GoFun Is on Brink of Being First Profitable Car-Sharing Firm, CFO Says
Zhang Yushuo
/SOURCE : Yicai
GoFun Is on Brink of Being First Profitable Car-Sharing Firm, CFO Says

(Yicai Global) Oct. 18 -- Chinese car-sharing provider is a stone's throw from being the first profitable company of its kind, according to its chief financial officer.

"I believe that GoFun will be the first company in the shared car sector to achieve a fully profitable business model, and it's not that far away" Securities Times quoted Sima Ruobai as saying.

GoFun, operated by state-owned Shouqi Zhixing, made its operating data public on Oct. 15. The company owns about 30,000 cars in 65 Chinese cities, and has eight million registered users, which around a third actively using the service, according to the figures. Its cars make five journeys a day on average.

Profitability is not its only ambitious aim. The Beijing-based firm aims to have 10 million shared cars on the road within five years, the report added -- that's more than Mobike had cycles at the end of last year.

It plans to meet these goals by bringing in person-to-person car sharing, believing it can rack up vehicle numbers while staying asset-light to keep costs low. Car sharing and rentals are not suitable for startups but can be profitable in the mid- or long-term, China's biggest car website Autohome cited GoFun Chief Executive Tan Yi as saying after presenting the data. Profits will come sooner or later, he added.

GoFun is one of a growing number of car-sharing providers across the globe, which allow users (who can legally drive) to hop into vehicles at designated car parks and rent them by the minute before also parking in a permitted location. Mercedes-Benz runs Car2go, BMW has DriveNow and Chinese state-owned carmaker SAIC operates a similar service called EVCard.

Even BMW and Mercedes have been unable to make their car-sharing services profitable. DriveNow lost EUR17 million (USD19.6 million) last year on revenue of EUR71 million, while Car2go burned an EUR80 million hole in its pocket. Several Chinese providers -- Youyou Yongche and Ezzy to name just two, have had to write themselves off as they were unable to operate sustainably.

 Editor: James Boynton

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Keywords: Gofun , Car Sharing , Sharing Economy