Car-sharing startup TOGO said to be vexed by deposit refund problem

Shanghai (Gasgoo)- Chinese car-sharing startup TOGO is faced with a refund plight, very similar to what is happening to the bike-sharing venture Ofo who is required by over 10 million users to return their deposits, according to local media.

A few days ago, TOGO released an emergency notification on its official WeChat account, saying that users can apply for deposit returns via app and offline registration. It is reported that many users choose to queue in the chilly winter outside the startup's headquarters in Beijing to get their money back in person.

A user in the queue said on condition of anonymity that he applied for an on-line refund as early as October, while after a 7-workday review period, he still hasn't received the deposit yet.

According to local report, a member of staff told users on spot that the company can only guarantee to return deposits to fifteen users each day and the refund should be executed in sequence based on the time that users fill out a registration form.

Local media did an interesting math. The number of users registered on TOGO's platform had reached nearly 2 million in four Chinese megacities, namely, Beijing, Shanghai, Guangzhou and Shenzhen according to a report published on May 23, 2017. Thus, it takes at least 365 years for the company to finish the 2 million users’ refund at the speed of 15 users per day.

The amount of the deposit is RMB1,500 per user, over 7 times more than the deposit required by Ofo.

According to public information, TOGO has closed 6 rounds of financing, so far raising over $60 million in total. However, given the pretty high deposit amount and the huge number of registered users (if the above reported data were real), the money raised seems to be far away from adequate to complete all existing refunds.