Essay: Bicycle Rental Industry In Singapore - Overview & Future Prospects.

The current bicycle rental industry in Singapore

Question:

Discuss about the Strategic and Business Management Bicycle Rental Industry.

The study focuses on bicycle rental industry in Singapore. It can be seen that the Land Transport Authority (LTA) of Singapore is putting emphasis on the bicycle rental industry unlike bike rental industry. However, the idea of bicycle rental industry is gaining attention among the consumers of Singapore. It can be said that private market players now occupy the bicycle rental industry in Singapore. The bicycle rental industry in Singapore is not considered as a separate industry. It is treated as the fragmented industry of the bike rental industry. The Land Transport Authority of Singapore is planning to develop the bicycle rental industry as a full-fledged industry so that it can attract many companies to invest in it. Initially, Land Transport Authority of Singapore is planning to launch initial three trials in different sections of the country.

The study will focus on the detail overview of the current bicycle rental industry of Singapore along with future prospects of it. It will also describe about the different players of the bicycle rental industry along with the company size, market share, and fleet size. It will also describe about the position of the current players in the Singapore market of bicycle rental industry. The macro environmental factors of the industry are described in details in Singapore market along with its impact on the affordability of the industry. Apart from that, by using Porter’s five forces framework, the attractiveness of the bicycle rental industry as well as the nature of the customers is explained.

The overview of the bicycle rental industry in Singapore is not independent. Consumers of Singapore don’t have any clear idea about the bicycle rental system. However, the Land Transport Authority of Singapore is trying to seek proposal from the experts of the industry regarding implementation of public bicycle sharing in Singapore. The authority questioned the consumers regarding their consent about the industry (Fang 2017). The authority proposes various operating models as well as sponsorship for the development of the industry. Bicycle sharing is a scheme created by LTA. It is a rental scheme that consists with a wide network of bicycles, which are distributed around various areas. However, the users are charged with a fee for a shorter period (Abdullah 2017).

The new bicycle sharing scheme is popular among western and northern parts of Singapore. Apart from private players of bicycle rentals, LTA of Singapore has reassesses the planning of supporting many local companies that will rent bicycles to the consumers as well as the China based company in order to roll out thousands of bicycles (pay-as-you-use) for the coming two years. The scheme of LTA is being scheduled to launch more than 2300 bicycles in the Tampines, Marina Bay and Pasir Ris region of Singapore (Vasagar 2017). The scheme has attracted tenders from almost thirteen firms of Singapore. The bicycle scheme is a self-service bicycle scheme that will be ventured by the end of 2017. In the docking areas of Singapore, LTA has decided to incorporate more than 1000 bicycles 24*7 for the convenience of the consumers. It is seen that the government of Singapore is encouraging the use of the cycles to the consumers while providing an effort to curb the emissions of carbon monoxide and carbon dioxide along with reduction in road congestion that will improve the health of the citizens of Singapore (Thampuran 2017).

The different players and their market share

In the Singapore market for bicycle rental industry, there are three major players that are ruling the industry. The three major players are Ofo, Mobike, and oBike.

oBike: The company is the first Singaporean based company that provide station less smart cycles and bikes share system in the country. The bicycles shared by oBike provide a freedom to the riders for becoming environmental friendly and healthy. Apart from that, they are cheaper than a cab but faster than walking (Fang 2017).

Mobike: Mobike is a Chinese bike sharing company that also shares bicycles in Singapore. It is the largest bicycle operator in the world. Apart from China, it has a wide market capture in Singapore.

ofo: ofo is a Chinese bike sharing company that uses mobile app for availing the service. The sharing services provided by ofo are safe as it uses pass code to lock the cycle (Thampuran 2017).

The scheme used by LTA of Singapore will launch a fleet of 2300 bicycles in different urban regions of Singapore towards the end of 2017.

