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.
The founder discloses that an umbrella costs the company 60 yuan ($8.82 USD) 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 (and other startups just like it) 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 idea isn’t new either; over in the US, a startup named BrellaBox pitched a similar concept on Shark Tank and was called “the worst idea ever heard” on the show by one of the panelists.