The case of Yueqi Information Technology Co., operator of bike-sharing platform Xiaoming Bike, defaulting on user deposits is the first public interest litigation involving shared bikes, and the first case of a domestic bike-sharing company going bust. It provides a positive reference for other consumer watchdog groups to pursue public interest litigation to help consumers with the return of lost deposits. The case has also prompted the relevant authorities to either put pressure on bike-sharing enterprises to cancel user deposits or more effectively regulate the bank accounts used for deposits to guard against future problems.

The company’s assets were insufficient to repay user deposits, while its bikes were expensive to recycle, with many becoming second-hand or waste assets of low value. To send a message to other bike-sharing companies and prevent similar cases, Xiaoming Bike’s operators should be charged for embezzlement and prohibited from business activities.

Summoning or refunding the more than 100,000 creditors across China who were involved in the case has been a major challenge for the judicial system, and a waste of limited judicial resources that should not be repeated.

Society has thus far treated the sharing economy, including bike-sharing, with tolerance and prudence. Although it is reasonable for relevant sectors unfamiliar with this newly emerging form of business to relax regulation, the law must be upheld and operators prevented from encroaching on the legitimate rights of consumers.

(This is an edited excerpt of an article published in People’s Daily on July 13)