A couple of days ago, Obike announced that they will be ceasing operations from Singapore. Many Singaporeans were shocked. They were not particularly concerned about the company. They were more concern about the deposit of $49 that they left in that App. What a shock to their journey with money!!!!
“Obike. Why you pangseh us!!”
Brief History of Obike
Obike is a Chinese-founded stationless bicycle-sharing system. The bikes have a built-in Bluetooth lock and can therefore be left anywhere at the end of a journey, not just at a docking station (Source: Wiki). At the start, there was fierce competition between other companies such as MoBike and Ofo. Each offering promotions and free rides. Obike was one that them who offer free rides if they leave a deposit of $49 in their account.
Then what happened
After a period of competition, it seems like the tides were finally gone. Each bicycle sharing company seemed to be operating on a monthly subscription model. Until 25 June 2018, Obike release a letter on their Facebook page saying they will be ceasing operations.
“1 Million Users in Singapore. That’s $49Million the company has?”
Several accounts with deposit seemed to have been upgraded to VIP membership. Others couldn’t find the refund button. In Obike’s defense, this decision seemed to have came because they are unable to fulfil the new requirements and guidelines released by Land Transport Authority (LTA). I wonder where did the money go to?
They were also ordered to remove all their bikes from the roads. I just wonder who will be the one going to do it?
What can I do if I want to get my refund?
We can always complain that this is unfair and so on. But how can we effectively solve this situation? I know of some friends who have gave up getting the $49. Others have turned to CASE (non-profit, non-
What can we learn from this?
“Ah Ma says every lesson got a moral of the story”
This lead me to think about recent scams that I heard of in my journey with money. First, let’s see the difference between investing and a scam.
Investing – “May have a chance to lose money”
Scam – “Cannot get back your money”
While this is oversimplified and not confirmed that Obike is a scam. Other scams are like binary options and faking being a policeman and asking people to transfer money. We obviously have to protect ourselves from such scams.
In our journey with money, we will be presented with opportunities. Some might involve buying into a business, other might be in investing. One thing I learn about money is this.
“No one cares about your money except yourself”
Keeping that in mind, we should take measures to safeguard our money. That’s why I like the concept of Value Investing. It is a very simple idea. To invest in a good company at an undervalued price.
Let’s take Obike for example. Given the business model, do you think Obike is a good company to invest in?
For me, I feel that this industry has a high competition risk. Many companies can come into the industry if they have deep pockets. They just need to have at least $100,000. (Simple math of 1000 bikes x $100 per bike). They would then need someone to run the company operations (apps, maintenance, repairs). This can be replicated easily. There is not economic moat at all. Just thinking about these 2 risk, I will not invest in this company even if they are making a lot of money.
Next time, consider thinking deeper into the company business. It can protect your downside.
For those that want to find out more, the Value Investing Bootcamp is where you can learn these principles, coupled with the valuation techniques and the fundamental analysis. Attend the preview workshop to find out more and at the same time, pick up Options knowledge so you can use in conjunction with stock investing knowledge to build up your passive income.
Wishing you the best in your journey with money.