Mobike, ofo deny rumors, reports that they face financial pressure

Mobike and ofo, China’s leading bike-sharing service providers, on Thursday denied that they face any cash strains despite recent rumors to the contrary.

Mobike said that rumors about the bike-sharing company being short of cash “do not align with the facts,” according to a statement it sent to the Global Times on Thursday.

"Mobike will use legal means to protect its rights concerning the rumors and protect itself against malicious slander circulating on the Internet," the company noted in the statement.

Mobike also noted that, since its founding, the company has attached great importance to guaranteeing the safety of its users' returnable deposits. "We make sure that our users can get their deposits back any time they want," the company noted.

Ofo also stressed to the Global Times on Thursday that the company's businesses are "operating in an orderly manner."

"Since its founding, the company has strictly guaranteed the safety of customer deposits and set up a very smooth, convenient deposit-returning process. Nowadays, customers can easily get their deposits back via ofo's app and customer service number," the statement noted.

A report by lanjingtmt.com on Thursday cited "internal sources" as saying that both Mobike and Ofo, China's two largest ridesharing companies, are under financial pressure.

The report alleged that the two had started using customers' deposits amounting to 6 billion yuan ($908 million) to make up for cash shortages. Besides that, they have also reportedly halted payment to suppliers such as bicycle factories and their PR firms.

A report from sina.com.cn noted on Thursday that many users are applying to get their deposit back despite the companies' clarification.

There have been repeated complaints from customers recently that they can't get deposits back from ride-sharing companies like Xiaoming Danche and Xiaolan Danche.

The lanjingtmt.com report said ofo’s and Mobike's financial troubles are a result of their rising costs for maintenance, buying bicycles and other items. For example, Mobike has spent more than 10 billion yuan to procure bicycles alone, the report noted.