Xiaoming Bike rides into trouble

Another bike-sharing company is facing deposit refund issue.

Another bike-sharing company is exiting the market as the second case to close down this month, showing the risk in deposit management.

Xiaoming Bike has laid off 99 percent of its employees, with the chief executive officer stepping down and the actual controller losing contact, according to a whistleblower from Xiaoming.

Information from the municipal bicycle industry association further proved that the Shanghai executive management team of Xiaoming Bike had been out of contact, exposing the risk of deposit refund.

Also, the registered company of Xiaoming Bike were shown to be dissolved on November 13th as a result of resolution for dissolution on the Industrial and commercial credit publicity system.

This company once negotiated three rounds of financing worth over a hundred million yuan within 30 days last year, and the deposits refund problems broke out at the end of July in 2017.

The bike-sharing market has been facing a huge shake up since the second half of the year, with several companies such as 3Vbike, Coolqi and Bluegogo all on the brink of exit.

"The deposits belong to the consumers instead of the bike-sharing companies by law and should be managed with isolation of risk," said Liu Chunyan, associate professor of law school in Tongji University. "The government and competent authorities should take some measures to prevent systemic financial risks."

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