Note: This article by Rita Liao was originally published by TechNode. It has been re-posted here with permission. For some background on dockless bike share, check Radii’s China Tech Explainer on the subject.

Despite their immense popularity, bike rentals in China are giving daily headaches to local governments for users’ illegal parking, vandalism, and traffic violations. But bike-rental is seeing some hope in fixing its battered reputation. A report co-published by Amap, Tsinghua University, Alibaba Cloud, ofo and other industry researchers shows that traffic congestion across the nation is in decline during Q2 of 2017 (in Chinese), thanks in part to bike sharing.

77% of the 100 cities included in the research showed improved traffic conditions with short-distance driving (within 5km) declining from 57.1% in June 2015 to 34.7% at the time of the report. Reduced traffic is particularly salient in the famously congested capital of Beijing, with 60% of the roads around subway stations experiencing an improvement. Throughout the city, there has been a YoY 4.1% reduction in congestion. Of the 20 cities that ofo has most heavily targeted, 19 of them have seen a significant decline in traffic congestion.

New regulations on the equally popular ride-hailing services have also contributed to the positive shift, says the report. Last July, China’s central authorities formally legalized online ride-hailing services, followed by over 100 local municipalities’ efforts to regulate the industry starting last October.

The bike-rental industry, dominated by ofo with 65% of the market share followed by Mobike, is crowded with 30 or so profit-minded startups who want a slice of the booming market. With the promise of reduced urban congestion, local governments might grow even more keen to work with these startups, bringing the car-clogged China back to the kingdom of bikes.

Cover image: AP Photo/Ng Han Guan

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