[Updated] O2O bike-rental deposits in China may not be as secure as users think

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.

What you get

Full access to all premium content and our full archives

Members'-only newsletters

Preferential access and discounts to all TechNode events

Direct access to the TechNode newsroom