Bike-sharing firm ofo's licence cancelled by LTA

In an update, the Land Transport Authority said it cancelled ofo's bike-sharing operating licence yesterday as the company has not provided "sufficient justifications on why its licence should not be cancelled". ST PHOTO: KUA CHEE SIONG
In an update, the Land Transport Authority said it cancelled ofo's bike-sharing operating licence yesterday as the company has not provided "sufficient justifications on why its licence should not be cancelled". ST PHOTO: KUA CHEE SIONG

Beleaguered bike-sharing firm ofo has lost its licence to operate in Singapore, after it failed to justify why its permit should not be cancelled.

The Chinese firm, whose licence had been suspended since mid-February, received a notice of intention to cancel its licence from the Land Transport Authority (LTA) on April 3. It was given up to 14 days to make written representations regarding the decision.

In an update, the LTA said it cancelled ofo's bike-sharing operating licence yesterday as the company has not provided "sufficient justifications on why its licence should not be cancelled".

The LTA said that "ofo will not be able to offer dockless bicycle-sharing services in public places in Singapore without this licence".

Unlicensed operators can be fined up to $10,000 and/or jailed for up to six months, with a further fine of $500 for each day the offence continues after conviction.

The LTA also said it will now remove ofo's bicycles using its powers under the Parking Places Act, if these are abandoned in public places or parked illegally.

Collected bicycles that are not claimed by ofo will be sold or disposed of, it said, adding that money from the sales or disposal may be used to partially offset the cost incurred in removing and storing the bicycles. "Any shortfall in recovery may be drawn from ofo's licence fee," the LTA said.

The firm had operated here since early 2017 and once had more than 90,000 bikes deployed here, according to a former employee.

Reports emerged late last year that ofo was battling "immense" cash-flow problems.

 
 

The LTA suspended ofo's licence in February after it failed to meet regulatory requirements like implementing a QR code-based system that would allow its bicycles to be parked only within specified areas.

It was later given until March 28 to meet these requirements, as the firm had told the LTA that it was in the "advanced stages of negotiation" to partner with another party to fulfil the conditions and resume operations. But it ultimately failed to comply with the requirements.

The licence cancellation leaves Mobike, Anywheel, SG Bike and industry newcomer Moov Technology as the remaining bike-sharing operators in Singapore.

Mobike, which has a licence for 25,000 bikes, said last month it would withdraw from Singapore.

SG Bike currently operates 3,000 bicycles, while Anywheel was earlier this month awarded a licence to run a fleet of 10,000 bicycles, up from 1,000. Meanwhile, Moov was granted a sandbox licence to operate 1,000 bicycles here.

Anywheel founder and chief executive Htay Aung said bike-sharing firms leaving the market will likely affect consumer confidence, and work will have to be done to restore trust in the industry.

He added: "We have to learn lessons from our fellow players who have exited the market, and we have to expand responsibly and manage our growth."

Mr Ang Hin Kee, deputy chairman of the Government Parliamentary Committee for Transport, said the remaining firms will need to work out a better business formula moving forward.

"Bike-sharing firms will probably have to share or pair their solutions with other options such as public transport operators or ride-hailing services," he said.

"Commuters can then complete their entire trips with a single packaged service and benefit from economies of scale and a seamless flow-through."

 
A version of this article appeared in the print edition of The Straits Times on April 23, 2019, with the headline 'Bike-sharing firm ofo's licence cancelled by LTA'. Print Edition | Subscribe