Shared Tesla electric vehicles (EVs) are on the roads of Shanghai, provided by car-sharing company Woyao Yunche, but the service has turned out to be authorized by neither the EV maker or local government, drawing attention to the once high-flying, but now struggling, car-sharing sector in China, China Business Journal reported on Saturday.
The company, which means “I Want a Cloud Car” in Mandarin, operates a WeChat mini-program that allows users to rent Teslas, including the Model 3, Model S, and Model X vehicles, by the hour, day, or month after a personal ID and license check. Unlike traditional car rental services, Woyao Yunche sends a car to wherever the customer wants instead of having designated pickup and drop-off spots, and has more a flexible due-by-day and pay-by-minute model. Prices start at RMB 2 per minute, RMB 1,200 (USD 179) per day, and RMB 12,000 (USD 1,790) per month.
“Once there is a complaint report, we will arrange officers to the company to conduct detailed investigations,” an officer at the Shanghai Commission of Transport told he media outlet, without detailing whether an official report has been received. As of Monday afternoon, the mini-program was still working.
The company said that it has a fleet of about 10 self-owned vehicles in addition to 200 Teslas provided by owners under a peer-to-peer rental model, according to the same report.
Although Tesla launched leases for the Model Y in the US, Tesla’s spokesperson, quoted in the report, said, “We don’t take any group-buying orders and don’t involve ourselves in any sharing nor rental business in China.” Additionally, Woyao Yunchu hasn’t received a required license for the business from the Shanghai Commission of Transport, China Business Journal wrote.
The problematic operation again casts a shadow over the car-sharing industry. The sector experienced explosive growth along with the boom of the sharing economy in China around 2015, when companies like Gofun, Tuge, Ezzy, and Panda sprung up. In 2017, at its peak, the sharing industry in China raised hundreds of millions of yuan, and more than RMB 70 billion (USD 10.44 billion) was injected into car-sharing companies.
But the bubble burst as a a slew of companies flopped without a clear profitable business model, wrestling with issues surrounding safety, vehicle supply, and high operational and maintenance costs.
Earlier this month, Gofun, founded by state-owned Shouqi Group in 2015, one of the top players in the field, raised hundreds of millions of yuan in its Series B round and is reportedly considering a listing in Mainland China. It was Gofun’s first financing round after 2017. The company uses a consumer-to-consumer model and has partnered with car dealers in a bid to decrease high operating costs.
