Ofo accrues debt and displeasure in Singapore

Can Ofo repay its debts?

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Ofo accrues debt and displeasure in Singapore

Ofo is in the headlines for all the wrong reasons again.

As 2018 came to an end, the Chinese bike-sharing startup silently vacated its Singapore office, according to a report by local outlet Today. The company still owes external vendors at least S$700,000, and thousands of dollars worth of transport and mobile phone expenses accumulated over a period of more than half a year by Ofo Singapore’s staff remain unpaid.

One logistics company, SB Express, confirmed to Today that Ofo owes it over half a million Singapore dollars for transporting the company’s yellow bikes across the city-state between May and November. Another logistics firm is threatening to sue the Chinese startup. A third company that helped Ofo Singapore hire 200 bicycle marshals is also demanding payment.

Those bike marshals and dozens of Ofo Singapore’s staff were terminated in November “out of the blue”, according to Channel NewsAsia.

Ofo has already retreated from many countries. In August last year, the company shuttered operations in Germany, Australia, Israel, and India, to name a few. As the bike giant bowed out of these markets, Ofo’s then head of communications told KrASIA in an interview last year that the company’s goal was to focus on its key overseas markets—Singapore, Japan, and South Korea—due to their dense populations and well-integrated public transport networks. It was a bid to be profitable by the end of 2018. Two months later, Ofo left Japan too.

With news of Ofo’s financial woes spreading in China, Chinese Ofo users have been seeking refunds. The same is happening in Singapore.

On top of a cash crunch, Ofo Singapore has been facing a cascade of complaints from local users. The Consumers Association of Singapore, a nongovernmental consumer watchdog organization, has said that the company must ensure that it has enough bicycles for users in the city-state.

At home, the company’s founder and CEO Dai Wei has been blacklisted by the Chinese government for not meeting his debt obligations. He is restricted from purchasing high-end goods and certain types of tickets for railway and airline travel.

Editor: Brady Ng