Photo/Zhang Haini

Dec.17 (NBD) -- Car sharing company TOGO was running into problem again after report of exiting Nanjing market and shrinking number of cars earlier this year.

Recently, TOGO users in Beijing, Shenzhen and Chengdu disclosed that they were unable to get their deposits back within 7 working days promised by the car sharing company. Some have even been waiting for 2 months.

It is surprise to note that the car-sharing company became cash-strapped only two months after it secured about 10 million U.S. dollars in its Series B2 funding. 

A user surnamed Ran told Chengdu Economic Daily that he likes TOGO as it offers a wide selection of cars, such as Mercedes Smart, BMW Mini, Audi A3 and Jeep Renegade models. However, it also means the operating costs of TOGO is high no matter its cars are bought or rented.

In addition, TOGO cars are allowed to be parked at any parking lot that is convenient to users. But sometimes the next user have to pay for parking fees before diving a car away, which greatly discourages uses.

According to a maintenance crew member, TOGO offers wages for its maintenance staff 50 percent higher than that is offered by its counterparts. But they have to pay parking and fuel fees for cars in advance and the fees will be reimbursed later.

Another maintenance staff in Guangzhou disclosed that TOGO owed over 1.8 million yuan (261,217.9 U.S. dollars) to maintenance team in Guangzhou.

It is also noted that less and less TOGO cars are available on its APP in recent days.

Unlike its rivals including Chongqing Lifan-backed Pand-Auto and Chery-backed GoFun, most of TOGO's cars are rented from car companies. 

According to the person in charge of the Chengdu unit of Dakar Auto Leasing, the company has rented a total of 200 cars to TOGO in Chengdu, which have almost been taken back. But the person refuse to disclose how much rental fees remains unpaid.

Since 2015, the car sharing industry has seen explosive growth. However, it is hard to survive in fierce competition. It is noted that a handful of players including Muggle, Uucars, Zhongguan Auto and EZZY have already quit the market. In the meantime, a few car sharing company have secured new funding in the second half of this year.

Due to high operating costs, the scale of sharing cars is apparently unable to rival that of sharing bikes. Taking sharing car leaders EVCARD and GoFun as examples, they offer about 42,000 and 30,000 vehicles in total.

Tan Yi, CEO of GOFUN said there is no short cut for companies to succeed in the car sharing industry, which requires proper investments and patience as well. As the government continues to control the number of cars on road, Tan is bullish on the car sharing market. The industry is at a crucial point to shift focus to more refined operation.   

Email: tanyuhan@nbd.com.cn