Why is the OFO Bike Deposit so Hard to Refund?

Recently, OFO Bike deposit refunds have given rise to intensive public attention. As of December 24, 2018, the number of people who have applied for a refund of the deposit at OFO has exceeded 13 million and this number is rapidly increasing. According to the “refund in order” rule, a large number of users who have applied for the deposit refund will face a long waiting time.

The shared bicycle deposit is different from deposits in general rental relationships. Normally, the termination of the lease relationship means that the lessor should return the deposit to the lessee. For example, under the house renting scenario, when you terminate the lease relationship with the landlord, the landlord needs to immediately return the rental deposit to you.

However, in the case of shared bicycles, most users will not apply for a refund of their deposit at the end of each ride. Instead, users typically choose to save their deposit in their account in order to continue using shared bicycles in the future.

As a new business model, the legislative rules are not well established for shared bicycles. From the existing legal system, the current use and return mode of the deposit is not necessarily illegal; however, in the case of a collective refund, users are exposed to the risk of refund failure/delay due to the break of the capital chain.

The law generally lags behind practice, which requires more active and inclusive laws to regulate new business models.