One after the other, bike-sharing firms in Singapore have tough luck keeping afloat, and the whole service looks like it’s on a downward spiral with fewer users than before.
Of only three operators (Mobike, ofo and SG Bikes) that were awarded full licenses by the Land Transport Authority (LTA), ofo is currently swimming in hot soup. Right now, they’re almost as good as gone.
Despite the confidence it had drawn, getting backed by Chinese conglomerate Alibaba Group, ofo ended up with about $700,000 in debt towards vendors.
The firm’s CEO also revealed in December that they were experiencing “immense” cash-flow problems, before its Singapore office was found vacated, leaving employees without reimbursement for thousands of dollars worth in claims.
Then in January, ofo sacked its entire operations team in Singapore, giving employees sudden terminations without any explanation or compensation.
Suspension After Multiple Warnings
However, ofo will still have to answer to the authorities, even if they have been leaving employees, vendors and users in the dark.
LTA released a statement in January, saying ofo has “breached multiple regulatory requirements” despite being given “an ample preparation period”.
This came after the firm was previously fined in November, when it failed to right-size its fleet to 10,000 bicycles by the deadline of 1 November 2018.
Even after being penalised and given more time to comply, ofo still had more than the maximum allowed 10,000 bikes by January.
The company also had not started implementing the required QR-code system to ensure its bikes are parked in designated areas.
Once again, LTA gave ofo until 13 February 2019 to meet these requirements.
But upon failure to do so, LTA came down hard and suspended ofo’s operating license on 14 February, ordering the firm to remove all its bicycles from public places by 13 March.
LTA says ofo should be responsible for managing the removal of its bicycles, and that the authorities will refrain from stepping in “to manage taxpayer burden”, unless it becomes necessary to help with the removal, should ofo fail to take action.
If ofo fails to remove the bicycles by the deadline, it could mean a complete cancellation of their license—this is looking highly likely at the moment given the current state of the firm’s operations (or lack thereof).
Featured Image Credit: South China Morning Post