Ofo outsources bikes maintenance in smaller cities

The measure will presumably cut costs for the cash-strapped company.

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Ofo outsources bikes maintenance in smaller cities

Chinese bike sharing company Ofo has been shifting to third-party agents to maintain and repair its bicycles in a move to cut costs and revitalize its business, online news portal Sina reported on Tuesday.

Ofo’s domestic operations general manager Zhou Weiguo told Sina that the company has implemented this policy in two cities—Tai’an and Weihai, both in eastern China’s Shandong Province—and will be adopted in all third and fourth-tier cities where Ofo has a presence. The company’s website shows that it is currently recruiting bicycle repair contractors.

Ofo is short on cash. Previously, the company added an e-commerce element to its app to encourage users to convert their deposits into consumer goods. The company has also sued its former employees for corruption in hopes of reclaiming funds close to RMB 10 million (US$1.5 million).

In a letter sent out to its employees in December, Ofo founder Dai Wei admitted the company was under “immense cash flow pressure.” He wrote, “We have to return users’ deposits, pay back our suppliers, and keep the company running. We have to turn every yuan into three”.

At its peak, Ofo handled 32 million orders a day. Dai’s letter indicated that this number has dropped to a daily load of “a few million.”