SINGAPORE, Dec 27 — At least two companies here have sent letters of demand to beleaguered bike-sharing firm Ofo to claw back money owed for logistic services, TODAY has learnt.
The two local vendors have not been paid for their services for at least three months, with the unpaid sums totalling over S$700,000 (RM2.12 million).
Staff in Ofo’s Singapore office are also owed thousands of dollars in unpaid transport and mobile phone claims accumulated over more than six months, TODAY understands.
With the China-based firm — which is backed by conglomerate Alibaba Group — battling cash-flow problems and dealing with irate customers in China demanding refunds of their deposits, current and former employees of its Singapore office and vendors said that trouble is also brewing here.
Logistics company SB Express, which provided more than 10 lorries to Ofo from May to November this year to transport the bicycles, confirmed today that Ofo owes the firm between S$500,000 and S$600,000 in unpaid invoices.
SB Express is also seeking payment of at least S$40,000 for services provided in April to Winning Logistics — a global logistics firm hired directly by Ofo’s Beijing office — which outsourced its Singapore operations to SB Express.
Sebastian Lee, SB Express’ managing director, told TODAY that he has been chasing Ofo for payment but to no avail. The company’s lawyers sent a letter of demand to Ofo in December.
“Email them no reply, call them over the phone never pick up… They keep dragging”, he said.
Lee said he spoke to Ofo Singapore’s acting general manager Jack Zhou in November, with the latter saying that he is waiting for instructions from Beijing.
Another local logistics firm that has been in operation for over 30 years is also threatening legal action against Ofo.
Kelvin Cheong, its chief executive officer who did not want the firm to be named, told TODAY that it is owed a total of S$174,000.
His company started supplying seven lorries to Ofo in April, but stopped its services last month due to arrears owed since September.
He has also run into issues trying to get Ofo to pay up. Cheong added: “They just say the funds are coming in next week. Every Friday, they will say it’s coming in next week. But they won’t tell you how much they are going to pay.”
He claimed that Zhou told him at the end of November that Ofo would pay him S$10,000.
A third company involved in the recruitment of 200 bike marshals for Ofo’s operations team is also demanding payment, TODAY has learnt. These temporary staff were mainly used to redeploy Ofo’s bicycles and deal with errant parking, and the recruitment firm terminated its services in November.
Frustrated with the situation, Cheong said the vendors are considering filing a report with the Police’s Commercial Affairs Department.
‘Things look shaky’
When TODAY visited Ofo’s registered office address at AXA Tower in Shenton Way last week, an employee of co-working space operator JustCo said that Ofo had moved out at the end of November, a month before its lease was up.
JustCo was unable to provide details on why Ofo had moved out of its working space.
Former and current Ofo employees told TODAY that the firm owes them thousands of dollars in claims for transport, mobile phone, warehouse tools and team-building meals, among others.
They also pointed out that Ofo Singapore’s staff strength has shrunk from over 100 a year ago to about 15 currently.
Speaking on condition of anonymity, a former employee said the company owes him S$5,000 in claims, while one staff member has not been reimbursed for his claims of over S$1,500 for more than six months.
The former staff said the claims were approved by the former country general manager, but they were told in November after Zhou was appointed acting general manager that the Beijing office would not recognise these claims.
Central Provident Fund (CPF) payments by Ofo to staff have also been late on at least three occasions over the past year, said a staff member.
With the situation rapidly escalating in China, those who are still employed at Ofo are concerned about their jobs, as one employee said that “things look shaky” and he is “not optimistic” about the firm’s future.
While monthly salaries have been paid so far, they said the company could not promise that they would be paid this month when questions were posed to management.
“They cannot give us a guarantee, said ‘you just wait and see’. What is this nonsense,” said one staff member.
TODAY has reached out to Zhou for comments, and was referred to the firm’s public relations officer in Beijing.
Once a tech start-up darling in China, Ofo attracted major funding from Chinese and international investors and had been valued at over US$2 billion. But a costly battle with rival Mobike eroded its ability to make payments to suppliers, and its chief executive and founder Dai Wei said in a letter to employees this month that the Alibaba Group-backed firm is facing “immense” cash-flow problems and disbanding the firm has been considered as an option.
Close to 12 million customers in China are demanding refunds of their deposits, adding to their financial woes. Over the weekend, Dai was also put on a Chinese government blacklist for defaulting on debts.
Ofo Singapore’s Facebook page has also been inundated with comments from users, who claimed that their refund requests have gone unanswered.
Ofo is not the first bike-sharing company here to land itself in hot soup. In June this year, oBike announced its shock exit from the Singapore market, citing difficulties in meeting the Land Transport Authority’s (LTA) rules tackling indiscriminate parking under a new licensing regime.
Since then, oBike users have tried unsuccessfully to get their deposits returned and vendors have also not been paid monies owed to them.
When contacted by TODAY, the LTA referred to its earlier statement in October which said that six bike-sharing firms here were granted permits on Sept 28 and had paid for their licences.
Originally granted a fleet of 25,000 bikes under the licensing scheme, Ofo had made the request to LTA — which was granted — to reduce that number to 10,000 due to difficulties meeting its financial obligations for the original fleet size. — TODAY
