In order to relieve the traffic congestion and reduce the public travel costs, Hangzhou Municipality has given strong policy supports to bus companies and financed them on the basis of their service quality. After years of effort, public transport in Hangzhou has made great progress in service quality. The passenger share ratio of Hangzhou’s public transport increased to 22.2% in 2007 from 7.8% in 1987, making great contribution to the social and economic development of Hangzhou. Nevertheless, survey conducted by local organizations indicated that 80% of the interviewees are still unsatisfied with the current traffic situation of Hangzhou and 84.74% of them thought the traffic congestion lowered the life quality.

The urban traffic development strategy “Public Transport Priority” was  jointly issued in December 2006 by four ministries and commissions including the Ministry of Housing and Urban-Rural Development (MOHURD). Hangzhou Municipality put forward the “Five-in-One” Urban Public Transport Service System, including  “public bicycle” in the public transport service system for the first time. 

Coordinated by Hangzhou Public Transport Group Co., Ltd., the CPC Hangzhou Municipal Committee and Hangzhou Government established Hangzhou Public Bicycle Service Development Co., Ltd. (abbreviated as “Hangzhou Public Bicycle Service”) in April 2008. The company is responsible for the construction, operation and service management of Hangzhou’s public bicycle system, introducing the practice of free rent within one hour and staged rent after the first hour. The first row of 61 public bicycle service outlets was open to the public in May 2008 and a total of 2800 public bicycles were put on trial operation.

• Making Longterm Public Bicycle Development Planning (2008 to 2010）

CPC Hangzhou Municipal Committee and Hangzhou Government developed the "Opinions on Strengthening Construction and Management of Public Bicycle System" and "Opinions on Further Practice of Preferential Development Strategy of Public Transport and Building of Quality Public Transport” in 2008 and in early 2010 respectively. According to the Opinions, the 1st stage of the construction program shall be completed at the end of 2009 with up to 1,000 renting outlets in main urban districts that housed 50,000 bicycles. By 2010 the public bicycle system should be extended to Hangzhou Economic & Technological Development Area (Xiasha District), Hangzhou Hitech Development Zone (Binjiang District), Xiaoshan District and Yuhang District. By 2012 the system should cover all five counties with a total of 60,000 public bicycles from 2,400 renting outlets, of which the central area of these five counties should be afford 200 to 400 public bicycles from 10 to 20 outlets. By 2015 the number of public bicycles in Hangzhou should total up to 90,000 and the outlets reach 3,500, of which the central area of these five counties should be home to 500 public bicycles from 25 outlets. It is planned that there will be 175,000 public bicycles at least in Hangzhou and the sum is expected to be 200,000 if possible.

• Exploring the Sustainable Development of Public Bicycle (in 2009)

To ensure the sustainable development of public bicycle, the government has put forward a plan of financial support to infrastructure construction. The remaining costs should be covered by enterprises themselves so as to reduce the financial pressure of the government. The model of “public financing and corporate management” ensures the sustainable development of Hangzhou public bicycle system.

The governing authorities, including Hangzhou Urban and Rural Construction Commission, Hangzhou Urban Planning Bureau and Hangzhou Municipal Commission of City Administration and Law Enforcement, provide support to the development of service outlets:

• Hangzhou Urban Planning Bureau laid out the planning of service outlets and developed the plan connecting the public metro system. For those places where public bicycle service outlets are to be placed, Hangzhou Construction Committee requests the designers to specify the land and preempt the space for the development of public bicycle system when examining projects such as stations, large recreational areas, large residential quarters, scenic spots and sports venues. 
• Hangzhou Public Bicycle Company, a subordinate to Hangzhou Public Transport Group, is in full charge of the project. Since its establishment, Hangzhou Public Bicycle Company has been engaged in continuous innovation in service, management and operation with the support of the local governing authorities. Based on high technology, the quality of the system has been continuously improved by developing general planning, giving standards, creating new models, optimizing services and exploring potentials. At the early stage there were only 61 outlets with 2,800 public bicycles. After six years of development, the system boasts 3,111 outlets with 78,000 public bicycles (July 2014). The highest daily rent of bicycles reached 411,400. The ratio of public free use is 96% and the survey shows 95% of the public are satisfied with it.

• Stable Financing Through Municipal Supporting Funds

At the time of the establishment of Hangzhou Public Bicycle Company in 2008, CPC Hangzhou Municipal Committee and Hangzhou Government thought that the government would support the infrastructure construction of public bicycle system with public investment. All other resources, including advertisement and service outlets, should be developed on a free basis while the income should be used for operation of the system. Meanwhile the central and local government also arranged financial supports for all green energy characteristics of the public bicycle system. Hangzhou Municipal Bureau of City Administration and Law Enforcement also exempted or reduced the cost of road occupancy for the renting outlets to reduce the operating costs.

