Shanghai Phoenix Bicycles, one of China’s leading bike manufacturers, is suing bike-share startup Ofo for allegedly owing the company $10 million in unpaid bills, the Financial Times reports.
The move is another sign that the cut-throat competition in the Chinese bike-share industry is starting to take its toll on Ofo and its competitor Mobike, which was acquired by tech giant Meituan-Dianping earlier this year.
Ofo is burning through $25 million a week in its bid to win its war against Mobike, while its rival could be spending as much as $50 million weekly, industry sources told the FT.
Mobike is in a relatively sheltered financial situation despite its losses due to Meituan’s large cash reserves, but Ofo has faced numerous issues in recent months. A smart lock manufacturer recently threatened to freeze the locks of 3 million Ofo bicycles over a dispute over alleged unpaid debts.
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