LTA to cancel ofo's bike-sharing licence; two rival firms get green light

Ofo was granted approval to operate 25,000 bicycles under the LTA's bike-sharing licence regime in September 2018.
Ofo was granted approval to operate 25,000 bicycles under the LTA's bike-sharing licence regime in September 2018.ST PHOTO: KEVIN LIM

SINGAPORE - As beleaguered bike-sharing firm ofo reaches the end of the road here, Singapore-based rival Anywheel is set to expand its fleet tenfold, while a newcomer - Moov Technology - has been granted approval to roll out 1,000 bikes.

The Land Transport Authority (LTA) announced on Wednesday (April 3) that it has issued a notice of intention to cancel ofo's licence to operate a bike-sharing service here.

In September last year, the Beijing-based firm was granted approval to operate 25,000 bicycles in Singapore under the LTA's bike-sharing licence regime.

However, ofo's licence was suspended in February after it failed to meet regulatory requirements, such as failing to implement a QR code-based parking system that would allow its bicycles to be parked only within specified areas.

Ofo 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 resume operations and fulfil the conditions.

"Despite the deadline extension, ofo has not complied," said the authority, adding that ofo has two weeks to submit a written representation if it wants to retain its licence here.

This comes after Chinese firm Mobike announced last month that it was pulling out of the Singapore market.

 
 
 

The Straits Times has approached ofo for comment.

In December last year, ofo chief executive Dai Wei said the firm was facing "immense" cash-flow problems and had considered filing for bankruptcy.

Subsequently, news outlet Today reported that ofo had laid off its entire operations team in Singapore without compensation in January, and also owed vendors here more than $700,000.

Separately, the LTA announced that existing operator Anywheel - which was awarded a "sandbox" licence to operate 1,000 shared bikes here in September - has been granted a full licence to run a fleet of 10,000 two-wheelers.

Sandbox licences are granted to new operators, allowing them to operate smaller fleets while the LTA assesses their operations.

Meanwhile, industry newcomer Moov Technology has been granted a sandbox licence, which allows it to have 1,000 bicycles here.

Ywise Circle, another firm that applied, was not granted a licence as it did not satisfy the evaluation criteria, the authority said.

Applications were assessed based on factors such as the firm's proposal to manage indiscriminate parking, as well as fleet utilisation and the track records of existing operators.

"Under LTA's licensing framework, operators who have been granted sandbox and full licences for device-sharing services will be allowed to operate in public places for one year and two years respectively," said the authority.

The LTA licences cap the number of bicycles companies can run, and require the firms to take measures to curb indiscriminate parking - such as through a QR code-based parking system that will allow their bikes to be parked only within designated areas.

The authority added that the results of personal mobility device (PMD) sharing licence applications will be announced by the middle of this year.

"More time is needed to evaluate this first licence application cycle for PMD-sharing activities, which involve new activities such as the charging of shared devices that are not present in bicycle-sharing services," said the LTA.

There are currently 13 companies in the running to offer PMD-sharing services here, including United States firm Lime, which is valued at more than US$2 billion (S$2.7 billion).