Chinese car-sharing startups face reckoning as more than 500 players crowd into a fast-growing, but young, market
They are in one of the world's most promising growth markets, but Chinese car-sharing startups seem to be having a rather bumpy ride of late.
Last month, Beijing-based TOGO ran into a deposit refund crisis as anxious users flocked to cancel their accounts and reclaim their RMB 1,500 deposit – but had trouble getting their money back. TOGO was said to be shrinking or even suspending their operations in several cities because of exorbitant maintenance costs; hence the panic.
In October 2017, another Beijing-based car-sharing app, EZZY, said it was closing for good. Launched in March 2016, EZZY used to impress the public with its high-end fleet, which included models like the BMW i3 and Audi A3.
The company's founder, Fu Qiang, attributed the shutting down to his failure to secure new funding. “I began seeking a new round of financing after we received RMB 20 million in February . We know this sum is far from enough.”
And EZZY is not alone. UU Cars, also a Beijing-based player, folded in March 2017, blaming “the fact that we had not received the agreed investments from VCs timely.”
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