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Bluegogo, one of China's largest bike sharing startups has become the latest casualty in the country's oversaturated shared bike market. Following a period of rapid expansion fuelled by venture capital funds, Bluegogo is going bust with an announcement of the company's dissolution. As it's entangled in some 30 million U.S. dollars in debt. Bluegogo's office in Beijing is now empty and those calling the customer services hotline are not getting any answers.
Bluegogo CEO Li Gang has written an open letter, saying as CEO I've made mistakes. I was filled with arrogance. Because shared bikes are an Internet Plus idea. It's a new idea. Our government has not found a similar strategy when the shared bike concept first started and was put on the market. So it creates systemic risk.
Over the past year, more than 11 startups kicked off fund racing and wheeled out shared bikes. After launching in January, Bluegogo rolled out 600,000 bicycles in a mere six months winning over 20 million riders. But months later the company was reported to have burned through 19 million dollars since its founding last November. The customers' top concern the return of their $15 deposit or $30 deposit for a half-year card. About refunding the deposit for shared bikes, it depends on the promise the company first made to customers. If they promise to return the deposit they have to obey that. If they promise to return it with certain conditions that should be followed.
China streets are packed with shared bikes, an oversaturated market which could lead the bike sharing craze to cool down slightly. In the hugely competitive market, at least three other bike sharing companies have gone bust in recent months. Bluegogo says it will pay employees salaries until February 2018 but for riders they may not find Bluegogo bikes on the streets anymore. And a refund on deposit, only time will tell.
