LTA primed to cancel ofo's operating licence after it misses deadline extension to clear bikes
CORRECTION: An earlier version of this story stated that the Land Transport Authority (LTA) has cancelled ofo’s operating license. This is incorrect. LTA has issued a Notice of Intention to cancel the license. ofo has been given up to 14 days to appeal the decision.
The Land Transport Authority (LTA) is set to cancel Chinese bike-sharing firm ofo’s licence to operate in Singapore, after ofo failed to remove all its bicycles from public places despite getting a deadline extension, said the agency on Wednesday (3 April)
The firm had originally had its operating licence suspended on 14 February for failing to meet LTA’s regulatory requirements. It was told that the licence would be cancelled if it failed to remove all its bicycles by 13 March.
It was then granted a stay of execution by LTA, which extended the deadline to remove the bikes till 28 Match. However, ofo has still not complied with its requirements.
Not complied despite deadline extension
In response to media queries, LTA released a statement on Wednesday that said, “LTA suspended ofo’s licence on 14 February as ofo had failed to comply with regulatory requirements, such as the implementation of a QR code parking system. ofo was required to remove all its bicycles from public places by 13 March.
“After ofo informed LTA that it was in advanced stages of negotiations to partner another party to resume operations and fulfil the conditions of its licence, LTA extended the deadline for bicycle removal to 28 March.
“Despite the deadline extension, ofo has not complied.
“Since ofo is not able to comply with regulatory requirements, on 3 April, LTA issued ofo a Notice of Intention to cancel ofo’s licence. It has up to 14 days to make written representations to LTA.”
Unlicensed operators can face a fine of up to $10,000 and/or a jail term of up to six months, with a further fine of $500 for each day the offence continues after conviction.
‘Immense’ cashflow problems
Citing a former employee, The Straits Times reported that Ofo has been operating in Singapore since early 2017, with more than 90,000 bikes deployed here. It was the largest bike-sharing company in the world, and had a reported 10 million bikes in over 250 cities in 2018.
However, reports emerged late last year that it was battling “immense” cashflow problems and that it had considered disbanding as an option.
In December 2018, ofo chief executive Dai Wei told employees that the firm was considering filing for bankruptcy. In Singapore, ofo has vacated its Shenton Way premises.
Two companies granted dock-less bike-sharing licences
Meanwhile, LTA has given in-principle approval to two companies – Anywheel and Moov Technology – for licences to operate dock-less bicycle-sharing services in public places.
Anywheel was upgraded from its original sandbox license, which allowed it to operate up to 1,000 bicycles, to a full bicycle-sharing operator (BSO) licence for up to 10,000 bicycles.
Moov Technology, a newcomer, will be granted a sandbox licence to operate up to 1,000 bicycles.
A third applicant, Ywise Circle, was unsuccessful in its application as LTA has assessed that it did not meet the evaluation criteria, which includes the applicant’s proposal to manage indiscriminate parking, its financial strength and track record, if applicable.
Operators who have been granted sandbox and full licences for device-sharing services will be allowed to operate in public places for one year and two years respectively.
Separately, LTA also said that the decision on personal mobility device-sharing (PMD-sharing) licence applications will be announced by mid-2019. More time is needed to evaluate this first licence application cycle for PMD-sharing activities, which involve new activities such as the charging of shared devices that are not present in bicycle-sharing services.
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