Another sharing economy company has collapsed!
When you arrive at the office tomorrow morning, the business will be gone. If this is your last day at EZZY, what would you do?
This was what Fu Qiang, the founder and CEO of the shared car platform EZZY, said at a strategy conference in May this year. Five months later, his words came true.
On the evening of October 23, the company informed its employees that they were being laid off.
According to an internal employee who spoke to the media on October 24, the company gave no prior notice before the shutdown.
On October 25, EZZY officially announced that it had stopped its services and was working on handling the aftermath. A liquidation team was formed to manage the process.
More than two months ago, the article "Shared Audi and BMW's Turning to the World" sparked a lot of attention. Now, news of the closure of shared car companies has emerged again, and it feels like a bitter reminder of the industry's instability.
The office is now empty.
According to EZZY’s official website, the company was founded in 2014 as a self-driving travel product for cities. It focused on short-distance urban travel, offering instant ride services that could be accessed anytime and anywhere with one click. Additionally, EZZY GO provided tailored services based on user habits, such as morning deliveries and airport transfers.
EZZY used the BMW i3 for its self-drive services and also included gasoline models from Mercedes-Benz, BMW, and Audi. The company positioned itself differently from traditional car rentals, emphasizing quality travel experiences and city life through scene-based services.
According to IT Orange data, Beijing Dream Technology Co., Ltd., the operating company behind EZZY, raised RMB 40 million in angel funding in April 2015 and secured another round of financing in March 2017.
Public records show that Beijing Dream Technology, EZZY’s main company, has a registered capital of RMB 300,000. Its founder, Fu Qiang, previously worked in the investment banking department at Galaxy Securities before leaving to start his own business in 2014 and entering the time-sharing leasing industry in 2016.
Beijing Dream Technology
In May of this year, EZZY launched a new brand image at a hotel in Beijing, announcing plans to expand from Beijing to four first-tier cities in the “Northern Guangshen†region. It aimed to deploy 5,000 cars nationwide this year.
On the afternoon of October 24, some media visited the registered address of Beijing Dream Technology at No. 140371, 14th Floor, Building 1, No. 33, North Road, Renmin University, Haidian District, Beijing. Upon arrival, they found that the building was an office complex, and according to the building's staff, “There was no 140,371 on the 14th floor, and they had never heard of the company.â€
An internal EZZY employee said, “I don’t know the Haidian address. Even if we find the office, it doesn’t matter because most employees are no longer there. Some still work, but they have their own offices, and I don’t know where they are.â€
The employee also confirmed that labor contracts had not been terminated yet.
Liquidation has begun.
It was reported that after EZZY announced its dissolution, a liquidation team started the process of settling debts.
Previously, media reports suggested that EZZY had nearly 100,000 users since its launch. However, on October 24, employees confirmed that only around 1,800 users had paid deposits. With a deposit of 2,000 yuan per user, this would amount to approximately 3.6 million yuan in total deposits.
However, EZZY did not provide a clear plan for handling user deposits or account balances. Instead, users were informed via SMS and asked to submit claims within 30 days by email. The email needed to include personal details, refund amounts, and ID scans.
A member of the liquidation team stated that deposits could not be refunded immediately and that repayment would depend on the order of claims and legal procedures. Despite this, many users still went to the office to seek answers.
Legal experts explained that liquidation is different from bankruptcy. It is an internal process that does not require external intervention. If the company’s assets are insufficient, it may eventually file for bankruptcy.
If the company goes bankrupt, users risk losing their deposits entirely.
Currently, only one shared car company is profitable.
Some analysts believe that high operating costs and the inability to achieve profitability are the main reasons behind EZZY’s collapse. Peng Bo, a partner at PricewaterhouseCoopers, said in an interview, “At this stage, time-sharing car rentals are still in the training phase, and financial difficulties due to lack of funding are common.â€
Since the beginning of this year, shared cars have become a new trend, attracting many players, including internet companies, traditional automakers, and dealers. According to incomplete statistics, over 370 shared car platforms existed in China by the end of 2016, with more than 100 active.
Investor interest in shared cars has also grown. From 2013 to 2016, the capital invested in the shared car industry increased from 10 million to 150 million yuan, with an average annual increase of 50 million yuan. In the first half of this year alone, several shared car companies raised nearly 400 million yuan, and annual fundraising is expected to exceed 800 million yuan this year.
Despite the enthusiasm, achieving profitability remains a major challenge. “There are more than 30 time-sharing leasing companies in China, but only one is currently profitable,†Peng Bo revealed.
Peng Bo believes that it is difficult for shared vehicles to become profitable quickly through low pricing. Future success depends on increasing usage rates, which are influenced by user numbers and other factors. He added that the shared car industry is still in the early stages of development and may take several years before it becomes truly profitable.
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