China’s Phoenix takes Ofo to court for £8 million manufacturing bill and breach of contract
120-year-old bike maker sues dockless firm for massive debt and no-show order for three million bikes
Carlton Reid14 hours ago
Dockless bike share firm Ofo is being sued by the manufacturer of 1.8 million of its bicycles. In a court case filed yesterday bike maker Shanghai Phoenix Bicycles claims it is owed £7.9 million in manufacturing fees and is also suing for a breach of contract after a promised order of three million bicycles failed to materialise this year.
Ofo was founded in 2014 by five members of the Peking University cycling club and has expanded rapidly around the world. In 2017, the Beijing-based firm had deployed over ten million bicycles in 250 cities and 20 countries. Cash injections from Chinese tech firms Xiaomi and Didi Chuxing saw the company valued at up to $2 billion last year, with the firm later bankrolled by the cash-rich Alibaba, China’s Amazon.
However, Ofo has been pulling out of smaller UK cities – such as Norwich – and has removed its bikes from some countries altogether, including India.
Rumours have been rife in the bike share world that Ofo has been suffering cash-flow problems because of its global expansion.
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