NEW YORK • Less than a year after Beijing-based ofo entered the United States with big ambitions, the world's largest bike-share company plans to shut down most of its US operations, the Wall Street Journal (WSJ) reported yesterday, citing people familiar with the matter.
Ofo told its US employees on Wednesday that it is cutting the vast majority of its workforce in the US and retreating to a handful of larger cities, these people said.
Ofo told staff it is still determining exactly which cities it will continue operating in, the people said. It currently has more than 40,000 bicycles in more than 30 US markets, the report said.
At least three senior executives have left ofo's US operations in recent weeks, including its chief in North America, ahead of the planned downsizing, the newspaper's sources said.
Mr Andrew Daley, ofo's new head of North America, said in a statement that the company has begun to "prioritise growth in viable markets that support alternative transportation and allow us to continue to serve our customers".
Ofo is the largest global player in the business of dockless bicycles, which riders rent through an app, then leave wherever their ride ends.
It claims to have deployed more such bicycles than any other company, leading a business that has reshaped urban transportation in China and other countries in the four years since it took off.
The company is one of seven which have applied to Singapore's Land Transport Authority for a formal licence to offer bike-sharing services.
Ofo this winter announced that it had secured US$866 million (S$1.2 billion) in funding from backers including Alibaba Group Holding. Other investors include Chinese ride-hailing service Didi Chuxing Technology Co.
Ofo last year began a big push into the US and has blanketed streets of cities including Dallas, San Diego, Scottsdale, Arizona and Seattle with its distinctive yellow bikes. It aspired to reach 300,000 bikes on US streets by the end of this year.
But growth was slower than expected in the US, where human-powered bicycles have proven less popular than expected, WSJ said.
Ridership in many US cities is well below what the companies need to break even, the report said, citing former ofo employees.
Adding to the challenge, dense markets like Boston and Manhattan have exclusive bike-share agreements with companies that have installed docks - blocking the entrance of dockless companies.