The mechanical lock of ofo has long been a major issue. As reported by Interface News on July 21, on March 26, 2017, an 11-year-old boy from Tianyi Road in Shanghai collided with a passenger car while using a shared bicycle and got caught under the vehicle. This marked the first case of a minor under 12 years of age using a shared bicycle in Shanghai. On July 19th, the boy's parents filed a lawsuit in the Jing'an District People's Court of Shanghai, demanding 8.78 million yuan in compensation and requesting that the company immediately remove all mechanical code locks and replace them with safer alternatives.
On June 18 of this year, another accident involving a minor occurred in Zhengzhou, Henan Province. The boy, aged 12 or 13, managed to crack the password of the Xiao Huang car's mechanical lock. While riding downhill, he lost control due to excessive speed and was injured. This incident once again raised concerns over the mechanical locks on shared bikes.
According to the plaintiff's lawyer, Zhang Yulin, a senior partner at Shanghai Dabang Law Firm, on March 26, 2017, at around 1:37 PM, the boy and three friends (all underage) were riding an ofo bicycle at the intersection of Tianyi Road, Qufu Road, and Zhejiang North Road when they collided with a bus from Shanghai Hongmao Car Rental Co., Ltd. The boy fell to the ground and was run over by the bus. Despite being rushed to Shanghai Changzheng Hospital, he passed away on the same day.
The Jing'an District Traffic Police determined that the boy was under 12 years old, riding against traffic, and failed to observe road conditions, thus bearing responsibility for the accident. Lawyer Zhang Yulin argued that the accident was caused by the victim being under 12 years old, and ofo neglected to warn users against underage riders. The mechanical lock on the vehicle posed a significant safety hazard.
The vulnerability of ofo's mechanical lock to children seemed to be widely recognized.
In response to the incident, ofo released an official statement on the morning of March 28, promising to establish an effective preventive mechanism to prevent minors under 12 from using bicycles. The company also stated that it planned to launch a new smart lock with dynamic passwords to address these issues.
However, on June 18, a similar incident occurred in Zhengzhou, where a 12 or 13-year-old boy managed to crack the Xiao Huang car's mechanical lock. During a downhill ride, he lost control and suffered injuries.
In the Shanghai case, the plaintiff not only demanded a total compensation of 8.78 million yuan for death and mental damages but also requested the court to order ofo Xiao Huang to immediately recall all mechanical code locks and replace them with locks that children cannot easily open after use.
On June 19, the "golden masters" of the "yellow oranges" were clashing publicly.
On June 27, Zhu Xiaohu, an investor in ofo, stated during a speech at an economic summit: "In the end, whether it's called the sharing economy or leasing business, we don't care."
According to reports from Orange Capital, Zhu Xiaohu mentioned:
When discussing the sharing economy, some investors said that starting last year, the Chinese internet was dominated by stories of two bicycles. The business models of shared bikes and shared treasures are essentially the same.
Some media outlets claimed that we dressed up the rental business as a shared economy to make money. Not only did Chinese media say this, but American media also echoed similar sentiments, going so far as to exaggerate, suggesting that Chinese entrepreneurs and investors had misrepresented the sharing economy in a glamorous light.
To be honest, we never really thought about what this business model should be called. Whether it's called the sharing economy or leasing business, we didn't care either.
What about the $700 million funding round for ofo? The founder said: Expansion.
On July 10, ofo completed a $700 million Series E round of financing.
Dai Wei, founder and CEO of ofo, said: "ofo is committed to providing convenient, efficient, green, and healthy travel services for users worldwide. In the future, we will further enhance the user experience and accelerate our global strategic layout. We will continue to lead the development of the shared bicycle industry. According to ofo data, by the end of 2017, ofo plans to deploy 20 million bikes, serve 200 cities globally, and enter 20 countries and regions."
This is quite clear: the primary purpose of this funding is expansion.
According to Yifan Qianfan data, the number of active users of the ofo shared bicycle app has grown exponentially since 2017. Particularly after ofo completed a $450 million D-round of financing in March, by May, the Monthly Active Users (MAU) exceeded 25 million. Clearly, ofo's scale expansion strategy has yielded significant results. Following the completion of this round of financing, ofo decided to continue its expansion strategy.
In an interview with Xinhua Viewpoint, Zhang Ding, founder of ofo, also stated that he would continue to expand after securing funding.
Reporter: At the beginning of this month, ofo completed a new round of $700 million in financing. What will this funding be used for? Recently, capital has been invested in the field of shared bicycles. Do you think this is rational?
Zhang Xiaoding: This is very interesting. Capital is very "smart" and is willing to enter the field of shared bicycles because it sees a clear business model and can actually make profits through riding fees. Just as we were not optimistic about many investment institutions in the early days, it was considered that the business was whimsical and did not fall because it was unclear at that time. With the help of capital, we are doing two expansions.
First, expanding the scope of business and gradually replicating operations, extending to third-tier cities and overseas markets. Second, attracting outstanding talent and technology. We need capital to help us find better and more potential people worldwide.
Reporter: Besides financing, ofo raised the deposit from 99 yuan to 199 yuan. Why was this adjustment made at this time? How will the large deposits generated by a large number of users be used?
Zhang Xiaoding: In fact, when we were designing the overall plan, the deposit was tiered. Currently, in addition to raising the deposit from 99 yuan to 199 yuan, we have also designed a 299-yuan deposit and authorized deposits via Sesame Credit. Through various methods, we are comparing different data points to better understand user deposit requirements.
The ofo's IoT smart lock-equipped bike has been compromised by user experience issues.
According to reports from the Huaxia Times, on June 20th, ofo increased its user deposits from 99 yuan to 199 yuan. That evening, ofo announced the official application of its "IoT smart lock." Later that night, ofo also announced that the world's first shared bicycle NB-IoT "IoT smart lock," jointly developed with China Telecom and Huawei, was officially applied to ofo. On the same day, ofo's new user deposit rose from 99 yuan to 199 yuan.
From the perspective of social media user feedback, people have little affection for the ofo yellow cars equipped with electronic locks. Many users said that although the new yellow cars have increased the number of electronic locks and improved vehicle conditions, the riding experience has been reduced. "It takes a lot of effort to ride around."
The new ofo cars are difficult to ride, and users' focus is on vehicle resistance. Moreover, according to user feedback, this situation is not accidental but occurs across all ofo bikes equipped with electronic locks. Furthermore, users generally report that the ofo electronic lock is very tiring even at low speeds, leading to a poor riding experience.
Clearly, under the pressure of internal and external demands to replace the small yellow bikes with online electronic locks, it is unlikely to solve problems like riding resistance and Other issues affecting the user's riding experience. Ultimately, there may not be a new product "opener," but rather users will remain in doubt.
According to analysts, the ofo's electronic locks are very heavy, and the electronic version of the frame weighs nearly 50%. Due to the lack of patented technology, compared to Mobicycle's high-efficiency electronic transmission system, ofo's traditional system with electronic locks has quite a bit of resistance. Under these combined factors, it is not surprising that users questioned "difficulty riding."
According to the 21st Century Business Herald, ofo's operational maintenance costs are almost a dozen times those of other bicycles. Although the cost of vehicles is low, management becomes uncontrollable as the number of vehicles increases. "Zhu Xiaohu said that sharing bicycles will end in six months. This is impossible. Ofo is difficult to form a closed loop, and most of the orders do not receive payment. Additionally, it lacks data and financial沉淀, which are inherent defects of the model."
Source: Interface News, China Times, 21st Century Business Herald, Xinhua Viewpoint, Analysis.
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