MANY of China’s shared bike users may have lost their deposits after two operators went bust.
Coolqi, known for its green bikes, and Bluegogo, with its iconic blue machines, have both angered their users over problems in getting deposits refunded.
The firms appear on the latest list of bankrupt bike-sharing firms issued by the China E-Commerce Research Center.
Coolqi, with 1.4 million bikes, and Bluegogo, with 830,000, both closed down this month due to financing problems.
Li Wensheng, father of Bluegogo founder Li Gang, met bike suppliers and investors yesterday to discuss the Beijing-based company’s financial difficulties.
Bluegogo employees claimed on social media that the company might not even be able to pay their salaries.
Debtors have been queueing in front of Coolqi’s headquarters in the capital’s Tongzhou District, asking for their deposits back.
The company said last Sunday that it had entrusted a company in Chengdu, capital of southwest China’s Sichuan Province, to deal with refunds.
Reporters tried to call the company’s three service hotlines, but all the lines appeared to be busy.
Gao Weiwei, former CEO of Coolqi, said the 650 yuan (US$98) cost of a bike was enough to cover the deposit of 298 yuan. “In the worst scenario, we will allow users to ride our bikes home,” he said.
China’s bike sharing market is expected to take in 10.3 billion yuan in revenue this year, a 736 percent increase from the 1.2 billion yuan in 2016, according to an iiMedia Research report.
It estimated that the number of shared-bike users in China will hit 209 million this year, compared to last year’s 28 million.
A report issued by the China Internet Network Information Center in August estimated that users may have paid up to 10 billion yuan in deposits for using shared bikes.
Bluegogo, for example, requires a deposit of 200 yuan for using its mobile app to scan a QR code and unlock a bike.
Zhao Zhanling, a lawyer with the Beijing Zhilin law firm, told reporters that bike sharing firms entrust banks to deal with user deposits.
However, as the number of users and deposit amounts can vary from day to day, it is difficult to have an accurate number.
According to the China E-Commerce Complaints and Rights Protection Service website, a third-party e-commerce dispute mediation platform, complaints concerning shared bikes have topped the list of e-commerce disputes. Bluegogo and Coolqi account for 20 percent of complaints, while market leader Mobike takes 60 percent of grievances, mainly involving the difficulty in getting deposits back and bad customer service.
Chen Liteng, an analyst with the e-commerce research center, said the bike sharing sector had been developing extremely fast.
“Although governments at various levels have created guidelines to regulate the market, there are no clear requirements concerning details such as how to manage and use the deposit funds,” he said
Cao Lei, the center’s director, said bike sharing operators had used their businesses as a way to raise funds.
Cao said a number of Chinese cities, including Shanghai and Beijing, have limited any increase in the number of shared bikes, and this have impaired bike sharing companies’ appeal in capital markets.
He advised regulators to set rules on an unified process and a time limit for users to get refunds refunded from bike sharing operators, and require firms to keep independent bank accounts to ensure they can afford to refund bike users.