China’s bike sharing bubble is showing signs of strain after the country’s third largest firm said it was going under.
The country has seen a wave of iconic, brightly-coloured shared bicycles hit its city streets over the last year, helping revolutionise urban travel but also drawing some public ire over mountains of bikes clogging up sidewalks.
The chief executive of Bluegogo said in a public letter posted online he had “made mistakes” and the firm was winding up.
He apologised to investors, partners and 20 million registered users of the company’s 600,000 bikes.
He said financing in the market had become a “bubble”.
China’s bike sharing craze has been driven by huge investments, especially into the two market leaders Mobike and Ofo, which have raised billions of dollars from tech giants like Tencent Holdings and Alibaba Group Holding Ltd.
The two brands – often seen as China’s “Uber for bikes” – have deployed millions of bicycles around the country, and have pushed overseas into markets in the United States and Europe.
The trend hasn’t been without its opponents. Regulators have tightened rules around shared bikes and raised concerns that too many bikes were hitting the streets. Some cities have put bans on shared bikes, citing safety concerns.
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