Photo/Shetuwang

Dec.4 (NBD) -- China's car-sharing industry is going through an adjustment this year.

It is noted that a string of car-sharing companies have run out of business. Electric car rental startup Uucars stopped operation last March, followed by its counterparts Muggle and Zhongguan Auto quitting the market this year.

Bankruptcy reasons may vary from company to company, but there is one thing in common-most of them are cash-strapped. Poor management is also another factor.

Independent car analyst Zhang Xiang told news outlet Yicai that lack of dispatchers is the major reason for the failure of Uucars, resulting in displaced cars, which are ultimately fined by police. Moreover, some of its cars are scratched and some even deformed.

In addition to that, the industry is facing more issues including imbalance between supply and demand, inconvenience of fetching and returning a car, poor sanitation.

Too many broken cars and long-time accident handling can also be seen, a student of Shanghai Jiao Tong University told Yicai.

Rising car prices, labor costs and parking space rents, investments in charging piles, and maintenance and sanitation fees caused by improper behaviors of users all drive up the costs of car-sharing companies.

However, people are getting familiar with this market and university students are becoming major users of such services.

According to Xu Zhengpeng, Chairman of car-sharing company Jia Bei, the average usage rate of the company's sharing cars has increased by 20 percent this year, reported Yicai.

Although the company hasn't turned profitable yet, Xu is bullish on the car-sharing market. He predicted that sharing cars will number 5-6 million in the coming years and a few players will stand out as industry giants.

As of June this year, the number of registered car-sharing companies has exceeded 400 with over 100,000 cars hitting the road. The market size of car-sharing business is 1.73 billion yuan (250.9 million U.S. dollars) in 2017 and is expected to bloom to 3.65 billion yuan (529.5 million U.S. dollars) in 2018, according to a report released by newsijie.com.

Email: tanyuhan@nbd.com.cn