Coolqi funding shortage affects operations: internal document

Source:Global Times Published: 2017/9/25 21:08:39

Bike-sharing start-up Coolqi has sent employees an internal notice saying that the company faces a funding shortage that is affecting normal operations and staff "should decide about their own future," according to the Beijing News on Friday.

Since mid-August, users have been complaining of problems getting refunds of their 298 yuan ($45) deposits. Coolqi previously said that refunds were being delayed due to technology glitches, the report said.

On Friday night, Coolqi's administrative department sent an internal communication to employees indicating that funds are so tight that both normal operations and payrolls will be affected, the newspaper said. All base pay is covered through September 30, the document said.

Employees can voluntarily choose to stay or start to look for new jobs. Those employees who choose to stay might not get paid in a timely manner, according to the exclusive report.

Since last year, several pioneering bike-sharing companies have stopped operations or entered bankruptcy, such as Wukong Bike and 3V Bike.

In June 2017, Coolqi ranked No.3 in terms of bikes, the user base and active users in its mobile app, the report noted.

As an innovative service model, bike-sharing has become a hot topic as the industry evolves. On September 15, the Beijing government issued a guideline on bike sharing, giving it legal status as one of the city's transport components.

Considered the rising competition among bike-sharing platforms, a merger between two major players - ofo and Mobike - could be a feasible way out, Zhu Xiaohu, managing director and managing partner at GSR Ventures Management Co, domestic news site reported on Monday.

However, there may be policy barriers, as the consolidation might raise monopoly concerns and antitrust investigations.

In China, 19 million people used shared bikes last year, and the number is expected to rise to 50 million this year, the Xinhua News Agency reported on September 15.

Posted in: COMPANIES

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