More than 1600 bicycles have been left abandoned on the street and in warehouses after bike-sharing company Mobike failed in Australia for the second time.

The company’s website, app and bike-tracking software have been taken offline since Mobike quietly went under last year, preventing the company’s liquidators from knowing the location and number of bicycles left on the street.

A Mobike abandoned in the Sydney CBD.Credit:Nikki Short

Mobike’s failure comes as a new wave of bike-sharing schemes, such as HelloRide and Bird, have set up in Sydney, hoping that their electric bikes, GPS tracking and better relationships with councils will let them prosper.

Mobike arrived in Australia in 2017 as a Chinese start-up with more than $1 billion in investor funding and put its orange and silver push-bikes on city streets in Sydney and Queensland’s Gold Coast.

One of the country’s e-commerce giants, Meituan Dianping, bought it a year later for $US2.7 billion ($3.8 billion) at the height of the bike-sharing craze that infuriated residents with dumped bicycles.

By 2019, Meituan was moving to sell off or close its overseas operations as the company bled money.

Mobikes in Sydney in 2018, when the service was functioning. Credit:Peter Braig

A group of entrepreneurs took over Mobike’s Australian operations and rebranded it “Onyahbike by Mobike” but failed to make the business work, with scant posts on social media and a liquidator’s report showing consistent losses from the 2020 financial year onwards.

Mobike stopped trading in August last year and went into liquidation in October. In a report lodged with the company’s regulator two days before Christmas, liquidators at Chifley Advisory said they had been unable to find a buyer for its bicycles.

The liquidators said one of the company’s directors had told them there were “approximately 1600 bicycles located at four storage facilities in NSW and Queensland with an estimated value of $1,341,860”.

A number remain on city streets, but the liquidators do not know how many or where the bicycles are located.

“As the third-party software provider has terminated the company’s software, we are unable to access the information about the bikes currently deployed,” said Henry Kwok, one of the liquidators. “We were advised some bikes may be deployed in Gold Coast, Queensland.”

Reports from 2019 said Mobike would remove its bikes from that area.

The director’s estimate would mean the bikes were worth about $840 each, about as much as a low-end but new mountain bike.

The liquidators would not disclose how much an independent valuer said the bikes were worth, citing “commercial reasons” but could not find a buyer for the 1300 in NSW.

Gavin Moss, the liquidator, said in the report he was forced to renounce Mobike’s interest in the bikes because of the “valuation figures”, the bikes’ location, the cost of storage and the difficulty of getting the bikes’ software working for any buyer.

“I had no alternative but to make a commercial decision to disclaim interest in the bikes at all known locations,” he wrote in his report.

Moss’ colleague Kwok said Mobike remained the legal owner of the bikes but had disclaimed its interest in dealing with them. Anyone in possession of the bikes who sold them had to account to the liquidators, Kwok said, and pay any surplus they made back to the company.

The Chifley Advisory liquidators report said Mobike’s directors were not in Australia and this masthead was unable to contact them. Kwok said they had assisted the liquidators but declined to pass on contact information, citing privacy rules.

The chief executive of advocacy group Bicycle NSW, Peter McLean, said while many of the first-generation of bike-sharing firms were “low end”, the newer companies had better products and councils held them to higher standards.

“The e-bike share schemes now in place are much more convenient and easier to use,” McLean said. “They’re being serviced far better, and councils have stronger expectations and policies in place for them to abide by.”

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.

Most Viewed in Technology

From our partners

Source: Read Full Article