The shocking *** bicycle cemetery, why do people still invest when they know they are losing money?

With the help of capital, the bicycle-sharing industry was once a hot topic, which not only revitalized traffic, but even brought some bicycle factories on the verge of bankruptcy back to life. But after the carnival, there was a lot of chicken feathers left on the ground. The number of exclusive bicycles that were constantly being manufactured on the production line was obviously excessive. Those bicycles that had no one to deal with were piled up on the outskirts of the city, forming a series of shocking bicycles. *Enjoy the bicycle graveyard. Photographer Wu Guoyong used drones to record this spectacle in more than 20 cities in China. Looking from the sky, bicycles of various colors are piled together like a beautiful flower field, which is a silent irony of capital.

*** Shared bicycles have been introduced to China since 2007. At first, they were led by the government. They were mainly bicycles with docks, which meant that they had to be returned to a fixed location. Although this model can solve the short-distance transportation needs of some people, it is very limited because it can only be used in urban areas. Since 2010, with the rise of mobile Internet, many companies operating dockless shared bicycles have appeared in China, such as Mobike, ofo, etc.

For a time, many private bicycle companies emerged in China. As of July 2017, there were more than 60 companies in total. But soon most of the private bicycle companies closed down due to lack of funds, leaving many abandoned bicycles piled in the corners of various cities. They were finally centrally processed by relevant departments and turned into steel waste.

Why do so many luxury bicycles go out of business? The reason is that its charges are too low, most of which are 0.5 yuan per hour or one yuan per hour. According to data, the cost of a bicycle is 500-2,000 yuan. Calculated at one yuan per hour, it must be used 500-2,000 times to recover the cost. In fact, many bicycles have been artificially damaged, such as the lock being picked off. Or throw it into the river. Add in various costs such as building a website, publicity, labor, etc. In fact, most companies cannot make any money and will naturally go bankrupt at a loss.

With the passage of time, the most popular bicycle companies such as Coolqi, Wukong Bicycle, 3Vbike, Xiaoming Bicycle, and Machichi Bicycle have predictably closed down one after another, and Mobike and Ofo have gradually formed in the market. These two giants. The reason why Mobike and Ofo can continue to operate does not rely on their own profitability, but on rounds of financing. Taking Mobike as an example, from its establishment to July 2018, it has raised eight or nine times. , on June 16, 2017, it completed a new round of financing of more than US$600 million.

From the current point of view, the bicycle sharing model is operating at a loss, so why are so many companies still playing it happily? The editor believes that there are three reasons:

1. Defrauding users of their deposits and defaulting on funds owed to suppliers and wages to employees. On March 27, 2018, Xiaoming Bicycle officially entered bankruptcy proceedings, becoming the first shared bicycle brand to go bankrupt. Since its establishment in September 2016, Xiaoming Bicycle has been in operation for less than two years before it went bankrupt. As a result, many users were in arrears with their rent. According to the news, the deposit for Xiaoming Bicycle is 199 yuan. The number of users is close to 800,000, and the deposit is about 150 million yuan. After the collapse, users found that they could not get their deposits back, and suppliers and employees could not get the corresponding money. So where did the money go? Clearly, shareholders were swept away.

2. Steal money from venture capital and capital. We can see that most of the luxury bicycle companies can only start with angel wheels. Then the people who run this project can manipulate the expenses for personal gain. The simplest one is that a bicycle costs 500 yuan, and then Reimburse 1,000 or even 2,000 yuan. The editor has ridden a bicycle several times, and found that this kind of bicycle is really bad. It weighs 25 kilograms, the chain has no lubricant, and it is very strenuous to ride. It is not as good as the bicycle I bought for a few hundred yuan, but I checked online. Look, the announced purchase price of such a bicycle is one to two thousand yuan. In fact, exclusive bicycles are purchased centrally and the price can be lower, so there is a lot of articles in it.

3. Create a national monopoly and obtain stable profits. The reason why a lot of venture capital and capital is invested in bicycle-sharing companies is of course not for the rent, but to cultivate a national monopoly company and then obtain excess profits. Judging from the current situation, the market has formed two giants, Mobike and ofo. In the future, one of them will surely fall, or the two will merge into one, and the market will eventually be controlled by a certain group.

After forming a national monopoly, how will Mobike or ofo make money?

First of all, we will strengthen the management of bicycles and improve service quality, such as increasing the number of delivery locations to prevent vandalism and theft.

Then the rent will be increased, and at the same time, advertising on the car body will be placed to increase revenue.

But the editor believes that these are secondary, and the most important thing is actually the APP traffic entrance. We know that the most important thing for Internet companies is traffic, and traffic is value. If you want to use a shared bicycle, you need to open the app every time you use it, so that users form a fixed habit. In this way, the Xiangxiang Bicycle APP can do news, online shopping, search, services and other content at the same time, so that it can obtain user traffic at a low cost.

If 200 million people in China use bicycle sharing, then the bicycle sharing company that monopolizes the market will become an Internet giant.

That’s why we can see a ridiculous scene. So many private bicycle companies can obtain rounds of financing from millions to hundreds of millions of dollars, and these scrapped bicycles naturally become Cannon fodder.