(Yicai Global) Dec. 4 -- The China Consumers Association (CCA) has urged authorities to regulate deposits for shared bikes after it received thousands of complaints that several bike-sharing firms went bankrupt without refunding users their deposits, Beijing Evening News reported.
Six bike-sharing groups that operate in Chinese cities such as Beijing, Tianjin and Guangzhou have announced their bankruptcy, said Chen Jian, director of CCA's legal and theoretical research department. Although local governments tried to help consumers get back their deposits, a significant number of them will likely suffer losses.
"Security for prepayment issues must be regulated by legislature," Chen said. "Otherwise it is difficult to fundamentally protect the legitimate rights and interests of consumers."
Bike-sharing businesses should refund consumers' deposits and advance payments according to law, said Chen Fengxiang, director of the Beijing Consumers Association's complaints and lawsuits department.
No business has the right to use deposits and advances, Chen said. Regulators should push bike-sharing enterprises to assume responsibility and should take administrative measures using judicial means to solve the problems as soon as possible, said Chen.
Whether bike-sharing companies can legally collect deposits and then use pooled funds to conduct other financing activities is worth discussing, said Qiu Baochang, a lawyer at Huijia Law Firm in Beijing.
"Relevant departments should act as soon as possible to regulate the practices on the deposits and limit the blind investment of enterprises to eliminate the danger of losing control of investment in the market," Qiu said.