OBike ceases operations in Singapore, while GrabCycle pauses new user sign-ups

Photo credit: Grab

Bike-sharing firm oBike has ceased operations in Singapore as of today, suggesting that the cost of complying with stricter regulation of bike-sharing in the city-state forced its departure.

But that might have not been the whole reason for its exit.

The company said in a statement that it halted its Singapore service as it did not expect to “fulfill the new requirements and guidelines released by LTA [Singapore’s Land Transport Authority] towards dockless bicycle sharing” in the city-state.

The Singaporean parliament passed a new law in March that has led to the introduction of a licensing framework for bike-share operators.

This requires dockless bike firms to compel their users to scan a QR code at designated bike-parking locations when ending a ride. The regulation is aimed at tackling the problem of shared bikes being parked indiscriminately in locations where they cause a nuisance or block right of way.

Bike-sharing companies have until July 7 to apply for a license to operate in public places. OBike previously said it would submit its application by the deadline. Mobike and Ofo have also indicated they will be applying for licenses.

While oBike certainly lacks the massive funding of its unicorn rivals, compliance-related costs do not seem to have hindered smaller players such as Anywheel and SG Bike from seeking licenses from LTA.

A closer look at oBike’s financial statements – as filed with Singapore’s Accounting and Corporate Regulatory Authority – indicates it may be facing bigger financial woes. The company recorded a pre-tax loss of US$3.13 million between its incorporation in November 2016 to the end of 2017.

Over the same time frame, oBike brought in US$671,000 in revenue. It held US$13.9 million total assets -including US$129,000 in cash and cash equivalents – with US$16.7 million total liabilities as of the end of last year.

The news of oBike’s Singapore pullout also comes after the company admitted it had converted some of its users’ deposits into “Super VIP” (SVIP) subscriptions without their knowledge, potentially preventing affected users from reclaiming their money. OBike also faced criticism for lengthy delays in returning deposits to users who had requested refunds.

While ceasing operations in the city-state, oBike said that its services in other countries will continue. Singapore-based users who have signed up for the company’s SVIP membership package will be able to exercise their member benefits in oBike’s overseas markets, it added.

However, oBike did not indicate if – and how – it will return deposits to Singaporean users.

Following today’s announcement, the company’s Facebook page has been bombarded with comments featuring the hashtag “#refundmydeposit.”

GrabCycle ditches oBike

Industry-wide crunch