5 Chinese bike-sharing startups bankrupted in 2017

The sharing economy was a popular topic of discussion in China last year, and bike-sharing might have been the most talked about of any of the sharing industries. Along with high-speed trains, mobile payments, and online shopping, the dockless shared bikes are viewed as one of the four great new Chinese innovations.

From explosive growth at the beginning of the year, to a series of bankruptcies by year’s end, 2017 witnessed the roller coaster of China’s bike-sharing business During the ups and downs, the industry boasted almost 60 bike-related startups over the last 18 months, no more than ten of which will survive this year, one expert predicted.

By the end of November, at least six well-known bike-sharing startups had shut down, and more than RMB 1 billion (USD 150 million) in deposits could not be refunded to users.

Kuqi bikes. Photo from ifeng.com

Kuqi Bike

Kuqi Bike was established in Beijing in November 2016. It provided ten free rides to newly registered users and charged RMB 0.3 per 30 minutes thereafter. According to its Weibo account, the company had 16 million registered users, who had all paid deposits of RMB 298 to use Kuqi bikes.

During September of last year, some cities started removing Kuqi bikes after local authorities received complaints like Kuqi was having difficulties refunding users’ deposits. At this time, authorities could not reach many of Kuqi’s local operations offices. In late November 2017, Kuqi announced that the company’s operations and maintenance, but not its debts, had been taken over by Biker, a Chengdu-based rival. Local media reported that Kuqi Bikes had the most users, but could not refund RMB 700 million in user deposits.

Last month, the China Consumers Association demanded in an open letter that Kuqi clarify how it had used the deposits, refund money, and assume its legal responsibilities.

Bluegogo bikes. Photo from Baidu Images

Bluegogo

Bluegogo, which at one point claimed it was the third largest bike-sharing startup in China, was launched in Shenzhen in November 2016. The company once enjoyed an excellent reputation due to the outstanding user experience it provided in early 2017 when the market was booming. The company completed a RMB 400 million Series A funding round in January 2017 but failed to attract enough investment for a Series B two months later.

In November, local media reported that, except for a few technicians who continued to work, most employees had left the company. At the time, the company owed as much as RMB 200 million to more than 70 suppliers.

In an open letter, Li Gang, founder of Bluegogo, said that Biker would take over the company’s operations under a strategic cooperation agreement between the two companies.

Just when everybody thought Bluegogo was dead, however, Chinese media reported on January 2, 2018 that ride-hailing giant Didi Chuxing had agreed to buy out the failing company in a bid to build its own bike-sharing business. This should be good news for Bluegogo founders and the users who are currently unable to retrieve their deposits.

Wukong’s red bike. Photo from sohu.com

Wukong

Wukong Bicycles was a Chongqing-based startup that was shut down in June 2017, just half a year after its founding. The company lost 90% of its bikes within the half year of operation, as they had either gone missing or were stolen. When the company planned to upgrade its bikes with GPS devices, it ran out of money and announced its shuttering as a “strategic company restructuring.” Wukong founder Lei Houyi argued that launching shared bikes in such a hilly city would make headlines. After distributing more than 1,200 bikes in Chongqing, the company was the first casualty in China’s shared bike boom.

Users are trying to unlock a Mingbike. Photo from Baidu Images

Mingbike

Guangzhou-based Mingbike was founded in 2016 and quickly raised RMB 100 million from various venture capital firms. In July 2017, users of Mingbikes complained that they could not get their deposits refunded on time, which led to a boom in requests for deposit refunds.

In November, Mingbike reported that it had laid off 99% of its staff. The CEO resigned, and the company’s new bosses could not be contacted. In December, the Guangdong Consumer Council, a provincial consumer watchdog, filed a suit against Mingbike after it received 30,000 complaints from users who were unable to reclaim their USD 30 deposit after the company shut down.

3Vbike

3Vbike was a Beijing-based startup that focused on the third-tier market in China. The bikes were distributed to cities in Hebei province, such as Baoding, Langfang, Qinhuangdao, and in Putian, Fujian province.
The company was established in February and shut down in June, and it was only in operation for four months. According to 3Vbike’s WeChat account, the main reason for the company’s closure was the theft of large numbers of bikes.

(Top photo from sina.com)

Y.R. Zhao
Y.R. Zhao

Zhao is our columnist. She previously worked at China Daily, and she was the chief Southeast Asia correspondent while living in Bangkok. She holds two master’s degrees from the University of Sydney and Australian National University. She is a foodie and avid marathoner. She believes technology will change our lives and that China is leading the trend.

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