It seems that ofo's journey in Singapore is quickly coming to an end.

According to a statement by the Land Transport Authority (LTA) on January 15, the Chinese bike-sharing company have failed to comply with licensing requirements despite being given "an ample preparation period for compliance". Specifically, ofo failed to:

1. Reduce its maximum bicycle fleet size to 10,000
2. Implement the QR-code parking system in its app.

LTA's statement comes on the heels of news that ofo had cleared out their Shenton Way office and owes money to vendors and staff.

Early in December 2018, ofo’s CEO Dai Wei told the company that he was considering shutting down the company because of “immense” cashflow problems after engaging in a price war with its rivals in China.

Dai has been blacklisted by the Chinese government for defaulting on debts.

Latest casualty

oBike and Grabcycle have exited the market.

ofo's could well be the latest bike-sharing company casualty in Singapore after LTA put in place a licensing system making these companies accountable for where their bicycles end up. Some have protested that this put a financial strain on them.

This licensing system was put in place because in the past few years, an unregulated industry saw the over-eager expansion of several companies that flooded the island with bicycles, leading to an oversupply in public spaces.

According to LTA in May 2018, there were about 100,000 dockless bicycles in Singapore, with only half being used at any one time.

Aside from that, there were no fixed parking spaces for them, which meant they were parked indiscriminately anywhere and everywhere.

As part of the licensing conditions, bike sharing companies have to "right-size" their fleet to prevent an over supply, and implement a QR code parking system to ensure that users park their shared bikes in designated places.

The first casualty of this licensing regime was oBike, who ceased operations on June 25, 2018, citing “difficulties foreseen to be experienced to fulfil the new requirements and guidelines released by Land Transport Authority (LTA)”. Its departure sparked anger among users as many had unreturned deposits stuck with the company.

Previously when ofo received its licence to operate here, the LTA allowed it to maintain a maximum fleet size of 250,000 bicycles. However, the company requested for the agency to cut it down by 60% to 100,000 because maintaining 250,000 was too expensive for it.

Full licensees such as ofo need to pay S$60 per bicycle to LTA. Out of that S$60, S$30 covers the annual licence fee, while the remaining S$30 is a two-year refundable security deposit.

It seems that ofo's financial problems are far worse than it initially thought.

LTA has given ofo until February 13 to meet all regulatory requirements or else the agency will suspend its licence.

You can read LTA's full statement below:

Top image by Joshua Lee.