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Mobike expands deposit-free policy in effort to win global market share

BEIJING — Mobike, one of the pioneers of the bicycle-sharing craze, is scrapping a key part of its business in China by dropping the need for deposits amid fierce competition to win users.

Mobike is scrapping a key part of its business in China by dropping the need for deposits.

Mobike is scrapping a key part of its business in China by dropping the need for deposits.

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BEIJING — Mobike, one of the pioneers of the bicycle-sharing craze, is scrapping a key part of its business in China by dropping the need for deposits amid fierce competition to win users.

Existing customers in China will get their deposits back as the company adds electric-bikes to its fleet in the Chinese and international markets, the Beijing-based company said in a statement on Thursday (July 5).

The refunds will be given back within two to seven days of being requested, the company added.

Mobike's latest statement came about a week after it announced on June 29 that the company was dropping the deposit fee requirement for all Singapore users. Existing users can request for a refund of the S$49 deposit fee through the app, which will be refunded to their bank account within 10 working days.

Mobike's decision to drop its deposit fee policy for Singapore came days after rival bike-sharing operator oBike's abrupt exit from the Republic, citing a tough new licensing regime.

oBike's exit sparked anger among users who complained that they could not obtain a refund of their deposits — S$19 for students and S$49 for other users.

Mobike did not give a timeline for abolishing the deposit scheme in other countries. But tests by the company in about 100 markets reportedly showed a significant boost in users after the deposit policy was dropped.

The changes come as Mobike is integrated into the platform of online services giant Meituan Dianping, which bought the startup for US$3.4 billion in April.

With more than 200 million registered users and a request that each pay a 299 yuan (US$45) deposit, there has been speculation the company was sitting on billions of dollars worth of customer cash.

Given promotions and waivers, the actual total that has been collected and will be returned is about 1 billion yuan, according to a person familiar with the matter who asked not to be identified.

Mobike's move to expand its deposit-free policy also came as it tries to fend off rivals backed by Alibaba and Ant Financial.

China’s bike wars kicked off about three years ago when Ofo, which is now backed by Alibaba, and Mobike began putting two-wheelers on streets across China.

The dockless system, that lets them be dropped almost anywhere, proved popular and led to the emergence of rivals including HelloBike.

HelloBike saw a jump in market share after it successfully lured billionaire Jack Ma’s Ant Financial as a backer.

The company’s Chief Financial Officer Chen Xiaodong said in June that it handled about 20 million rides per day. Mobike said it handles as many as 30 million rides a day. BLOOMBERG

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