Singaporean-based startup oBike leaving Melbourne after just one year of operation, quitting the city rather than deal with a range of fines introduced by Victoria’s Environment Protection Authority (EPA) if the company failed to collect dumped or damaged bikes within a day or two of being told where they are.
With the new rules due to come into place today, which gave the company deadlines of between two hours and a week to collect bikes, depending on where they were left or dumped, or face a $3000 fine per bike, the company told the City of Melbourne yesterday that it was leaving town.
The company did not respond to requests for comment from Business Insider.
The dockless bicycle phenomenon began in Australia in June last year with oBike in Melbourne, then spread to Sydney two months later. There are now four operators in the NSW capital including Australian-based ReddyGo and two Chinese companies, Ofo and Mobike.
Mobike has plans to launch in Melbourne.
But the issue of bicycles left littering streets or dumped in trees and waterways has vexed local councils, which have been seeking greater powers to deal with the issue.
In April, the Yarra Riverkeeper Association said it picked 78 oBikes out of the river in one week and even found an oyster on one.
Victorian EPA CEO Nial Finegan said the bikes are “annoying the community and damaging the liveability of this city”.
The swingeing penalties from the EPA, announced a fortnight ago, dramatically changed the economics of the share bike business model, which seemed prepared to endure high loss rates until now.
The new rules required the share bike business to produce a management plan for abandoned and damaged oBikes, as well as a publicity plan, by today, June 13, or face a fine of $3,171.40 per week for any delay.
Just 24 hours before that deadline hit, the business decided to pull the pin instead. June 14 would have marked 12 months since oBike pioneered share bikes in Australia.
The company has not made any public statements on social media about its withdrawal from Melbourne and continues to operate in Sydney and Adelaide.
Last week it announced a rewards program for people who parked the bikes “responsibly at designated parking spots” after using them, having introduced a penalty system on June 5 for “indiscriminate parking”, that included “possible higher ride charges for your next ride”.
City of Melbourne says it was working with oBike to remove any remaining bikes and recommended people stop using them.
The council said the company had not provided a reason for leaving.
We’re great supporters of bikes & cycling. @AustraliaObike have temporarily withdrawn from Melbourne.We're working closely with them to remove the remaining oBikes. We recommend people stop using @AustraliaObike & have asked the company to switch off their booking facility. 1/2 pic.twitter.com/Zbgj3CbfbA
— City of Melbourne (@cityofmelbourne) June 12, 2018
In the meantime, concerns are growing about the $69 deposit users had to pay when signing up for the service. The company’s rules state the refund can take up to 30 days.
On Facebook yesterday, one customer wrote “I logged into my account today to refund my deposit only to discover that my deposit has been used for an SVIP membership that I did not consent to. Please refund my deposit ASAP.”
Another, who said they emailed twice about a refund “requested on 18/04/18” messaged oBike again, nearly two months later, asking when the money would be returned.
Complaints about refunds on the oBike deposit appear regularly on social media.
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