Dockless bike-sharing start-up set to brave Sao Paulo streets

SAO PAULO (Reuters) - Dockless bike-sharing, a form of transportation where rented bikes can be left anywhere on the street, is coming to Brazil's traffic-clogged financial capital Sao Paulo.

A start-up called Yellow, owned by the founders of 99, a popular Brazilian ride-hailing service sold to China's Didi Chuxing for an estimated $1 billion earlier this year, launched on Thursday in Sao Paulo.

The idea of dockless biking first took off in China, where dozens of companies rushed into the market, some seeing their valuations grow exponentially.

A handful of venture capital firms made an initial investment of 50 million reais ($13 million) in the Sao Paulo venture, which hopes to gradually expand to other Brazilian cities, Yellow's founders said at a news conference.

They said they have put 500 Brazilian-made bikes on the streets of Sao Paulo, one of the world's largest cities that is notorious for its traffic jams. They said they expect to have 20,000 by November and 100,000 by next year.

Brazil's Tembici already operates a bike-sharing service in Sao Paulo, albeit one that uses stations to dock the bikes. It has 260 bike stations throughout the city and a total of 5,700 bikes. By way of comparison, New York City's Citi Bike has about 12,000 bikes.

Yellow said that its target customer would use bikes to complement traditional public transportation, not replace it.

"We are expecting that the majority of rides will last less than 15 minutes," founder Eduardo Musa said.

The wave of dockless bike-sharing, which has expanded to cities throughout North America and Europe, has also triggered some regulatory problems with local governments.

In certain places, such as Washington, the bikes have triggered a backlash for cluttering the streets. Thefts were widespread when Chinese dockless bike firm Mobike expanded to Mexico City earlier this year.

($1 = 3.7499 reais)

(Reporting by Tais Haupt, Writing by Marcelo Rochabrun, Editing by Rosalba O'Brien)