A vicious cycle? Major Chinese Bike-sharing company takes a turn for the worst
After China’s bike-sharing initiative made international headlines with its astonishing bicycle graveyards (see Urban Art section), the topic is back in the spotlight due to collapse of Ofo. Until recently, the firm appeared to be one of the strongest contenders in the Chinese bike-sharing market. Established in 2014 as a project by Peking University, the dockless Ofo bikes sprang to popularity due to their user-friendly nature which allowed customers to causally pick up and drop off the bicycles anywhere by simply scanning a QR code. By 2017, the start-up amassed a valuation 2 billion USD (1.76 billion EUR), its luminous yellow vehicles becoming a common spectacle in Chinese cities. In February 2018, The Guardian announced Ofo “will be to cycling what Uber is to taxis” However, barely within the space of a year, the tech company appears close to financial ruin as it is barely able to pay suppliers nor refund 1 billion CNY (128 million) worth of customer deposits. Hence, displeased Ofo users have even protested outside the company’s offices as “the digital queue for withdrawing one’s deposit reached as long as 13 million users”.
Ofo’s downfall may be attributed to the business trying to grow faster than it was ready too – the company has already expanded to 20 countries. The situation also reflects on the inundated nature of China’s bike-sharing phenomenon, which has already seen the demise of Kuqi Bikes, Bluegogo, Dingding Bikes, 3Vbikes, and Wukong Bikes by late 2017. Indeed, an indication of this oversaturation are shared bikes swamping pavements in Chinese cities signalling “where infrastructure and regulations were not prepared to handle a sudden flood of millions of shared bicycles”.
