ofo pioneered bike-sharing in China — then couldn't return users' deposits

ofo, founded in 2014 by Dai Wei, pioneered dockless bike-sharing in China — bicycles that could be rented by the minute and left anywhere, unlocked with a smartphone app. The idea was a sensation, and ofo raised billions of dollars from investors as it and rival Mobike fought a fierce subsidy war, flooding Chinese cities with cheap, often free, rides.

But the business model depended on continuous funding and user deposits, and the subsidy war burned cash at an unsustainable rate. Bikes were vandalized, piled up in junkyards, and left to rust. When the funding dried up, ofo ran out of money, and it could not return the deposits that millions of users had paid to rent its bikes.

By 2018-2019, ofo had effectively collapsed. Millions of users were left waiting in a refund queue that stretched into the millions, many never getting their deposits back. Mobike was sold to Meituan, but ofo, whose founder refused to sell or merge, faded into a cautionary tale about the dangers of growth-at-all-costs and a business model built on subsidies and deposits it could not repay.

Subsidized rides with deposits and investor cash until funding dried up, leaving millions of users waiting for refunds that never came.

ofo pioneered dockless bike-sharing and raised billions, but its business model depended on continuous funding and user deposits.

A fierce subsidy war with Mobike burned cash at an unsustainable rate, and bikes were vandalized and left to rust.

When the funding dried up, ofo ran out of money and could not return the deposits that millions of users had paid.

Founder Dai Wei refused to sell or merge, and ofo faded, leaving millions of users waiting for refunds they never received.

Growth funded by burning cash and holding user deposits is not a business — it is a bet that the funding never stops. When it does, the users who trusted you with their money hold the loss.

ofo's collapse was one of the most prominent failures of China's bike-sharing boom, a cautionary tale about growth-at-all-costs and business models built on subsidies and user deposits. Millions of users were left waiting for deposit refunds they never received, and the image of bike graveyards became a symbol of the bubble. The lesson is durable: a company that grows by burning cash and holding user deposits is only as stable as its funding, and when the money runs out, the cost falls on the users who trusted it — a lesson that applies far beyond bike-sharing.