Sharing Economy Bubble Bursts

Since 2014, China’s sharing economy has been growing wildly particularly in the bike and car sharing industry. According to a report by KPMG, a consultancy, China’s venture capital investments hit US$31 billion in 2016, the majority invested in the sharing economy. Starting from 2017, however, the sharing economy has met unprecedented challenges. About 10 million users of Ofo, a leading bike sharing company in Beijing, are waiting for refunds of their deposit money. Following the spate of murder and rape cases by drivers on the hitch service offered by China’s ride-hailing giant Didi Chuxing, the government has taken stringent safety measures to regulate the market. A saturated market, chaotic regulations and vicious competition have contributed to the burst bubble in the sharing economy.