The sharing economy has made it easier for communities to peer exchange anything from a spare bedroom in your house to car rides and bicycles. But the model doesn't work for everything, as one umbrella-sharing startup learned the hard way. Just under three months after launch, China-based E Umbrella has reportedly lost almost all of its 300,000 umbrellas available to rent across 11 Chinese cities.
E Umbrella had an investment of 10 million yuan when it launched in April, and charged customers 19 yuan per umbrella deposit and an additional half yuan per 30 minutes. Stands were typically scattered across the cities near train and bus stations and users receive a code to unlock the umbrella after paying for it on an app. However, the startup apparently didn't provide enough information on how customers can return the umbrellas when they're done.
The founder discloses that an umbrella costs the company 60 yuan each to replace, but despite the losses he plans to add 30 million more available across China by the end of the year.
E Umbrella has a questionable business model to start, as unlike bikes, an umbrella-sharing startup would typically see higher demands and steady profits during the rainy season, reports Shanghaiist. Umbrellas are also an inexpensive investment. E Umbrella doesn't appear to charge users an unreturned umbrella fee so most users just end up keeping their rentals.
The sharing economy has made it easier for communities to peer exchange anything from a spare bedroom in your house to car rides and bicycles. But the model doesn't work for everything, as one umbrella-sharing startup learned the hard way. Just under three months after launch, China-based E Umbrella has reportedly lost almost all of its 300,000 umbrellas available to rent across 11 Chinese cities.
