Shaky Ofo owes vendors money in Singapore
Ofo’s Singapore office owes up to S$700,000 to its vendors, and it is looking unlikely that the bike sharing company will pay up.
The Singapore office of Ofo at AXA Tower along Shenton Way was found vacated according to a report by TODAY.
Vendors have complained that they could not get hold of Ofo.
At least two companies have sent letters of demand to get back money owed for logistics services. 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.
They said Ofo is not picking up their calls and also not replying to their emails.
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. Central Provident Fund (CPF) payments by Ofo to employees have also been late on at least three occasions over the past year.
Ofo Singapore’s staff strength has shrunk from more than 100 a year ago to about 15.
The situation for Ofo in China is no better as the company seems to be running out of cash. And goodwill from its customers.
The company’s users have turned up at Ofo’s offices in Beijing to demand the return of deposits paid upfront to use the service. Over 12 million people have so far requested repayment online.
In a letter to employees last week, Ofo CEO Dai Wei said the company was struggling to resolve a cash shortage, in part because of user refunds as well as payments to suppliers. He said the firm was battling on amid "pain and hopelessness".
In early December a local court in Beijing put Dai, the company’s chief executive, on a blacklist for failing to repay his debts. The ruling said he must refrain from incurring excessive business expenses, including playing golf, flying business class, or staying in luxury hotels.
At its peak, Ofo had bike fleets in more than 20 countries, from France to Australia and the United States. But it has since found itself facing a number of obstacles in the countries it operates in, from traffic regulations to vandalism, as well as increasing costs.
The once rapid growth in the industry has cooled down, with the number of bike-sharing users in the country forecast to grow only 14.6% in 2018, a steep drop from 600% growth last year, according to market research firm iiMedia. Slower growth has further intensified competition, with dozens of players now reduced down to three main ones – Mobike and Ofo, and Shanghai-based Hellobike – but none have turned a profit yet.
Although Ofo’s misery and financial situation would not be apparent to most people and companies, a check on a database of companies such as Riabu.com will enable users to see incidents of late payments or unpaid invoices.