• Technical Support: Cooperating with Colleges & Universities to Improve Intelligent Management

Through cooperation with colleges & universities such as Hangzhou Dianzi University and Zhejiang University of Technology, and by means of data analysis, Hangzhou has developed systems for smart bicycle scheduling, rent management and system to identify possible mechanical failure. 

• Human Resources: Colleges & Universities, Communities and Social Elites Participate in Volunteer Service Activities

According to the agreement jointly signed by the seven colleges & universities, including Zhejiang Gongshang University, and Hangzhou Public Bicycle Company, the Collegiate Volunteer Service Center for Public Bicycle System will be set up with volunteers participating in cleaning and maintenance of public bicycles, promoting green travel concept. 

Since the traffic service system of public bicycle in Hangzhou was put into operation, the results are far beyond the original intention of solving the problem of "the last kilometre after bus travel”. Certain results have been achieved, such as promoting energy savings and emissions reduction, constructing low carbon cities, advocating green travel, improving the urban grade, advancing the city image and improving the physical quality of the citizens.　　

1. Integration with the public transport system of the city basically solves "the last kilometre after bus travel". The lease area has been transferred from scenic areas to urban areas. Renting period also begins to focus on travel peak in the morning and evening (accounting for about 45% of daily rents), suggesting that public bicycle rental has transferred from the initial visit in scenic spot to normal travel. 
2. To further improve the share rate of bus trip. Combine the favourable terms of public bicycle rental with bus trip to attract more people to choose buses. The share rate of bus trip is increased further, which plays a certain role in reducing the pressure of urban road traffic, improving road traffic conditions.
3. To advocate green travel and promote the development of urban low-carbon economy. According to statistics in 2013, the annual average daily rent amount was 282,800, the average rent time 33.6 minutes and the average trip distance about 3.0-5.0 km. The fuel charge saved in a year is equivalent to all the investment made by the government for public bicycles.
4. Public travel should be convenient and reduce the cost of public transportation. According to statistics, more than 96% of the public bicycle rental has been free since this system was released. At the same time, the company also associated the favourable terms of free rent for public bicycles with conventional public bus trip. 

Five major problems have been identified by the City of Hangzhou:

"Difficult to distribute": The outlets of public bicycles in Hangzhou are all on sidewalks. Due to limited urban road resources, the outlet distribution gradually became a problem. To find a solution the local government adopted an early-planning method.　

"Difficult to return”: As the public bicycle project became widely recognized, the riding time became concentrated on the peak time in the morning and evening. To solve this problem, the compagny has assigned people to the manual service in more than 100 service outlets to help customers rent and return bicycles. At the same time, they have applied information technology to establish a real-time dynamic scheduling management mechanism to strengthen the vehicle scheduling, and a mobile phone APP was developed to guide people to return bicycles to the nearest place.　　

"Difficult to react": Of the 3000 plus outlets only some 100 have been staffed with people on duty, so people who have problems in the process of bicycle rental cannot get direct and quick responses. To improve it the company has opened an official website, upgraded the hotline platform and opened SMS and Wechat platform to strengthen the communication with citizens and improve their reaction.　　

"Difficult to repair": Along with the increasing dependence on public bicycle, as well as the rising frequency of use that causes continuous damage of these bicycles, "difficult to repair" has become a major problem in operation. To find solutions to this problem, the company appoints maintenance staff at the service outlets to repair and maintain bicycles.

"Difficult to manage": Most public bicycle projects in other cities are supported by the long-term fiscal subsidies from the government. The system in Hangzhou has adopted a model of "government calls and companies manage". The government made the initial investment and the company now funds itself through diverse marketing initiatives. 

This system is recognized as the “Hangzhou Model” by peers and media and has a broad influence. More than 100 cities in China successively invited Hangzhou Public Bicycle Company to assist them in local construction of public bicycle system; Hangzhou Public Bicycle Company has assisted 76 cities of 21 provinces (autonomous regions, municipalities) in China such as Heilongjiang, Shanxi, Guizhou and Gansu to complete the construction and operation of public bicycle system so far. In 2014, Hangzhou Public Bicycle Company also exported their service to Huangdao District of Qingdao, Pukou District of Nanjing and Dandong.

The program is promoted in Chinese cities on the basis of local conditions. The public bicycle system of Taiyuan City, Shanxi Province,  as an example, its construction, service concept and technical support are all from “Hangzhou Model”. On the basis of Hangzhou Public Bicycle System, Taiyuan Public Bicycle System enjoys the highest daily rent of more than 500,000 bicycles, far higher than Hangzhou’s. The system and hardware, including the performance of the bicycles provided by Taiyuan Public Bicycle System, are better than Hangzhou, which also fosters exchanges on public bicycle system between Hangzhou and Taiyuan for joint progress.

Hangzhou,China: Urban Public Bicycle Sharing Program, Guangzhou Award for Urban Innovation

- http://www.guangzhouaward.org/815/content_2191.html (accessed 18 January 2016)

- Public Bike Sharing, Urban Innovation Database

http://www.urban-innovations.org/index.php/Public_Bike_Sharing (accessed 18 January 2016)