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Electric car rental startup UU Cars shuts down service

By Sheila Yu

Electric car rental startup UU Cars (“友友用车” in Chinese) ceased operations due to financial difficulties, local media is reporting (in Chinese).

The company’s operation plan was thrown out of whack when an investor did not provide funding as scheduled, said the firm’s CEO Li Yu.

The Beijing-based electric car rental firm was founded three years ago. It started out as a P2P private car rental platform before switching to the electric car timeshare rental service in October 2015.

During this period, the startup won an aggregate US$ 20 million backing from investors including Yiche (“易车” in Chinese), Lightspeed China Partners (“光速安振” in Chinese), China Renaissance K2 Ventures (“险峰华兴” in Chinese), as well as angel investor Wang Gang.

The startup ended up in burning through all of its cash in three years, plagued by high costs in vehicle purchasing, operation, and maintenance, as well as the slow development of charging stations. Timeshare rental firms are estimated to lose RMB 50 to RMB 120 on average on each electric vehicle they operate every day.

In recent years, electric vehicle timeshare rentals are picking up steam in major Chinese cities, with government support. The new rental model has provided another channel to promote the use of electric cars, as exorbitant purchase prices, coupled with a lack of charging facilities and long charging time, have posed serious impediments to the further development of electric cars in the country.

Since 2015, roughly 15 firms have been engaged in such timeshare rental operations in major Chinese cities, including Beijing’s Yidu Yongche (“一度用车” in Chinese) and Shanghai’s EVCARD.

Source:: Electric car rental startup UU Cars shuts down service

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