When you get up tomorrow morning and you get to work, this career is gone, and if this is your last day at EZZY, what are you going to do?
That’s what Qiang Fu, founder and CEO of car-sharing platform EZZY, said at the launch of its new EZZY strategy in May.
But just five months later, it was true.
On the evening of Oct. 23, EZZY, a car-sharing brand operating in the Beijing area, was suddenly disbanded by its employees.
On Oct. 24, one EZZY employee, who declined to be named, said that the company had held a high-level meeting the night before and then informed everyone via wechat group that they were all dismissed and off work the next day, without explaining why.
On October 25, EZZY officially announced that it had terminated the EZZY platform and was actively dealing with the subsequent issues, setting up a liquidation group to carry out liquidation and liquidation.
It is understood that after the incident, Fu Qiang, founder of EZZY, deleted a large number of media friends on wechat and blocked contact information, leaving him in a state of disconnection with the outside world.
According to public information, the main company of EZZY is Beijing Daemeng Technology Co., LTD. Its founder, Fu Qiang, used to work in the investment banking department of Galaxy Securities before leaving the company in 2014 to start his own business. In 2016, he transformed into the field of auto time-sharing leasing.
Share BMW I3 (top) and Audi A3 (bottom)
In May, EZZY announced that it had 100,000 users and six daily sales per car, and announced that it would expand its operation from Beijing to four first-tier cities — “Beijing, Shanghai, Guangzhou and Shenzhen” — and that it expects to have 5,000 cars nationwide this year. And according to Bang ge learned that this data in the car timeshare rental field is absolutely quite excellent results.
But history tells us that it is lonely at the top.
“Why do I get hurt every time?”
Ms. V is a double user of Kuqi and EZZY. When Kuqi was reported to have run away, she had lost 299 yuan. Faced with EZZY who could not return the deposit after entering the liquidation procedure, Ms. V said angrily, “I have lost 299 yuan for Kuqi run away, I can calculate without explanation, but this time it is 2000 yuan! How come I get hurt every time!”
Ms. V revealed that she started to apply for the refund of her deposit on September 23, but after a month, the deposit still hasn’t arrived, and according to the EZZY APP, the refund time is 15 working days.
Ms. V’s experience is not rare. They have formed a group of dozens of Internet users who are worried about their security deposits and nervously discussing countermeasures.
Like kuqi, the last straw that crushed EZZY was the deposit.
A mid-level EZZY executive said the day before the announcement that it would have to wait until the liquidation of the company.
Mr. T, also an EZZY user and employee, said that he had noticed that there were no available cars on the APP around mid-October, but had simply assumed that the restrictions were due to a meeting in Beijing, until the company’s problems were revealed.
“In the middle of October, when payday came, we didn’t get paid.” “It was beginning to feel like something was wrong at the company, but we didn’t know why.”
The lack of a car might just indicate that EZZY has been taking cars back since then, in preparation for liquidation.
BMW? BMW?
Compared to other time-sharing platforms on the market, EZZY has two big features:
1
High-end vehicles, and BMW I3 as the main operation vehicle;
2
Premium memberships — where members pay a fixed monthly fee in exchange for lower usage rates — were introduced.
According to media reports, the service was limited to iOS users and did not support Android phones when it began operating in Beijing as a BMW I3 + membership model. It is reported that the monthly fee of EZZYVIP members is 4000 yuan, and they can use idle cars for unlimited times. The operation area also includes ABC three areas. Zone A covers CBD and Sanlitun, Zone B covers the fourth Ring Road, and Zone C covers the urban area of Beijing besides, there are certain rules and fees for using cars in different areas or returning cars in different areas.
Fu Qiang, who was once asked why he would operate in such a mode, cited “product planning strategy” as his explanation. He believes that both the adoption of high-end electric vehicles and the selection of high-end CBD business areas as efficient operation areas are to enable EZZY to better serve its members. And this part of the user’s portrait is high-end, petty bourgeoisie and so on. That high enough threshold may have set itself up for crisis.
According to EZZY’s previous public information, it put 500 BMW i3s in the Beijing area, but according to the number of vehicles displayed on the APP and some media reports, the actual number is far less than that, around 100.
“The overall cost of operating with a large number of BMWS is much higher than ours.” “The rental and maintenance costs of A Beijing-brand BMW are higher than those of a domestic electric car of tens of thousands of yuan, and the venue cost is not low,” said a time-sharing leasing company practitioner assigned by a car company.