Macro environmental analysis of bicycle rental industry of Singapore has a greater influence on the bicycle rental industry. The macro environmental analysis are described by using the framework of PESTEL analysis of the country. Over the last decades, it is seen that Singapore has shown extraordinary growth in the economy of the country. In today’s world economy of Singapore is considered in the category of high economy country. However, the growth is driven by several factors of external demand, private consumption expenditure, investments, etc (Abdullah 2017). However, the PESTEL analysis of the country will be described in the following.

Political risks in Singapore are quite low. It can be said that Singapore enjoys almost lowest political risk in Asia. Singapore is a democratic country while the stability of living and doing business is high. Hence, it can be said that bicycle rental industry in Singapore will not face any political disturbances regarding its business expansion and the new entrants of the industry (Cheong 2017).

Economy of Singapore is developing at a very fast pace. However, the per capita income of the country is considered as the highest in ASEAN. The financial and legal frameworks also help well in the growth of the business and industries in Singapore. Apart from having positive aspects, there are few constraints of the economic performance of Singapore such as rising labour costs, shortages of labour and declines in productivity (Wuerzer and Mason 2016).

Social factors of Singapore follow traditional culture. The young generation of the country usually follows western culture and values. The materialism desire among the residents of the country is present which encourage people to work hard. It increases the productivity of the nation. It leads to the expectation of the business sectors while improving higher purchasing power of the customers. This ultimately helps in the growth of the industry in Singapore (Fricker and Gast 2016).

Technological advancement in Singapore is high. The change in lifestyle of the consumers as well as the development of the business is responsible for effective communication and increased development of IT infrastructure. The networking system as well as the developed IT infrastructure aids in the growth of businesses in Singapore. The penetration rate of broadband internet in household purposes is more than 70% (Ye, Chen and Dai 2013).

Porter's five forces analysis

Regulatory bodies of Singapore have favourable and transparent legislations. Apart from that, few trade regulations and business laws have to be followed by both domestic companies and foreign companies while doing business in the country. The regulations are Content regulation, export and import procedures, Intellectual Property Rights, Electronic Transaction Act, tax issues, etc. The legal frameworks help in thriving business in the country (Bin 2014).

It can be said that the Ministry of the Environmental and Anti-pollution unit of Singapore works in the environment perspective for maintaining the quality of air and other environmental factors. Pollution is the main concern of the government that will increase the hazards in the health of the people. Environmental laws and regulations regarding protection of environment are the main areas of concerns of Singapore government (You, Lee and Hsieh 2017).

The macro environmental factors of Singapore have a direct influence on the bicycle rental industry of the country. The political factors are in full support of the development of the industry. Government of Singapore along with the Land Transport Authority of the country is focused on improving the bicycle rental industry in a full fledged way. Government along with LTA of Singapore is responsible for the development of new networks of paths across the cities. Research about the nature of consumers have been stated that the people are ready to hire bicycle for shorter distance as it is pollution free as well as cycling is a good form of exercise. It is also described in PESTEL analysis, that the penetration rate of internet in the household broadband is high. It is almost 70%. Hence, the major players of the industry can use technologies of mobile by developing mobile applications that will help the customers to use the services provided by the company (Zhang et al. 2015).

The legal regulations of the country regarding the internet usage and other trade laws also help in the growth of the business in the country. Singapore is a developed economy and the per capita income of the citizens is high. It will help the consumers in availing the services provided by the domestic and international companies of bicycle rental in Singapore (Raviv and Kolka 2013). Apart from that, it is seen that the LTA and the government of Singapore is busy in developing schemes and plan regarding the development of the industry independently during the end of this year. Another aspect for the favourable growth of the industry is that it is pollution free and will create a positive impact on the minds of the consumers. Technological advancement in Singapore will help in manufacture of bicycles and e-scooters at a lower cost (Drynda 2014).

