Bluegogo is going bust. Staff from the bicycle rental company broke the news yesterday that the company is dissolving and salary payments will be delayed until February 10, 2018. TechNode’s Chinese sister site has confirmed that the salaries are indeed delayed and that the company is in a poor state (in Chinese).
Even more shocking is that the head of Bluegogo’s market operation department, Vice President Hu Yufei, revealed during a telephone call with TechNode Chinese that he has been gone from the company for several months now, adding that they should “ask people from Bluegogo about the specifics.”
Another employee from the company’s marketing department has said that he has already left his job in Bluegogo and that his former colleagues have been waiting for their salaries for months. Another senior manager revealed that he has already left the company and that there will be another team to take over the Bluegogo brand. He disclosed that other teams refer to outside companies.
The paradox is that in September while Bluegogo’s staff was waiting for wages, Hu Yufei told TechNode Chinese reporters that “too many rumors on the market are not true, I hope you don’t believe them.” He also announced a big media event for National Day holidays in October which never happened while Bluegogo CEO Li Gang offered the same rhetoric. According to media reports, Li has been in an unknown foreign country for some time.
The bad news just kept piling up from then. In October, the company denied rumors that it is trying to solve its cash flows issues by selling its business. Reports at that time documented a number of complaints from Bluegogo users that have not received refunds for their deposits within deadlines. The bike rental then promised a new deadline for refunds: November 10th.
The deadline has passed but many Bluegogo users have yet to receive their deposits. And while Chinese users are certainly angry to lose their RMB 100 deposits ($15), for US-based users the situation is even grimmer—they stand to lose a $100. In addition, the company still owes RMB 400 000 to suppliers. Media has reported that around 70 vendors have gathered in front of its Beijing office.
We can likely track the beginning of Bleugogo’s woes back to the beginning of the year. The company shipped hundreds of bikes to San Francisco just to have the local government issue regulations that would make it almost impossoble to operate in the city. The company announced its Series B round of financing in March and then moved that date to June but the money never came through. The company also discussed an acquisition with ofo and Mobike but was refused.