By Divina Samtani | Despite raising US$9 million last August, Hong Kong-based dockless bicycle rental startup has quickly withdrawn from the highly competitive and growing industry that is estimated will be worth US$3.6 billion by 2020.
Gobee.bike started operating in April 2017, but on July 10 announced on Facebook that it would be closing permanently.
“Our decision is purely due to our financial situation,” Gobee CEO Raphael Cohen wrote in a post to its more than 9,500 Facebook followers. A South China Morning Post article reports that Gobee has about 80,000 active users, and 350,000 registered users.
“After over a year in service, we unfortunately have not been able to make the service profitable, and the financial costs of maintaining the bikes in their best condition has proven to be too high for us to sustain the business. Starting from today, we do not accept any new payment. Existing users can still use our bikes for 1 week from today until July 17. After that, they will be locked.”
Many chalk up Gobee’s failure to its rapid expansion, including a short-lived ride in Europe that ended in February. Not even venture capital from Grishin Robotics, which spearheaded the initial round of funding, combined with Alibaba’s Hong Kong Entrepreneurs fund could save the company.
The US$9 million raised in August was used to further develop the product and improve technology, while also financing the international plans that ultimately proved unsuccessful.
On Gobee’s website, the company claims its users cycled nearly 163,000km, burned more than 5 million Kcal, and reduced about 21,000kg of Co2.
Underneath the post signed off by Cohen, users are questioning how they’re going to use up their remaining Gobee credits when the deadline to stop using the bikes is July 17th. There are reports they might only get back their deposits, not the amount credited in their accounts.
The unexpected closing of Gobee.bike brings into question whether or not Hong Kong is serious about trying new, more sustainable methods of transportation.
Gobee.bike isn’t the only bike sharing platform to be retreating from international communities. China’s Ofo – which was reportedly mulling a takeover of Gobee in April and boasts 200 million users in 20 countries – is withdrawing from Australia, Israel and India in favour of prioritising core markets such as China.
Though the mainland is currently a hotbed for bicycle sharing, it is also pushing the limits of sustainable usage as the gigantic influx of these companies has resulted in streets and fields overflowing with discarded bikes.
Gobee is telling users their deposits are secured and can be fully refunded. Users can request a refund until August 10. Gobee.bike will not be able to process refund requests made after August 10.