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How Bike-sharing Companies can Combat Corruption

2018-10-25 13:06 Thursday

In 2017, the bike-sharing industry has been hit with a number of corruption allegations, including those related to leading companies such as Mobike and Ofo. Internal corruption, poor risk management, and falsification of financial data have become leading concerns for potential investors. Furthermore, corruption in bike-sharing enterprises largely relates to freeloading and kickbacks.


Due to the imperfect management structure characteristic of start-ups, freeloading and kickbacks commonly occur and can seriously harm a company's development. How, then, should bike sharing companies respond to the challenge? This article outlines four effective strategies:

1. Encourage whistle-blowing. By protecting and rewarding whistleblowers, companies can encourage employees to report corruption to compliance or risk management departments.

2. Financial audits. Auditing can effectively expose and mitigate the effects of corruption in investments,  and ensure the safe and efficient use of funds.

3. Collect and maintain evidence. Evidence of corruption can be difficult to obtain and easy to lose over time. Therefore, enterprises must take measures to find and preserve all evidence, especially material evidence.

4. Internal warning and penalties. The company should impose punishment on employees involved in corrupt behavior, according to the severity of the corruption.

Given the unique challenges of their industry, bike-sharing companies should also do the following:

1. Set up a special personnel department. The personnel department can hire professional regional managers and purchasing staff, and assess their performance and professionalism.

2. Remove the payroll function from regional managers.

3. Establish a department responsible for vehicle maintenance.

4. Implement independent quality inspection during the procurement process.

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