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S’pore vendors demand over S$700,000 from Ofo, which owes past and present staff thousands in unpaid claims

SINGAPORE — At least two companies here have sent letters of demand to beleaguered bike-sharing firm Ofo to claw back money owed for logistic services, TODAY has learnt.

S’pore vendors demand over S$700,000 from Ofo, which owes past and present staff thousands in unpaid claims

Employees in Ofo’s Singapore office are owed thousands of dollars in unpaid transport and mobile phone claims accumulated over more than six months, TODAY understands.

SINGAPORE — At least two companies here have sent letters of demand to beleaguered bike-sharing firm Ofo to claw back money owed for logistic services, TODAY has learnt.

The two vendors in Singapore have not been paid for their services for at least three months, with the unpaid sums totalling more than S$700,000.

Employees in Ofo’s Singapore office are also owed thousands of dollars in unpaid transport and mobile phone claims accumulated over more than six months, TODAY understands.

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The China-based firm — which is backed by conglomerate Alibaba Group — is battling cash-flow problems and dealing with irate customers in China demanding refunds of their deposits.

Former and current staff members of its Singapore office and vendors said that trouble is brewing here as well.

Logistics company SB Express, which provided more than 10 lorries to Ofo from May to November this year to transport the bicycles, confirmed on Thursday (Dec 27) that Ofo owes the firm between S$500,000 and S$600,000 in unpaid invoices.

SB Express is also seeking payment of at least S$40,000 for services provided in April to Winning Logistics — a global logistics firm hired directly by Ofo’s Beijing office which outsourced its Singapore operations to SB Express.

Mr Sebastian Lee, SB Express’ managing director, told TODAY that he has been chasing Ofo for payment but to no avail. The company’s lawyers sent a letter of demand to Ofo this month.

“Email them, no reply. Call them over the phone, never pick up… They keep dragging”, he said.

Mr Lee said that he spoke to Ofo Singapore’s acting general manager Jack Zhou in November, with the latter saying that he is waiting for instructions from Beijing.

Another local logistics firm that has been in operation for more than 30 years is also threatening legal action against Ofo.

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>> Ofo, pioneer of China’s bike-sharing boom, is in a crisis

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Mr Kelvin Cheong, its chief executive officer, did not want the firm to be named, but told TODAY that it is owed a total of S$174,000.

His company started supplying seven lorries to Ofo in April, but has stopped its services last month due to arrears owed since September.

He has also run into issues trying to get Ofo to pay up. Mr Cheong added: “They just say the funds are coming in next week. Every Friday, they will say it’s coming in next week. But they won’t tell you how much they are going to pay.”

He claimed that Mr Zhou told him at the end of November that Ofo would pay him S$10,000.

A third company involved in the recruitment of 200 bike marshals for Ofo’s operations team is also demanding payment, TODAY has learnt. These temporary workers were mainly used to redeploy Ofo’s bicycles and deal with errant parking, and the recruitment firm terminated the services in November.

Frustrated with the situation, Mr Cheong said that the vendors are considering filing a report with the police’s Commercial Affairs Department.

‘THINGS LOOK SHAKY’

When TODAY visited Ofo’s registered office address at AXA Tower along Shenton Way last week, an employee of co-working space operator JustCo said that Ofo had moved out at the end of November, a month before its lease was up.

JustCo was unable to provide details on why Ofo had moved out of its working space.

Former and current Ofo employees told TODAY that the firm owes them thousands of dollars in claims for transport, mobile phone, warehouse tools and team-building meals, among others.

They also pointed out that Ofo Singapore’s staff strength has shrunk from more than 100 a year ago to about 15 now. 

Speaking on condition of anonymity, a former employee said that the company owes him S$5,000 in claims, while one staff member has not been reimbursed for his claims of over S$1,500 for more than six months.

The former employee said that the claims were approved by the former country general manager, but they were told in November — after Mr Zhou was appointed acting general manager — that the Beijing office would not recognise these claims.

Central Provident Fund (CPF) payments by Ofo to employees have also been late on at least three occasions over the past year, a staff member said.

With the situation rapidly escalating in China, those who are still hired by Ofo are concerned about their jobs, as one employee said that “things look shaky” and he is “not optimistic” about the firm’s future.

While monthly salaries have been paid so far, they said that the company could not promise that they would be paid this month when questions were posed to management. 

“They cannot give us a guarantee and said, ‘You just wait and see’. What is this nonsense?” one staff member asked.

TODAY has reached out to Mr Zhou for comments and was referred to the firm’s public relations officer in Beijing. 

READ ALSO:

>> New QR code parking system for shared bikes will charge, ban errant cyclists from January

Once a tech start-up darling in China, Ofo attracted major funding from Chinese and international investors and had been valued at more than US$2 billion (S$2.7 billion). But a costly battle with rival Mobike eroded its ability to make payments to suppliers, and its chief executive officer and founder Dai Wei said in a letter to employees this month that the firm is facing “immense” cash-flow problems and disbanding the company has been considered as an option.

Close to 12 million customers in China are demanding refunds of their deposits, adding to their financial woes. Over the weekend, Mr Dai was put on a Chinese government blacklist for defaulting on debts.

Ofo Singapore’s Facebook page has been inundated with comments from users, who claimed that their refund requests have gone unanswered.

Ofo is not the first bike-sharing company here to land itself in hot water. In June this year, oBike announced its shock exit from the Singapore market, saying there were difficulties in meeting rules set down by the Land Transport Authority (LTA) to tackle indiscriminate parking under a new licensing regime.

Since then, oBike users have tried unsuccessfully to get their deposits returned and vendors have also not been paid monies owed to them.

FIRST TO RAISE PRICES 

When contacted by TODAY, the LTA referred to its earlier statement in October which said that six bike-sharing firms here were granted permits on Sept 28 and had paid for their licences.

Ofo was originally granted a fleet of 25,000 bikes under the licensing scheme. It then made a request to LTA to reduce that number to 10,000, due to difficulties meeting its financial obligations for the original fleet size, and this was approved.

The firm was the first to raise prices — by up to three times — just over a week after the LTA's announcement on the granting of licences. Those who opt for the pay-as-you-go service are charged 50 cents per unlock, over and above a rate of 50 cents per 15-minute block. This means any ride less than 15 minutes costs S$1, while a 30-minute ride sets a user back by S$1.50. Users previously paid 50 cents for each 30-minute period.

A one-hour ride costs S$2.50, more than double the previous rate of S$1.The Ofo pass costs S$8.99 (30 days), S$16.99 (60 days), and S$26.99 (90 days), up from its previous pricing of S$6.99, S$15, and S$25, respectively.

 

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