“LTA will continue to monitor Ofo’s efforts to comply and may cancel Ofo’s licence if Ofo does not show satisfactory progress,” it said in the statement.

Ofo has been facing cash flow problems and is on the verge of bankruptcy. It has shut down its operations in Australia, Austria, and Germany, among other locations.

In an internal note to employees last month, Ofo founder and CEO Dai Wei said: “During the past year, we have borne immense cash flow pressure. We have to return users’ deposits, pay back our suppliers, and keep the company running. We have to turn every yuan into three.”

The company did not immediately respond to a request for comment on Thursday.

Bike-sharer Ofo has nearly 12 million users waiting for deposit refunds – more than the population of Belgium

When Ofo first emerged, the bike-sharing industry seemed a potentially lucrative idea and positioned the firm as a pioneer of the tech and sharing economy in Asia.

Ofo was launched in Beijing by five former members of the Peking University cycling club in 2014, with the idea of promoting bicycle tourism through a bike-sharing platform.

In China, where bicycles have long been a common mode of transport in many regions, Ofo dispatched 1 million bright yellow bikes across 35 cities.

The firm soon received hundreds of millions in financial backing from Chinese tech giants including Alibaba Group, Xiaomi and Didi Chuxing by 2017, and was worth US$2 billion that year, with a presence in 250 cities across 20 countries.

Alibaba, which owns the South China Morning Post, last year raised US$866 million in funding for Ofo.

Experts say, however, that the existing business model of the bike-sharing economy simply isn’t sustainable.

“The fundamental problem is that Ofo has a broken business model,” said Walter Theseira, a transport specialist at the Singapore University of Social Sciences. “This is a problem the entire bike-sharing industry has.”

Rather than catering realistically to the needs of the market, industry players have been more interested in trying to prove their firm’s growth by “dumping” a large number of bicycles in the street – creating an oversupply from multiple players in each city, Theseira said.

“It’s a basic business model strategy that was incredibly easy to replicate,” he said.

Ofo’s problems in Singapore surfaced in the middle of last year, when China-based website TechNode reported that Ofo had launched a warehouse sale of bikes to downsize its operations in Singapore.

A poster showed that bikes were priced at S$50 (US$36.80), when based on financial records, the cost of each bike was 335 yuan (US$49.45).

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In late December, local media reports said Ofo had vacated its downtown office in Singapore’s AXA Tower.

On February 9, the firm laid off all its Singapore workers without compensation. It was alleged to owe several staff thousands of dollars, while logistics firm SB Express said it was owed up to S$60,000 (US$44,173) in unpaid bills, according to the TODAY news website.

The bike-sharing company’s dramatic rise and fall is often cited as a cautionary tale for others who seek to enter the sharing economy.

Ultimately, Theseira said, the sharing economy is often sold to the public and investors as a utopia where expensive assets such as bicycles and cars can be more easily accessed, but reality and demand have played out differently.

“I don’t think Ofo did much better or worse than the other bike-sharing firms,” he said. “The only reason why they’re the first failure in this story is because they ran out of money first.”

Additional reporting by Yingzhi Yang