The programme was launched to coincide with World Car Free Day on Monday and is part of the city's preparations to host the 2010 World Expo, whose theme is "Better City, Better Life", Shanghai Metro said.
The limited trial began at a metro station near a high-tech research centre in the Pudong area to encourage people to bike between the station and their offices, Shanghai Metro said.
If successful, the programme will be expanded to 800 stands outside metro station exits and on 2,700 other sites in business and residential areas by 2012, the Shanghai Morning Post reported.
To use the system, riders must pay a 200 yuan (29 dollars) deposit and are charged one to three yuan an hour on a progressive system designed to encourage short rents and quick turnover. The first half hour is free.
The bicycles are being supplied by the Shanghai Forever Bicycle Company, one of Shanghai's oldest bicycle brands.
Shanghai-made Forever, Phoenix and Flying Pigeon brand bicycles used to dominate the city's roads, but as China has become more affluent cars have taken over.
The city recently banned bicycles from travelling on select major roads to prevent them from slowing down motorists.
The Shanghai programme uses technology similar to Paris' successful "Velib" scheme, which was launched last year and has since been emulated by other cities.