program will only allow five companies to launch a total of 2500 scooters.

A silicon valley investor told Tencent frontline that even if the government deregulates, it is still easy to see bottlenecks in the development of shared short-distance travel platforms in the United States. For the country on the wheel of the United States, consumers are not so easy to switch to other means of transportation.

2. How to fight without wasting of money

At least the capital market has confidence in short-distance travel platforms. The cost of using a lime bike for 30 minutes is US $1 each time. Students can enjoy half price, only US $0.5.

At the beginning of 2018, lime launched the electric scooter business in the United States, which is also the first travel platform to launch the shared scooter in San Francisco, Washington and Miami. According to lime's official introduction, the company uses each scooter between 8 and 12 times a day.

Lime has never implemented a large-scale subsidy policy except for distributing some helmets and other peripheral products as user gifts. Toby Sun told Tencent frontline that without any subsidy, the company has achieved overall revenue balance and overall multi-month profit. Brad Bao and Toby sun were management partners and investment directors of Renaissance Kunzhong capital respectively.

In the summer of 2016, they studied the bike sharing industry and found the opportunity of "China model" in the U.S. bike market. Compared with China's shared bicycle platform, the market competition environment of limes is not so "sinister" and there is not much vicious attack from competitors.

The average loss rate of the shared single vehicle platform in the United States is about 1%. Compared with us competitors, lime has the capacity advantage and operation experience of Chinese manufacturing industry.

Brad Bao told Tencent's first line that lime's integration ability based on China's supply chain is another key factor for its ability to operate in the United States. "The production and manufacturing capacity accumulated in China for more than 20 years has core advantages Lime's reverse model (China procurement, U.S. operations) directly turns productivity into services, eliminating the channel link of traditional commodity sales. " Fujita, a bicycle manufacturer based in Tianjin, is the manufacturer of lime's bicycles. "It's an exclusive partnership with lime outside China," says Brad Bao.

The manufacturer, whose production will reach 24 million units in 2018, not only produces its own brand bicycles, but also works as an agent for the small yellow car ofo, a Chinese pileless bicycle operator. Brad Bao said the expansion of bike sharing overseas "looks like the global development of China's business model, but fundamentally, it is based on China's industrial structure and core advantages."

In the United States to do such a strong operation project as sharing platform, the operating cost becomes crucial. Brad Bao said that for large cities, lime plans to put vehicles in the densely populated central urban areas at 1:30 per car person ratio, while for the whole city, including the suburbs, the proportion is about 1:100.

Brad Bao revealed in November 2017 that as of the end of 2017, the launch plan of lime was 60000-100000 vehicles. Compared with the vast Chinese market, this number is naturally small, but compared with the largest competitor of limes in the United States, motivate is the second to none. Ten years after its opening in the United States, motivate now has about 30000 vehicles in operation. Lime would not disclose other specific operation data, but Toby Sun told Tencent's first line that the operation cost is constantly optimized.