Updated: DiDi will have their own bike rental unit after Bluegogo tie-up

Updated January 9, 2018: This article was updated to include a statement from Didi.

Details have been released on the Didi Chuxing and Bluegogo tie-up. According to sources quoted by Pingwest (in Chinese), negotiations between the two mobility firms have been completed but Didi will only take over a part of Bluegogo’s business. Didi plans to buy up Bluegogo’s bicycles as a part of its quest to enter the bike rental market. The company has issued a statement regarding its next move.

Didi Chuxing announced today that it will soon launch a comprehensive bike-sharing platform within its APP, which will integrate ofo, Bluegogo, and other potential bike-sharing partners, as well as DiDi’s upcoming own-branded bike-sharing service. DiDi will also introduce deposit-free arrangements to support a better user experience.

Meanwhile, DiDi today officially reached an agreement with Bluegogo on cooperation arrangements on the latter’s bike-sharing business. Users will be able to use Bluegogo bike through DiDi’s APP with no deposit required.

The ride-hailing firm will inject Bluegogo with cash to pay out late wages for staff. However, when it comes to users’ deposits, Didi will not pay them out directly. Instead, it plans to settle the matter by exchanging them into coupons for rides with Didi. As for supplier arrears, the payments will be left to Bluegogo’s team.

According to industry rumors, Didi plans to fully take over Bluegogo after the latter has paid out its dues to suppliers and staff, and the deposit issue has been settled. Didi is already the largest shareholder of ofo.

Despite the mess created by Blugogo’s implosion, its business is still valuable, according to Pingwest. Most of the major cities in China have restricted the number of shared bikes after bikes started pilling up on public roads as companies competed for the market. Bike rental operators without licenses are now restricted by the local government. Bluegogo has a license to operate in every city except Shanghai.

Didi’s foray into bike rental makes sense for the company since bicycles are the biggest competition for ride-hailing when it comes to shorter trips. This is why Didi has made hefty investments into ofo beginning with September 2016. On the other hand, Mobike has made similar moves by launching its own electric car rental platform.

Bluegogo once ranked 6th among the top 10 bike rental startup list by Cheetah big data. Since June, the company has been in trouble with its overseas expansion to the US halted by city authorities and its planned B Series financing round never materializing. In November 2017, Bluegogo’s founder Li Gang announced that the company has reached a strategic cooperation with Guangzhou-based Green Bike-Transit (拜客出行) which was fully authorized to operate its bikes.