Lifestyle

ofo, Not Again? Bike-Sharing Firm Mysteriously Vacates S'pore Office, Said To Owe Vendors Over $700k

While 2017 could be seen as the ‘golden year’ of bike-sharing in Singapore, 2018 was pretty much the opposite.

In its heyday, there were 8 bike-sharing firms in Singapore – Chinese firms Mobike, ofo, and Baicycle, and local firms oBike, SG Bike, GBikes, ShareBikeSG, and Anywheel.

However, as quickly as the firms rolled out their fleets, so did the instances of indiscriminate parking and vandalism of bikes.

An example of indiscriminate parking by bike-sharing users in Singapore

The abuse of bikes was so rampant that firms needed to use both ‘carrot’ (credit systems that awarded good practices) and ‘stick’ (mandatory deposits, credit systems that deducted points, penalties like probation periods and increased rates) approaches to curb it.

Unfortunately, the efforts of the bike-sharing firms weren’t enough, and they still ended up paying fines to the Land Transport Authority (LTA).

Those who could not remove indiscriminately parked bikes in time also had those bikes impounded.

In March 2018, a new bill was passed, which required bike-sharing companies to stop indiscriminate parking and suspend users for repeated offences.

Firms would also need to have their fleet sizes reviewed every half year, and any failure to comply can cost firms up to S$100,000 in fines, reduction in fleet size, suspension or revocation of their licenses.

June 2018 marked the start of the exodus, with GBikes being the first to leave the market.

oBike followed suit, abruptly announcing its closure in Singapore on 25 June “with immediate effect”.

They cited difficulties in meeting the authorities’ new regulations as their reason for exiting.

obike abandoned
Image Credit: oBike

However, oBike’s exit was plagued with issues – users couldn’t get refunds on their deposits, and their bikes were still strewn around the island after the LTA-imposed deadline.

In September, reports also stated that the police were investigating oBike for misappropriation of funds after it was found to have transferred S$10 million to its Hong Kong office last month.

There has been no updates about oBike since then.

The third firm to throw in the towel was ShareBikeSG, who shut down at the start of July. They too cited LTA’s new licensing regulations as a hurdle they couldn’t overcome.

Out of the remaining five bike-sharing operators, Anywheel, Mobike, ofo, and SG Bike submitted their applications to LTA to obtain their two-year license.

Mobike also removed its $49 deposit policy at the end of June, perhaps in response to oBike’s saga.

ofo, Not Again?

Last week, another worrying update emerged.

This time, it was involving Alibaba Group-backed ofo.

Dai Wei (Founder Of ofo) And Hu Weiwei (Founder Of Mobike) at the World Economic Forum

In a letter to employees, its CEO revealed that the firm was battling “immense” cash-flow problems.

“The whole of this year we’ve borne immense cash-flow pressures. Returning deposits to users, paying debts to suppliers and keeping operations running,” said CEO Mr Dai Wei in the letter dated 19 Dec.

According to reports, close to 12 million customers in China are demanding refunds of their deposits, and Mr Dai was put on a Chinese government blacklist for defaulting on debts.

In Singapore, TODAY reported that “at least two companies have sent letters of demand to […] claw back money owed for logistic services”.

One of these companies is logistics firm SB Express, which provided lorries to ofo from May to November this year to transport bikes.

Its managing director told TODAY that they have been “chasing ofo for payment but to no avail”. ofo owes them S$500,000 to S$600,000 in unpaid invoices.

Their lawyers have sent a letter of demand to the bike-sharing firm.

Another logistics company, which declined to be named, also shared that they had run into issues trying to get back payment for the S$174,000 owed to them.

A third company, involved in the recruitment of 200 bike marshals for ofo’s operations team, is also reported to be demanding payment.

The total of the unpaid sums stands at over S$700,000.

ofo Singapore Office Vacated Before Lease Ended, Employees’ Claims Not Paid

ofo Singapore’s office was also found vacated when TODAY visited their registered office address at AXA Tower along Shenton Way.

An employee of co-working space JustCo told reporters that “ofo had moved out at the end of November, a month before its lease was up”.

JustCo could not provide details on why ofo moved out.

Former and current ofo Singapore employees have told TODAY that the company still owes them “thousands of dollars in claims for transport, mobile phone, warehouse tools and team-building meals, among others”.

They also revealed that staff strength had shrunk from “more than 100 a year ago to about 15”.

A former employee said that ofo owes him S$5,000 in claims, and another employee’s claims of S$1,500 has not been reimbursed for more than six months now.

CPF payments to employees have also been late “on at least three occasions over the past year”, according to another staff member.

According to current employees, monthly salaries have been paid, but “the company could not promise that they would be paid this month when questions were posed to management”, telling them to “just wait and see”.

ofo Users Not Getting Any Answers

A quick check on ofo Singapore’s Facebook page shows that the last time their team responded to user comments was 6 weeks ago.

The page is currently plagued by comments by disgruntled users who are demanding response from the team.

Screenshot of a user’s comment
Screenshot of a user’s comment
Screenshot of a user’s comment
Screenshot of a user’s comment

While ofo doesn’t have a deposit policy, their passes are on an auto-renewal basis, so users who are looking to bail the sinking ship should cancel their subscriptions ASAP.

However, it might still be a good idea to keep an eye on your bank statements even after hitting the cancel button:

Screenshot of a user’s comment
Screenshot of a user’s comment

Or better still, take the advice of this user:

Screenshot of a user’s comment

 

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