Shanghai has launched draft guidance for bike-sharing service providers to better regulate the rapidly expanding sector, which will have a "significant impact" on users' safety and service providers' profits, according to a circular issued by the Shanghai Municipal Bureau of Quality and Technical Supervision on Monday.

The bureau said in the circular that the finalized version will be rolled out after authorities receive public opinion. The guidance is the first of its kind nationwide that regulates bike-sharing service providers.

It states that each rental bike must have a GPS function that updates its location, and that users must be aged between 12 and 70, and between 145 and 195 centimeters in height. Users above 70 years of age must provide proof to service providers to show that they are in good health before using rental bikes, according to the guidance.

It states that rental bikes that have been in service for three consecutive years must be discarded as unserviceable and may not come back into service.

The guidance also states that service providers must return the balance of deposits to users upon request within seven days.

Bike-sharing has grown increasingly popular among Shanghai residents, particularly young users who see it as a flexible, affordable and environmentally friendly mode of transport.

It is estimated that more than 280,000 rental bikes are in service in Shanghai, with the number expected to reach 500,000 by June, according to Guo Jianrong, secretary-general of the Shanghai Bicycle Association.

Guo said the guidance aims to improve the quality of bike-sharing services and ensure the safety of users of both bicycles and electric bikes.

"I think it will be a positive move if service providers follow the guidance, particularly on the deposit return policies. I also think it is important to have guidance for users, especially for the parking of rental bikes, which would enhance efficiency and prevent people from needing to take so long to locate a bike," said Zhang Xueqian, a 20-year-old college student in Shanghai.

However, for bike-sharing service providers, the guidance could mean increased costs for recalling bicycles that do not meet requirements such as being equipped with a GPS function.

Liu Xiaoyue, a consultant at Shanghai-based Shenyue Law Office, said the draft guidance is self-regulation and not yet the law.

According to Ofo, a bike-sharing service provider, the company is in close collaboration with authorities, providing market feedback for policymakers.

Mobike, another service provider, had not commented on the draft guidance by Tuesday afternoon.