A report on state broadcaster China Central Television (CCTV) on Sunday highlighted the costs of acquiring and maintaining vehicles in the car rental economy, and said that industry’s high entry barriers mean startups are struggling to make good on their investments.

While car sharing companies face the danger of cash crunches, they also fill a certain niche in the transportation market. For distances between 10 to 50 kilometers, they can be more cost-efficient than ride-hailing services. In addition, despite the growing adoption of personal cars in China in recent years, buying and maintaining a vehicle remains, as one CCTV interviewee in Sunday’s report put it, an “unrealistic” goal for students and others under a certain income threshold.

In the same program, Tan Yi, CEO of car startup Gofun, told CCTV that the average daily uses for their electric cars was under three in 2017. He added that the company has sought to upgrade their fleet to “high-endurance” type vehicles, and has “passed the profit-loss balance line.”

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Bailey Hu

Bailey Hu is based in China’s hardware capital, Shenzhen. Her interests include local maker culture, grassroots innovation and how tech shapes society, as well as vice versa.