NewLeEco’s Yidao Yongche car-hailing firm denies cash woes
Reports say the LeEco-based premium vehicle firm had failed to pay suppliers, and drivers are turning their backs on the company.
Yidao Yongche, the premium Chinese ride-sharing company controlled by LeEco, has denied any financial troubles, after media reports suggested it has failed to make payments to several of its service suppliers, and its drivers.
The company insisted in a series of replies to local media that it is operating normally, and its cash flow is sound, although the company has admitted to some payment problems being caused by technical glitches.
Financing activities are smooth, and the company plans to initiate an initial public offering plan recently, Yidao said.
The Chinese company, which claims to have 40 million registered users and six million registered drivers, has failed to make payments to as many as seven suppliers, and a number of drivers have also flocked to Yidao’s headquarters in Beijing in search of payment, according to reports.
Platforms like Didi have gradually lowered their subsidies to consumers but increased expenditure on services. That kind of move can filter out those customers simply looking for cheap rides, but retain those highly active and loyal ones
In 2015, LeEco invested US$700 million for a 70 per cent stake in Yidao. But the car-hailing service provider, which has raised more than US$860 million in four rounds of funding since launching in 2010, has been finding it hard to raise more working capital, according to a Bloomberg report last year.