Bicycle rental industry is an emerging industry that is still counted as a part of the bike rental industry of the different parts of the world. However, it can be said that the popularity of the bike rental industry is more than that of bicycle rental industry. The Land Transport Authority of Singapore has conducted a survey relating to the acceptance of the system of bicycle renting. Most of the consumers are very much enthusiastic about the concept of renting bicycle for travelling to shorter distances. However, the attractiveness of the industry is described in details by using the framework of Porter’s five forces for the industry (Shaheen and Cohen 2013).

The future prospects of the bicycle rental industry in Singapore

It can be said that the bargaining power of the buyers are high for this industry. It is already discussed earlier that the industry is in a booming stage. Government is trying to develop the industry in the country by conducting research on the consumers of Singapore. The buyers of the industry have different types of options for renting bicycles (Shu et al. 2013). Hence, the major players of the bicycle rental industry like oBike, Mobike, etc. have to formulate strategies that will attract the consumers of Singapore in order to avail their services. The major players can accommodate many facilities in order to lessen the bargaining power of the buyers (Lee and Huang 2014).

As the industry has not flourished well in the country of Singapore, hence the bargaining powers of the suppliers are low. The suppliers of Singapore do not have ample amount of companies in order to provide them with required raw materials. The suppliers also cannot bargain with them, as the competition is low. On the other hand, it can be said that, the companies can quote prices to the raw materials providers for the manufacture of bicycles or e-scooters to the suppliers, which may not suit to the prices charged by the suppliers (Dahles and Susilowati 2015).

In this industry, the threats of substitutes are low. The bicycle rental industry is an extension of the bike rental industry. However, it can be said that, it is a pollution free industry that incurs almost no pollution to the atmosphere. There are many modes of transport present in Singapore. But, the other modes of transport like buses, trains, bikes and other vehicles are responsible for emission of carbon dioxide, carbon monoxide and other polluting gases to the environment. Therefore in this context, the substitutes for e-scooters and bicycles are almost nil. The industry can flourish well in Singapore without any relevant threats of other industry (Lacy and Rutqvist 2015).

As the industry is new in Singapore as well as in other parts of the world, hence many companies outside Singapore are interested to invest in this industry in Singapore. However, government of Singapore as well as Land Transport Authority of Singapore is trying to develop many plans and schemes that will help in flourishing the industry. Besides this, it can be said that LTA support Singaporean domestic companies more than that of foreign Chinese companies. Hence, the threat of substitutes to the domestic companies of bicycle rental companies is low (Chiu and Leng 2017).

The industry has competition with other modes of transport system in the country such as road transport, water transport, etc. However, it can be said that the road transport are considered as the direct competitors of the industry. Consumers of Singapore can opt for many forms of road transport such as buses, trains, trams, auto, taxi, etc. in order to travel for their destinations. However, bicycles are used for travelling for shorter distances. Hence, the competitive rivalry is high for bicycle rental industry (Huapu 2017).

The impact of macro-environmental factors on the industry

Conclusion

The report focuses on the competitiveness of the bicycle rental industry in Singapore among the market players of the industry. Reports and research has predicted that the industry will flourish in Singapore, as there are many major players like oBike, Mobike, etc. It can be said that the foreign companies are attracted to Singapore as the political stability as well as the technological advancement of the country is high. The Chinese companies of bike rentals are starting to rent bicycles or e-scooters not only to the Chinese market but also to the Singaporean market. It can be seen that the bicycle rental industry in popular in many countries except Singapore such as United Kingdom, Taiwan, Malaysia, China, etc.

The affordability of the LTA in Singapore market is high as they are ready to invest in various schemes related to the growth of the industry. Cultural factor of Singapore is good because the per capita income of the country is high. Hence, the consumers of Singapore will avail the service provided by the bicycle rental companies of Singapore. Till now it is a fragmented industry in Singapore. However, LTA and government of Singapore are trying to separate it out from the bike rental industry by launching a trial on the various areas of Singapore. However, it can be said that the industry is flourishing mostly in the urban areas when compared to rural areas of the country. The PESTEL analysis describes the attractiveness of the industry in the Singapore market in a detailed manner.

References

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