What happened: At a press conference on Tuesday, a spokesman for China’s Ministry of Transport said that beginning June 1, bike-rental companies and financial institutions will have six months, or until November 30, to implement stricter measures for user deposits. Under the new rules, companies must set up separate bank accounts to store deposits, and return users’ money within two working days of their refund requests. On Tuesday, a BJNews.com reporter noted that close to 14.7 million users on “shared bike” platform Ofo were still waiting for their deposits to be returned.
Why it’s important: The new regulations, first revealed to the public in draft form in March, move to increase accountability for the “shared bike” industry in the wake of bankruptcies and struggling businesses. Bike companies have a longer time for implementation than previously announced due to the difficulty of making the required arrangements, according to the Ministry of Transport spokesman. However, the fact that former investor darling Ofo has even more unpaid user deposits than were reported in December, as well as a growing pile of debt, point toward a less-than-certain future for the field. Even industry leader Mobike is projected to be a loss-maker for its parent company Meituan-Dianping until 2021, although it has partially skirted the issues of refunds by allowing new users to ride deposit-free.