When The 'Sharing Economy' Turns Into The 'Missing Or Stolen Economy'

from the anybody-seen-my-300,000-umbrellas-lying-around? dept

Mon, Jul 17th 2017 6:34pm — Glyn Moody

The sharing economy -- actually better-described as a rental economy -- is very much in vogue, inspired by the high-profile examples of Airbnb and Uber. But Western enthusiasm pales in comparison to that of Chinese entrepreneurs, who seem to have taken the view that the model will work for anything. For example, alongside the companies that rent out homes and cars, there are now some that will let you pick up an umbrella in a public spot, use it for a short while, and then return it. At least, that's the theory. But the South China Morning Post reports that the Sharing E Umbrella startup ran into a few problems:

Just weeks after making 300,000 brollies available to the public via a rental scheme, Sharing E Umbrella announced that most of them had gone missing, news website Thepaper.cn reported on Thursday.

The company was launched back in April, and is operating in 11 Chinese cities. Customers borrow umbrellas after paying a deposit of about $3, and a fee of 10 cents for every 30 minutes. Undeterred by the fact that each missing umbrella represents a loss of $9, the company's founder says he hopes to proceed on a larger scale by making 30 million of them available across the country by the end of the year. Here's why he's convinced he's on to a winner:

After seeing the launch of bike-sharing schemes across the country, the Shenzhen-based businessman said he "thought that everything on the street can now be shared".

Perhaps he should have waited a little before modelling his business on bike sharing. Caixin reported last month that Wukong, one of the smaller players in this crowded market, has just closed down -- after most of its bikes went missing:

Wukong operated its 1,200 bikes in the southwestern city of Chongqing. But most of the bikes were lost because the firm didn't embed GPS devices in the vehicles. By the time the company decided the devices were necessary, it had run out of money and failed to raise more

Wukong isn't the only rental company that lost track of most of its bikes, as Shanghaiist.com notes:

Wu Shenghua founded Beijing-based 3Vbike in February, using 600,000 RMB ($89,000) of his own money to purchase the first 1,000 bikes. But only four months later, he told the Legal Evening News that there were only dozens left.

Despite those failures, money continues to pour into the Chinese bicycle rental sector: last month, one of the leading startups, Mobike, announced $600 million in new funding, which it will use it to expand outside China. Let's hope people there remember to bring the bikes back.

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Filed Under: bikes, cars, china, sharing economy, theft, tracking

33 Comments

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Bergman (profile), 17 Jul 2017 @ 6:55pm

This is why rental places demand a credit card
If you pay $3 for an umbrella and owe $0.10 for every 30 minutes you used it, there's a strong incentive to never return it, if you paid that $3 in cash.

But if you swiped a credit card to pay for the umbrella, you better believe you have an incentive to return it the moment you don't need it anymore.

The former lets you steal an umbrella for $3 with almost no consequences. The latter could wind up costing you enough to buy hundreds of umbrellas if you 'forget' to return one.

In a city with lots of thieves, the latter business model could actually make the company a tidy profit on every umbrella that gets 'lost'.
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TechDescartes (profile), 17 Jul 2017 @ 6:58pm

Tread Carefully

After seeing the launch of bike-sharing schemes across the country, the Shenzhen-based businessman said he "thought that everything on the street can now be shared".

I think he spoke too soon. Before he knows it, he'll be re-tired.
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Anonymous Coward, 17 Jul 2017 @ 7:05pm

Re: This is why rental places demand a credit card
On the other side of the equation, now that you have their credit card information, that too is something that can be sold...
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Anonymous Coward, 17 Jul 2017 @ 7:45pm

Re: Re: This is why rental places demand a credit card
what about using a reputable CC system would allow you to report them for theft of service.
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Christenson, 17 Jul 2017 @ 8:27pm

Contract enforcement
As noted, a $3 deposit for a $9 umbrella is a good deal...if there are no further consequences to not returning the umbrella!

The gentleman should have charged a twelve dollar deposit...and if people wanted to buy umbrellas that way, well, he'd still be in business.
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Anonymous Coward, 17 Jul 2017 @ 8:32pm

Re: Contract enforcement
They'd probably never rent them in the first place and he'd still be out of business.
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Toom1275 (profile), 17 Jul 2017 @ 8:33pm

Re: Contract enforcement
Charge $12, then refund $9 on a verified return of the umbrella. It gets lost? Replacement's paid for and then some. Umbrellas are returned? As long as they last more than 3 outings before being trashed, there's the profit.
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Bergman (profile), 17 Jul 2017 @ 9:27pm

Re: Re: Re: This is why rental places demand a credit card
Not a great idea. If someone rents a $10 umbrella for $3, and then doesn't pay the $0.20 per hour fee, then in less than two days you'll have made a profit on the umbrella even though it is stolen. Given a few weeks, you could make more money off that one stolen umbrella than you do off the ones that are rented and returned.

But if you have them arrested early on the second day for theft, you make about $7.80 and then the money stops rolling in because you got your umbrella back.
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Bergman (profile), 17 Jul 2017 @ 9:29pm

Re: Re: Contract enforcement
Better still, make the transaction card-only and charge $3 up front and $0.20 per hour after the first hour. The guy who pays $3 then 'steals' his umbrella ($9 value) and keeps it for a year just gave you $870 in profit!
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Hugh Jasohl (profile), 17 Jul 2017 @ 10:23pm

Re: Re: Re: Re: This is why rental places demand a credit card
Wait a year and send them a threatening letter demanding the full amount or they will notify authorities. Some will pay it all, others will settle for a small percent. Profits all around even though theft was inevitable.
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frank87 (profile), 18 Jul 2017 @ 3:26am

That's why airbnb and uber rent out other people's stuff.
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stderric (profile), 18 Jul 2017 @ 3:55am

So... Chinese businessmen are, in effect, gradually giving everyone on the planet a free bicycle? What are they, a bunch of commies?
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Anonymous Coward, 18 Jul 2017 @ 4:17am

A similar bike scheme has been launched by a Chinese company in Manchester, UK - its going about as well as you'd expect...

