oBike goes into liquidation amid mounting complaints

SINGAPORE — The beleaguered bicycle-sharing operator oBike — which exited Singapore abruptly on Monday — has gone into liquidation here, as complaints from irate users pile up.

When contacted by TODAY, co-founder Edward Chen, who is based in Shanghai, said he has left matters to the "local team and also the legal team and the liquidation agent".

Thousands of users were left in the dust after oBike pulled out suddenly from the Singapore market on Monday, saying it was tough to meet new rules under a licensing regime to tackle indiscriminate parking.

Many commuters are scrambling to recover the mandatory deposits — up to S$49 — that they placed with oBike. The company had a fleet of about 14,000 bicycles and claimed it had more than one million users here.

When pressed on whether the company would offer refunds on the deposits, Mr Chen said there was an "existing plan for the whole (liquidation) process". He declined to elaborate, repeatedly referring TODAY to its Singapore-based team and lawyers.

If oBike is in liquidation, Mr Daniel Tay, a lawyer and partner at law firm Chan Neo LLP, said that filing a proof of debt so that the liquidator can decide on payouts from realising the value of the firm's available assets — such as money in bank accounts — may be the only option for affected customers. This could take more than a year, he said.

Calling it a "very special and sensitive" period, Mr Chen said it was not his personal decision to withdraw from the Singapore market.

"This is a company decision and from the board of directors… I'm not the chairman. I just do the execution," he said. "I saw a lot of comments criticising (us) on social media, (but) I cannot respond because it's a company decision."

Former employees who spoke to TODAY on condition of anonymity said that while the company had done well in the initial stages after its launch here last January, it did not foresee the magnitude of indiscriminate parking and vandalism by users, and the extent of the regulatory changes to curb the problem.

"They did not see it coming… It started changing the nature of the business and getting more difficult," said an ex-employee who left the firm earlier this year.

The company began to bear the brunt of fines imposed by the Land Transport Authority (LTA) for failing to pick up indiscriminately parked bicycles in time. This placed a strain on the company's finances.

Gripes from employees about letters notifying the firm of fines also became an "everyday occurrence", the former employee said. "I did hear complaints, like 'another LTA letter'… It started bringing down the morale of the staff members. We just could not find a way to quickly pick up the bikes and clear them."

In February this year, Senior Minister of State (Transport) Lam Pin Min said the LTA had collected about S$180,000 in fines and administrative fees, and issued more than 2,100 removal notices, since enforcement action began against bicycle-sharing operators in May last year. The authority also impounded more than 340 rental bicycles, Dr Lam had told Parliament.

This was before new laws were passed in March, requiring operators offering dockless shared bikes, personal mobility devices and power-assisted bicycles to be regulated under a new licensing regime. Applications for the licence opened last month for bicycle-sharing operators, and will close on July 7.

Under the regime, operators will have to take steps to ensure that users practise responsible parking, including requiring commuters to scan a unique QR (quick-response) code at the parking spot as proof of proper parking before they can end their trip.

COMPLAINTS SURGE

On Tuesday, complaints lodged against oBike with the Consumers Association of Singapore (Case) had spiked almost tenfold. On Monday evening, Case had told TODAY that it received 27 complaints against the bike-sharing firm since the start of this year.

A day later, the consumer watchdog said this number had risen to 259, most of which were lodged in the past two days. "Consumers mostly complained that they did not receive a refund of their deposit despite requesting (this) several months prior," Case said, adding that it will follow up with oBike on the matter.

Speaking to TODAY, Case president Lim Biow Chuan said the association has written to oBike, but he understands that the operator is not replying to any queries.

On the deposits, he said: "These are not small sums if you add up the number of users. It comes up to quite a bit."

Mr Lim, who is also Member of Parliament for Mountbatten, added: "At the end of the day, we respect that sometimes businesses don't work the way we want it to be, but there must be a responsible way to handle business cessation."

RESIGNATIONS, FINANCIAL TROUBLES 

For the financial year ended December 31, 2017, oBike had raked in nearly S$913,000 in revenue, but recorded S$4.25 million in losses, The Business Times had reported.

Another former oBike employee told TODAY he was “quite surprised” by the company’s withdrawal from Singapore. It had been performing well, such as in raising the take-up rate of shared bicycles among the commuting public.

Nevertheless, he noted that oBike’s Singapore-based employees did not have access to the company’s finances, which were managed from China by Mr Chen and fellow co-founder Shi Yi.

 “As the Singapore office, by right, we should have had visibility of some of the (finances), but then we didn’t have too much… Maybe (it was because) we were just working staff members,” he added. At least two managers overseeing oBike’s operations in Singapore had left the firm in the past year.

Mr Elgin Ee, its former general manager, departed the firm last year and his successor, Mr Tim Phang, left earlier this year. The Singapore office handled areas such as operations, marketing, business development and government relations.

When TODAY arrived at oBike’s Commonwealth Lane office at 9am on Tuesday, mechanical engineer Wen Zhong was waiting outside. The 50-year-old was there to try to recover his S$49 deposit and his daughter’s S$19 student deposit, but the office was empty.

Mr Zhong has been unsuccessful in his attempts to contact oBike since Monday. “I was nearby, so I thought to just try,” he said. “That the office is closed is a very bad sign.”

From morning till 5.30pm on Tuesday, there was nobody in the office.

TODAY’s checks earlier in the week showed that Singapore citizen Zhu Yimin was listed as oBike’s director here, and Chinese national Wu Lijuan was listed as its secretary.

When TODAY visited Ms Wu’s Gateway East address in Beach Road on Tuesday morning, it turned out to be the premises of secretarial firm CS Accounting & Tax Services. The company, which helped oBike incorporate its business here in November 2016, had learnt about the firm’s exit in the news. oBike had stopped using its services last year, said a colleague of Ms Wu’s who declined to give her name.

The company’s director Zhu Yimin was overseas when TODAY visited her Senja Road home in Bukit Panjang later in the morning. 

Singapore is not the only city where the company has run into problems because of indiscriminately parked bicycles.  

Earlier this month, it pulled out of the Melbourne market, as the Australian state of Victoria rolled out tough new rules to curb abandoned shared bicycles. The operator also had to withdraw its bicycles from Zurich, Switzerland and Munich, Germany, after they became an eyesore.