Xiaoming Bike, a bike-sharing firm based in south China's Guangdong Province, faces a lawsuit after users have had difficulties in receiving deposit refunds.
The Guangdong Provincial Consumers' Association Monday said it has lodged a civil public welfare lawsuit against the firm's operator, Guangzhou Yueqi Information Technology Co., for its failure to pay deposit refunds and having no third-party supervision over its bank account for the deposits.
The agency said the Guangzhou Municipal Intermediate People's Court has accepted the case.
Since August, the association has received more than 30,000 consumer complaints over deposit refund issues.
The bike-sharing startup has failed to address the complaints in a timely fashion since mid November, the association said.
The association said it hoped the lawsuit will help promote the healthy development of the bike-sharing industry.
Many shared bike users in China have fallen victim to defaults on their deposit refunds, after two operators, Coolqi and Bluegogo, went bankrupt.
China's bike sharing market is expected to rake in 10.3 billion yuan (1.5 billion U.S. dollars) in revenue this year, a 736-percent increase from 1.2 billion yuan in 2016, according to a report from iiMedia Research.
It estimated the number of shared-bike users in China will hit 209 million this year, compared with 28 million last year.
A report issued by the China Internet Network Information Center in August estimated that users may have paid 10 billion yuan in deposits to use shared bikes.
The public has called on regulators to set rules on an unified process and time limit for users to get deposit refunds, and require firms to keep independent bank accounts to ensure they can afford to refund users.