Chinese bike-sharing service provider 3Vbike declared bankruptcy due to a large number of stolen bikes. The bike-sharing service recently announced that operations have been suspended since June 21.

It is the second bike-sharing provider in China that has gone bust, following the fall of Wukong Bike, the country’s first bike-sharing provider to go bankrupt.

“We have refunded nearly 95% of our users’ deposit, but about one or two hundred customers still haven’t applied for the refund,” said Wu Shenghua, the founder of 3Vbike.

Investing nearly one million RMB and building 1,000 bikes, Wu only has a small number of bikes available on the market. The company’s loss rate in some regions even reached 100%.

According to public data, 3Vbike was established in December 2015 with a registered capital of 100,000 RMB. The first batch of shared bikes was released in Baoding, northern China’s Hebei province, on February 26.

Wu planned to make profits by renting the bikes and using them for advertising. He said the business would have been profitable if the loss rate stayed under 30%. “My investment could have been recovered within a year if each bike had been ridden once a day,” Wu said, adding that any advertisements would be pure profit.

“Though our company was registered in Beijing, our target customers were in second- and third-tier cities,” Wu explained. He believes it was better for the company to avoid competition with the big players.

However, the company’s development did not go according to plan, as some cities’ urban management departments forbid his bikes.

But what really astonished Wu was the large number of bikes that were stolen. “We placed more than 1,000 bikes on the market, but only less than 10 were in operation before we declared the suspension,” Wu said.

Wu believes that a lack of anti-theft measures was the main reasons for the loss. According to him, the absence of smart locks on the bikes was out of consideration for cost control.

He attributed his failure to the high number of bike losses, saying his business scale was not large enough and the loss was totally not affordable for him.