Bike-sharing services

Hong Kong’s first bike-sharing brand Gobee to close down just over a year after launching

PUBLISHED : Tuesday, 10 July, 2018, 12:12pm
UPDATED : Wednesday, 11 July, 2018, 10:14am, Hong Kong’s first bike-sharing service provider, said on Tuesday it will close its business in the city due to “enormous maintenance” costs that contributed to losses since it launched in April last year.

The start-up has halted user registration and account top-ups, and bikes will no longer be available starting July 17.

Users can apply for a deposit refund over the next 30 days, according to a statement posted on its official Facebook account.

“The enormous maintenance cost has made it difficult to sustain operation,” chief executive Raphael Cohen said in the statement, adding that despite efforts made over the past year or so, the company was “still unable” to record any profit.

“The decision is not an easy one to make and we feel deeply sorry for the withdrawal of services,” Cohen said.

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Gobee, Hong Kong’s first bike-sharing service, was launched in April 2017 with some 400 smart bikes in the western New Territories, with users able to unlock them by scanning a QR code with their mobile phones. Unlike existing bike rental services in Hong Kong, users did not have to pick up and drop off the bicycles at designated locations.

The start-up’s investors included Grishin Robotics and the Alibaba Hong Kong Entrepreneurs Fund, a non-profit initiative by Alibaba Group, the parent company of the South China Morning Post.

In February, Gobee retreated from Europe after reporting as many as 1,000 bikes had been stolen and nearly 3,400 damaged during its four months of operation in France. In its home city, the company’s bright green bicycles have also been subject to damage and found submerged in rivers.

The closure of Gobee comes after Beijing-based Ofo launched a takeover attempt in April, people familiar with the situation previously said. At the time, Ofo declined to comment on the deal.

Calls to Gobee’s office on Tuesday went unanswered. Ofo also declined to comment on Tuesday.

Ofo has faced its own challenges recently, with the company withdrawing from Israel amid a “business restructure”.

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“Our focus now is on priority markets and moving towards profitability,” an Ofo spokesman said Tuesday in response to an inquiry. “We are communicating with our local markets about plans moving forward.”

In its home market last week, Ofo’s rival Mobike, owned by Meituan-Dianping, scrapped the requirement for user deposits in a move seen as a preemptive strike against its rivals.

China’s bike sharing industry has dwindled from a peak of about 100 players to just a handful after just over two years of intense competition and heavy operational costs. Besides rental income, companies saw the bike-sharing business as providing access to mobile payment systems, the sale of third-party advertisements and collection of data for analysis of consumer patterns.

The sector is also expected to slow this year after a period of booming growth. The number of bike-sharing users in the country is forecast to grow 14.6 per cent in 2018, a steep drop from the more than 600 per cent seen in 2017, according to iiMedia, a China-based market research firm.