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oBike owes users $6.3m in deposits
1 of 2
oBike founding investor and chairman Shi Yi says the firm has turned to its shareholders to raise the money to refund users' deposits. However, the Shanghai-born 29-year-old noted this was still subject to the decision of liquidators, which the company is in the process of appointing.BT FILE PHOTO
PUBLISHED
5 HOURS AGO
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Founder of firm says he is turning to shareholders to raise money
Zhaki Abdullah
About US$4.6 million (S$6.3 million) in deposits is owed to users by troubled shared-bicycle firm oBike, the company's founding investor and chairman Shi Yi told The Straits Times yesterday.
Mr Shi said oBike intends to refund users in Singapore their deposits, and has turned to its shareholders to raise the money.
However, the Shanghai-born 29-year-old noted this was still subject to the decision of liquidators, which the company is in the process of appointing.
oBike, which began rolling out its shared two-wheelers in Singapore in January last year, ended operations here suddenly on June 25.
It said then that requirements under the licensing regime for shared-bicycle companies by the Land Transport Authority (LTA) were too onerous.
The sudden closure left users wondering if they would get a refund of the deposit - of up to $49 - they had to make to use its bikes.
Apologising to users, Mr Shi said the decision to close shop was a commercial one as the firm had suffered substantial losses here in its first year of operations.
This was largely due to expenses incurred when setting up its business here, such as the purchase and maintenance of its bicycles and the hiring of staff, he explained.
oBike had expected to be able to turn around its business here this year. That was until the authorities announced in March a new licensing regime for bike-sharing firms here. This would require, among other things, that firms pay a fee of $60 per bike deployed.
Mr Shi added that under LTA's new regulations, oBike would incur expenses of between $10 million and $15 million annually.
"The economics of it didn't make sense any more," he said.
He added: "In March, we already knew we needed a solution, and we were proactively looking for buyers to take over the business."
However, plans to sell the business ultimately fell through.
Mr Shi admitted that oBike was not nearly as flush with cash as some of its competitors.
In August last year, oBike raised US$45 million in funding from investors such as regional ride-hailing giant Grab. However, this was far short of the US$2.7 billion spent by Chinese food delivery giant Meituan Dianping when it bought over Mobike this April, as well as the US$866 million ofo raised in March from investors like Alibaba.
Despite having pulled out of other cities such as Melbourne in Australia, oBike intends to continue its bike-sharing business elsewhere, said Mr Shi.
The company opted to exit Melbourne as it considered the A$3,000 (S$3,020) fine imposed by the local authorities for each abandoned bike too oppressive, he said.
Though earlier reports stated oBike had about 14,000 bicycles for rent here, Mr Shi clarified that the firm had rolled out more than 70,000 bicycles in Singapore.
As for their removal, Mr Shi admitted that the company would have problems meeting tomorrow's deadline set by LTA, but was working to complete the removal process by the week's end.
The company has a team of two people dealing with the LTA, as well as the Consumers Association of Singapore and the Personal Data Protection Commission on issues such as the refund of user deposits and protection of user data.
"No matter the outcome of liquidation, I want to take the responsibility of paying my share back to users," said Mr Shi, who holds a 23 per cent stake in oBike.
He added that he is trying to convince other shareholders to do the same.
SEE FORUM
A version of this article appeared in the print edition of The Straits Times on July 03, 2018, with the headline 'oBike owes users $6.3m in deposits'. Print Edition | Subscribe
1 of 2
oBike founding investor and chairman Shi Yi says the firm has turned to its shareholders to raise the money to refund users' deposits. However, the Shanghai-born 29-year-old noted this was still subject to the decision of liquidators, which the company is in the process of appointing.BT FILE PHOTO
PUBLISHED
5 HOURS AGO
FACEBOOKTWITTEREMAIL
Founder of firm says he is turning to shareholders to raise money
Zhaki Abdullah
About US$4.6 million (S$6.3 million) in deposits is owed to users by troubled shared-bicycle firm oBike, the company's founding investor and chairman Shi Yi told The Straits Times yesterday.
Mr Shi said oBike intends to refund users in Singapore their deposits, and has turned to its shareholders to raise the money.
However, the Shanghai-born 29-year-old noted this was still subject to the decision of liquidators, which the company is in the process of appointing.
oBike, which began rolling out its shared two-wheelers in Singapore in January last year, ended operations here suddenly on June 25.
It said then that requirements under the licensing regime for shared-bicycle companies by the Land Transport Authority (LTA) were too onerous.
The sudden closure left users wondering if they would get a refund of the deposit - of up to $49 - they had to make to use its bikes.
Apologising to users, Mr Shi said the decision to close shop was a commercial one as the firm had suffered substantial losses here in its first year of operations.
TAKING RESPONSIBILITY
No matter the outcome of liquidation, I want to take the responsibility of paying my share back to users.
MR SHI YI, oBike founding investor and chairman.
The Business Times reported last week that oBike suffered some $4.25 million in losses last year.No matter the outcome of liquidation, I want to take the responsibility of paying my share back to users.
MR SHI YI, oBike founding investor and chairman.
This was largely due to expenses incurred when setting up its business here, such as the purchase and maintenance of its bicycles and the hiring of staff, he explained.
oBike had expected to be able to turn around its business here this year. That was until the authorities announced in March a new licensing regime for bike-sharing firms here. This would require, among other things, that firms pay a fee of $60 per bike deployed.
Mr Shi added that under LTA's new regulations, oBike would incur expenses of between $10 million and $15 million annually.
"The economics of it didn't make sense any more," he said.
He added: "In March, we already knew we needed a solution, and we were proactively looking for buyers to take over the business."
However, plans to sell the business ultimately fell through.
Mr Shi admitted that oBike was not nearly as flush with cash as some of its competitors.
In August last year, oBike raised US$45 million in funding from investors such as regional ride-hailing giant Grab. However, this was far short of the US$2.7 billion spent by Chinese food delivery giant Meituan Dianping when it bought over Mobike this April, as well as the US$866 million ofo raised in March from investors like Alibaba.
Despite having pulled out of other cities such as Melbourne in Australia, oBike intends to continue its bike-sharing business elsewhere, said Mr Shi.
The company opted to exit Melbourne as it considered the A$3,000 (S$3,020) fine imposed by the local authorities for each abandoned bike too oppressive, he said.
Though earlier reports stated oBike had about 14,000 bicycles for rent here, Mr Shi clarified that the firm had rolled out more than 70,000 bicycles in Singapore.
As for their removal, Mr Shi admitted that the company would have problems meeting tomorrow's deadline set by LTA, but was working to complete the removal process by the week's end.
The company has a team of two people dealing with the LTA, as well as the Consumers Association of Singapore and the Personal Data Protection Commission on issues such as the refund of user deposits and protection of user data.
"No matter the outcome of liquidation, I want to take the responsibility of paying my share back to users," said Mr Shi, who holds a 23 per cent stake in oBike.
He added that he is trying to convince other shareholders to do the same.
SEE FORUM
A version of this article appeared in the print edition of The Straits Times on July 03, 2018, with the headline 'oBike owes users $6.3m in deposits'. Print Edition | Subscribe
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