• A photo that shows bicycles of the Mobike and Ofo sharing companies on the street in Shanghai.

A photo that shows bicycles of the Mobike and Ofo sharing companies on the street in Shanghai. (Photo : Getty Images)

Despite China's bike sharing startups raising generous financing from tech giants and big-name venture capitalists, it currently has been facing challenges on designated parking stations and repeatedly reported vandalism in multiple Chinese cities.

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Bike sharing, also called as bike rental, already existed in major Chinese Cities before the emergence of bike sharing apps last year.

Traditional bike rental was not taken up by very many people. This is because of its tedious process wherein users need to get registered at specific offices before using it, and are required to take and return the bike to designated parking stations.

Mobike is the leading player in the booming bike-sharing industry, which secured $215 million in a financing round led by Tencent. Together with its competitor Ofo, both companies simplified the traditional bike rental process with mobile applications.

Users register themselves and pay deposits in their smartphone using the mobile app. Users will also have the convenience to park their bike almost anywhere in public after use.

Although this is attractive to users, the "no parking station" design brought challenges to bike sharing companies in terms of bike management.

There are several photos on social media websites showing unmanaged sharing bikes. They are either in chaotic piles covered with thick dust or just lying on the ground with broken bicycle chains.

What's worse is that some criminals either steal or dismantle the GPS component on Mobike's bikes. Some even sell the sharing bikes on the internet for a quick profit.

Tencent tech reported in December last year that Mobike saw its bikes sold second-hand with the GPS part removed starting at a price of 2,000 yuan.

Ofo faced more severe challenges with regards to this, as their bikes do not have a GPS component embedded in it.

Due to the report, major classified ads websites stated that they will use technical measures to stop the trading of these sharing bicycles as second-hand bikes.

To avoid this, Mobike partnered with the local authorities of Shenzhen to regulate the use of sharing bikes.

Huang Xue, a spokesperson responsible for Mobike's public relations, said: “Mobike designed its bikes with smart locks, which can help us locate bikes and spot malfunctions and other situations."