On a completely unrelated note, anyone after a new bike - I know a guy who's got a few for sale?
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Ninja (profile), 18 Jul 2017 @ 6:39am

There's a cultural component that must be evaluated. In some countries you can leave your phone, notebook, bike, whatever unattended and unlocked and nobody will touch them. You can sell products by placing the price and leaving a pile of said product there and people will mostly leave the money and take the product. Developed societies, civilizations where people have decided collective welfare is important and they pursue it. That's clearly not the case in China. Or here. Or in a good portion of the world.
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Anonymous Coward, 18 Jul 2017 @ 7:01am

I was unaware there was such an umbrella problem in China.
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stderric (profile), 18 Jul 2017 @ 7:37am

Re:
How uninformed are you? You live in a cave? All you have to do is turn on the news once in a while! Two. Damn. Minutes. All you need.
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Anonymous Coward, 18 Jul 2017 @ 8:28am

Re: Re: Contract enforcement

They'd probably never rent them in the first place and he'd still be out of business.

The deposit at the local ice-skate rental place is large enough to cover replacement (at wholesale cost) and they have lots of customers. I don't know about umbrellas. That's a weird thing to rent--the cost isn't prohibitive and it's not really something one needs to "try out" first.
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JoeCool (profile), 18 Jul 2017 @ 10:53am

Re: Re:
Yeah! Didn't you see the story about how Chinese air is so polluted that acid rain is dissolving people like the bad guy in Raiders of the Lost Ark?
:)
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Bergman (profile), 18 Jul 2017 @ 12:31pm

Re: Re: Re: Re: Re: This is why rental places demand a credit card
If the rental requires the swipe of a credit or debit card, than as long as that card remains valid, the payments are automatic. No need for a nastygram after a year, just take your $4.80 a day and be done with it.

Pointing out that petty theft is a crime would only be a good sense option if the person tried to contest the bill.
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Bergman (profile), 18 Jul 2017 @ 12:33pm

Re:
People in China spit out of windows. A LOT. It's some weird cultural thing. Walking down the street causes you to get spat upon regularly.

There are good reasons why everybody uses an umbrella.
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orbitalinsertion (profile), 18 Jul 2017 @ 9:54pm

Re:
That is actually why i was half expecting the article to be about someone renting out stuff they had stolen, or space in homes where people are on vacation or the property is between occupants, or someone stealing cars then operating them as a ride service.
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Anonymous Coward, 19 Jul 2017 @ 6:23am

Re: This is why rental places demand a credit card
Hotels don't demand a credit card. There is something called trust and you shouldn't transfer yours to a third party.

"but if you swiped a credit card"....what an idiot...There is literally billions that don't have access to a credit card.

Yes we know, in your crazy world you would love everyone to be under the bank's leash.
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Anonymous Coward, 19 Jul 2017 @ 6:26am

Re: This is why rental places demand a credit card
In a city with lots of thieves...what a moron, there is no bigger thieves than the USA, many of its citizens are thieving the world. Your stupid generalizations serve no purpose but just a propaganda.
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Anonymous Coward, 19 Jul 2017 @ 6:29am

Re: Re: Re: Re: Re: Re: This is why rental places demand a credit card
LOL, what an ignorant comment, require a credit card and see who starts renting your umbrellas you fool. Why did the owner didn't do that in the first place? Yes we know, because only you could have ever thought about that one.
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Anonymous Coward, 19 Jul 2017 @ 6:32am

Re: Contract enforcement
Lets remember something, those $9 for the umbrella is the alleged price.
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Anonymous Coward, 19 Jul 2017 @ 6:33am

Re:
No, are bunch of communists live in America, where they love to give free food stamps, free health care and etc to their population, that is commie.
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Anonymous Coward, 19 Jul 2017 @ 6:37am

Re:
"There's a cultural component that must be evaluated. In some countries you can leave your phone..."

Complete bullshit. So what you are saying? that there are some cultures more prone to thievery than others? That is ridiculous, ignorant and a complete load of horseshit. People steal things in all countries all the time. The biggest thieve of them all is the USA government with all its interventions to "save people" (in exchange of their oil of course).
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Anonymous Coward, 19 Jul 2017 @ 6:39am

Re: Re:
Well, there is still people unaware that America is an oligarchy and that there is no true democracy there. Millions live on food stamps, live below the poverty line and have no health care. Many still believe voting for one or the other color is going to change anything.
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Anonymous Coward, 19 Jul 2017 @ 6:40am

Re: Re: Re:
LOL..or the movie where America supposedly won the Vietnam war.
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Anonymous Coward, 19 Jul 2017 @ 6:42am

Re: Re: Re:
Or the movie where an idiot american starts killing american citizens and then committing suicide...oh shit wait, that was no movie, that was (and is, sadly, continuously) the news.
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Anonymous Coward, 19 Jul 2017 @ 6:43am

Re: Re:
"A LOT"

Again with stupid generalizations. Proof or GTFO.
How about Americans kill a lot of Americans.
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Anonymous Coward, 19 Jul 2017 @ 6:44am

Re: Re:
"There are good reasons why everybody uses an umbrella."

Because it is raining.

There is good reasons why millions are protesting again the poisoned water in America, from Flint all the way to the south border.
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Christenson, 19 Jul 2017 @ 6:07pm

Re: Re: Re: Contract enforcement
What kind of math is that? Copyright math? Collecting that $870 is gonna be about as easy as collecting a large library fine!
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