Here’s $2. Please Take My Bike

Anyone wondering how much the millions of shared bikes littering Chinese streets and sidewalks might be worth finally has a benchmark: about 12 yuan ($1.77) each.

That’s the figure put forth in a new announcement from Guangzhou Yueqi Information Technology Co. Ltd., whose trademark light-blue Xiaoming bicycles have become vehiculum non grata” on streets of the many cities where they remain following the company’s recent bankruptcy.

The meager price reflects the predicament that many of China’s struggling and insolvent shared-bike operators face as they try to recoup some of their millions of dollars in vehicle purchases to pay off creditors. It also spotlights the situation that many Chinese cities face in clearing the millions of bicycles that have overtaken their streets and sidewalks over the last two years.

Xiaoming has been in headlines since late last year when the company began failing to refund deposits to some of its users who wanted out of the service. Such deposits have become a point of contention at many such operators, as users fear such funds are often used to pay operators’ daily expenses rather than being held in reserve for eventual refunds.

Xiaoming recently went into bankruptcy, and launched a public account on the popular WeChat instant messaging service that provides updates on the latest twists and turns in that process. The company is now liquidating its assets under supervision of a court in its hometown in South China’s Guangdong province.

That’s where the 12-yuan figure emerged this week, when Xiaoming said it was paying that much per vehicle to a recycling firm it hired to collect its thousands of bikes from streets in Guangzhou, Shenzhen, Shanghai, Hangzhou, Nanjing and many other smaller cities where it previously did business. It did not say how many bikes it hoped to recover through the process, or how much money it believed it could get from the eventual sale of those bikes.

Ofo, one of the two largest service providers, pays an average of 700 yuan for its trademark yellow bikes when they are new, a former spokeswoman said. Beijing Mobike Technology Co. Ltd., the other major operator, declined to comment on the cost of its bikes. But previous media reports have put the amount significantly higher, at 1,500 yuan or more.

The new services that have exploded in China over the last two years differ from older municipal bike-sharing products due to their use of location-based and other technologies that allow users to easily find and unlock bikes using their smartphones. The business model proved highly popular because it allowed people to pick up bikes anywhere they could find them and park them anywhere when finished, paying a small fee based on the length of the ride.

While consumers and cities originally welcomed the services for their convenience and environmental friendliness, many later began to complain as thousands of bikes, many carelessly parked, began to clutter city streets and sidewalks. Last week, Kunming became the latest city in China to limit new shared-bike services within its borders. As the services have aged, so have the number of older and broken bikes in need of repair.

Xiaoming and many of the smaller operators have shut down, leaving Ofo, Mobike and a handful of other larger services in operation. But even Ofo has shown signs of distress, shuttering services in a number of Asian locations where it had previously expanded.

Contact reporter Yang Ge (geyang@caixin.com)