Chinese new energy vehicle rental startup Pand Auto suspended its business on Monday due to operational problems, in a coronavirus-stricken travel climate.

Chongqing-based Pand Auto has started processing users’ requests for refunds on their deposits. The firm did not specify reasons behind its operational difficulties.

Pand Auto was founded in 2015, when the sharing economy started to take off in China. Before the business suspension, the company deployed its vehicles in scenic spots across China, allowing users to rent a car in one city and return it in another, according to the company’s website. It also serviced industrial complexes and big residential communities.

In 2019, Pand Auto tested the waters in self-driving by gaining a license from the Chongqing government to conduct road tests of its autonomous vehicles, putting it in competition with industry leader Didi Chuxing, which aims to increase the use of its driverless cars in its ride-hailing services.

As early as 2018, Togo, a Beijing-based car-sharing firm, faced a cash crunch with media reports saying that users had difficulties in getting their deposits back and that Togo owed wages to its operational and maintenance staff. This sparked skepticism over the prospects of China’s sharing economy. At the time, some industry experts said that China’s car-sharing firms would have trouble reducing costs, and that the situation would become worse when users’ deposits were used for blind expansion.

Contact reporter Ding Yi (yiding@caixin.com)

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