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ofo urges users to transfer deposits to online loan platform for deposit-free rides
Bike rental firm ofo today (November 23) began urging its users to transfer their existing deposits in the app to online loan platform PPmoney as part of a commercial agreement with the lender, our sister site is reporting.
ofo last year increased its deposits for new users from RMB 99 ($14) to RMB 199, though existing users were not affected. Now, riders who have not upgraded to the new deposit tier have been presented with an in-app pop up prompting them to convert their RMB 99 deposit to a RMB 100 asset in the PPmomey ecosystem in order to enjoy deposit free rides. Users who do not want to take part can refund their deposits, according to the company.
PPmoney then has a 30-day lock-in period in which users don’t have access to their money. However, the company claims that once the time has lapsed, users can withdraw the deposit with interest.
ofo has been criticized for the move, with commenters saying it is selling its users and attempting to avoid paying back deposits. ofo responded by saying that it is a typical market activity and that it is limited to riders who have paid RMB 99 deposits. Users are also required to submit their ID information when opening new PPmoney accounts. ofo added that its current refund process could take up to 15 days.
Several ofo users told local media that despite the company’s 15-day refund policy they have been waiting for a refund for up to a month.
PPmoney defended the partnership by saying that the companies have many overlaps in their user base.
Rumors of ofo cash crunch have been circulating for the better part of a year. The company has been pulling out of international markets and having its global assets sold. It has faced lawsuits from suppliers claiming the company has yet to pay its debts and has been rumored to be in the midst of a takeover by ride-hailing giant Didi.