China’s ride-sharing giant Didi Chuxing is expanding into the bubble-prone bike-sharing sector, the company said on last Tuesday.
Didi also confirmed that it will partly take over the running of failed bike-sharing company Bluegogo’s services, allowing Didi users to use Bluegogo’s bikes.
China’s Bluegogo, which collapsed last November, is not the first dockless bike-sharing service to fail. More than 50 years ago, Amsterdam’s Witte Fietsen - or White Bikes service - closed in a matter of days after people threw the free, unlocked, white bikes into canals and rivers, or stole them.
Consumers have forked out almost Rmb1bn ($150m) in deposits for shared bikes to groups that have since gone bust, according to a report from Ant Financial, the fintech affiliate of Alibaba, the tech company.
The figure may underestimate consumers’ exposure. The China Consumers Association, a state-run advocacy, issued a public letter in December demanding Kuqi return deposits of about $45 to each of its 16m registered users - if all users were unpaid that would add up to $720m.
The association said it had also received 210,000 complaints from users of the failed Kuqi, after the company listed a nonexistent address for users looking to reclaim their deposits.
After acquiring Uber’s China arm in 2016, Didi has kept almost-total control of ride-hailing in China and is now expanding into other countries as well as other sectors. The company acquired ride-hailing app 99 last week, the major challenger to Uber in Brazil.
Didi announced it would soon launch a “comprehensive bike-sharing platform” within its app. The platform will integrate the services of Ofo - which Didi has a significant stake in - as well as Bluegogo, other potential partners, and “DiDi’s upcoming own-branded bike-sharing service,” the company revealed.