Bike-sharing company Mobike faces $1.3m problem after collapse

Home Economy Bike-sharing company Mobike faces $1.3m problem after collapse
Bike-sharing company Mobike faces $1.3m problem after collapse

More than 1600 bikes worth a whopping $1.3 million can’t be recovered and will be left abandoned on streets and in warehouses around Australia after bike sharing company Mobike collapsed, a liquidator’s report has revealed.

The Chinese owned operation saw Mobike’s orange and silver bikes hit the streets of Sydney and the Gold Coast in 2017 as it became a global phenomenon with its dockless bike sharing scheme.

At the time, it boasted “incredible success” in cities like Milan, Florence, Manchester and Washington D.C.

Meanwhile, its launch on the Gold Coast five years ago included bikes featuring internal three-speed gears and surf racks with 2000 of its bikes hitting streets across Southport, Surfers Paradise, Broadbeach and Varsity Lakes.

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But despite the company being sold for $3.8 billion in 2018, it went under late last year.

As a result, its website, app and bike tracking software were shut down, making it impossible for Mobike liquidators Chifley Advisory to uncover the exact location or number of bikes still in circulation.

The liquidator’s report revealed the company had suffered losses since 2020.

It it also noted that 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”.

With Mobikes having gone into liquidation in October, attempts to find a buyer for the bikes, which could be worth an estimated $840 each, have not been successful – in particular for 1300 located in NSW.

“As the third-party software provider has terminated the company’s software, we are unable to access the information about the bikes currently deployed,” liquidator Henry Kwok told the Sydney Morning Herald.

“We were advised some bikes may be deployed in Gold Coast, Queensland.”

As a result the liquidators said in the report they had “no alternative” but to make a “commercial decision to disclaim interest in the bikes at all known locations”.

They based the decision on “valuation figures” which were not shared publicly, the bikes location, the cost of storage and the difficulty in getting software rebooted.

However, Mr Kwok said Mobike still remained the legal owner of the bikes despite no longer retaining an interest in dealing with them and anyone who sold them would have to pay back any surplus.

In China, Mobike was attempting to turn a profit last year by raising prices, said a report from the South China Morning Post.

Mobike owner Meituan blamed the price hikes on “increases in hardware, operations and maintenance costs”, while the industry as a whole had been hit by a shortage of raw materials, including steel, plastic and tires and had also battled intense competition with billions lost.

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