“EZZY’s members-only model makes it a premium demographic, which is small in number and typically owns a car.” “They travel purposefully and don’t have much time to run to a specific place to find a car to drive,” said one CEO of a time-sharing rental company in southern China.
Previously, unlike other time-sharing rental companies that pick up at their outlets, EZZY announced “Pick up anytime, Anywhere,” allowing users to park in a legitimate spot or parking lot. Tuge, another car-sharing player, also uses this model, but instead of parking in one of Tuge’s co-owned parking lots, the next time you use your car, you pay a parking fee (a small subsidy). EZZY said he will fully reimburse the car for parking.
Therefore, EZZY needs to provide users with high subsidies for both car use and car replacement. Some analysts believe that high costs and unsolved profit problems are the main reasons for EZZY to stop operation in a short period of time.
Fu Qiang’s thundering words: I unlock crotch in the crowd, as if the world is an eighteen-year-old girl.
Fu Qiang’s public statement
The fundamental reason for our failure is that cost management has not been done well.
I consider myself a fairly good product manager, but also a very bad operations manager. Although our operational data are beautiful, with high volume and user engagement, I cannot avoid the problem of my personal ability.
We pay a lot of money to make what we think is the best product and the best user experience. For example, in order to make EZZY achieve the ideal operation state and truly realize free parking at will, we invested a lot of manpower and material resources and constantly deployed vehicles; In order to prevent users from reducing their use due to parking fees in the parking lot, we cover all parking fees.
The core area of our launch is International trade, so we can imagine how high the cost of this part is. If a user pays $30 for a single purchase, the underlying cost is likely to be $60. The end result, on the one hand, is up to 90% user engagement, and users can keep using it for a long time and keep renewing it. But because we lost money on every deal, the company ran out of money quickly.
So we have come to where we are today, ironically, the “self-immolation” of an idealist. If, given the choice, we had kept cutting costs rather than subsidizing customers, we might have lived longer and perhaps waited for a better day.
In addition, the direct cause of the situation we are in today is financing failure.
The day after I raised $20 million in February, I started looking for new financing. Because we know very well that this money is simply not enough.
In the logic of investing, after the last stage of a company is completed, investors evaluate the results of the company. Normally, if the results are good enough, investors will give another round of valuation, then the next round of funding, and the company continues to move down. Unfortunately, EZZY’s answer didn’t satisfy the capital markets. The complaint is that the operational numbers are good, but the financial numbers are terrible. If it is to measure a team, our team’s skill index is relatively biased.
I was looking for money every day and met with more than 50 investment institutions. Originally, two institutions had agreed to invest, but in the last two days of the National Day holiday, the leading institution decided to give up, and the smaller institution was willing to insist on investing 5 million yuan. I was torn at the last minute. I knew that taking $5 million wouldn’t change anything, that it wouldn’t change anything. I tore up the agreements that had been made. Finally, I told the other party the actual situation, considering the current situation of the company, from the perspective of investment security, it is very risky to invest 5 million in the company.
My thinking was, there’s no need to drag another man down.
“Every pussy is blown in tears.”
It was very clear to me from day one that EZZY would have a hard time staying afloat without saving on operating expenses. As for the business model, we are always exploring how to make sustainable development while ensuring the user experience.
Of course, we failed.
We’ve been doing very well in terms of mobility of vehicles. All of our money goes into the operation. To put it bluntly, if someone else hires one driver, we might hire 10. At our peak, we had more than 30 dispatch drivers. In the last half month, due to financial constraints we could no longer support such a large fleet of vehicles, there were very few cars on the map.
I used to think it was silly to pay a lot of money to rent a car from a rental company and then let the user use it at a very low price. But there is still a chance to break even or even make a profit as long as the operating numbers are in good shape.
According to our financial situation, when the number of daily orders reaches 6, the cost of vehicles will be flat, and the operating cost of vehicles will be covered by about 8 orders. In Beijing, for example, if the size of the fleet could be doubled to 1,000 vehicles, I think we could break even based on the operating data at that time.
It’s just that we’re so obsessed with user experience that most of the money goes to operations.
Every single one of our big guns was blown out in tears, and it took a lot of effort and cost to get us to where we are today. But I have never regretted going into this business. Sometimes I think that if there was still a chance to do it, if we had raised money in the capital markets, if users and shareholders had continued to trust us, we could have created an attractive business model.
Today we failed, can only prove that we have not done well, does not represent the failure of the sharing economy, not to mention the failure of car sharing.
Article synthesis from entrepreneurship state, entrepreneurs
