The bike-sharing wars have claimed their first company casualty. Wukong Bike, a local firm in the city of Chongqing, closed down after having nearly 90 percent of its bikes lost or stolen. Wukong was a relatively minor player, operating only in Chongqing and targeting students, and funded by the Chongqing Zhan'guo Technology Co. Ltd; it lasted only five months, and has promised a full refund to all investors and users within 30 days.
Tan Haojun, a commentator at news site
china.com.cn, suggested that Wukong Bike's withdrawal probably suggests the bike-sharing market is heading toward a new phase of developmentl. Over the past few months shared bikes have had negative effects on social order, she noted, causing problems such as careless parking or malicious damage. As a result local governments are already considering restrictions on their use.
The case is also a good example of the "Matthew Effect," where stronger players get even stronger. Lei Houyi, founder of Wukong Bike, noted that strong companies with a constant flow of capital and plenty of support from the government and media always dominate the market and force out weaker players. Given this imbalance, Tan warned, the government needs to regulate this industry and companies without solid capital must be careful.
Old Version
