You must have noticed the boom bike-rental companies in China as an increasing array of rainbow colored bikes mushrooming on streets across the country. Endless financing rounds from big names like Tencent, Didi, and Foxconn have been injected into one or another of the startups that involved in a heating field.

Despite the initial “wows” on the changes that bike sharing or, to use a more mundane term bike rental, have brought to our lives, the development of this sector has long been shadowed by pitfalls such bike vandalism and illegal parking.

While these issues are still unsolved, the recent news that investors of Kala, a bike-rental startup operating in Putian of Fujian Province, walking away with all users deposits has sparked public concerns about the safety of their capital. With this question in mind, let’s walk through some of the facts and problems with bike-rental deposits.

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Emma Lee

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at lixin@technode.com.