Ofo hits speed bump as internal corruption allegations go public

2 min read

Ofo, a leader in China’s burgeoning bike-rental market, has found itself embroiled in corruption allegations this week.

The new first broke out on Maimai, a real name registered social networking platform for professionals, where one user was asking about working at ofo. However, the answers that followed took an unexpected turn towards internal corruption allegations.

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Screenshot of the Q&A on Maimai

A person claiming to be a former employee laid bare their own experiences, saying that there’s an overtime culture in the company.

996 (means the workday starts at 9 am, finishes at 9 pm, with an extended 6 day week), is the standard work practice here. The internal management is chaotic there’s no mechanism to speak of. Corruption is everywhere from the executive to grass root levels,” they wrote.

But then, a supposed current ofo employee confirmed the corruption allegations by adding that “a regional operator can steal tens of hundreds yuan per month, even a university operator can take tens of hundreds yuan or more.”

According to the exposure, the corrupt employees are ripping off the firm through two means: creating phantom workers (fake positions forged by corrupt staff who put the salaries in their own pockets) or soliciting kickbacks from manufacturing suppliers.

The phantom workers are usually in bike maintenance positions. If the rumors are true, this could partially explain why there’s such a high degree of damage to ofo bikes. Although ofo positioning itself as a connector rather than a maker of bikes, it’s a fact that most of its bikes are made by suppliers rather than contributed by end users. Local media cites a person familiar with the matter as saying that a supply chain leader purchases old tires from friends as pawns them off as new components for manufacturing. Needless to say, there must be some kickbacks involved in a case like this.

In response to the anonymous allegations, ofo has released an open letter to emphasize its zero tolerance attitude towards corruption. We have the open letter translated as below:

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  1. Anti-corruption is a top priority for all enterprises. Ofo established the Risk Control Department in 2016, a fast-forward move for a startup company. In this department, there are a number of experts from public security, supervision, and law, who have rich experience in anti-corruption work.
  2. We have zero tolerance for corruption.  Once a case is verified, we will treat these incidents with fair measures.
  3. These accusations from the anonymous source lack details. These remarks are full of personal emotions but lack the specific details of time, place and character. They should be used neither as evidence for anti-corruption work nor as a news source for quoting when there’s no direct verification from the parties concerned.

The broader picture is that this is not a single case. China’s tech landscape is filled with unsavory practices. Internet giants from BAT to medium-sized firms like Meituan-Dianping and JD have all launched campaigns to clean out corruption.