(ECNS) -- Car-hailing service operator Yidao Yongche is reportedly in debt of tens of millions of yuan to its contractors, according to Beijing Business Today.
A Hebei-based company said Yidao still owes them some two million yuan ($289,900). The company signed a contract with Yidao in March to operate its dispatch center.
An employee with the company surnamed Chen revealed that several other contracted service providers also had unsettled payments with Yidao, involving some 50 million yuan by September.
Yidao later admitted the delayed payment to the reporter and claimed the company had a shortage in funds.
Yang Zhao, an employee representing Yidao, said the company would pay the contractors by the end of this month when new funds are injected.
But Chen didn't believe Yidao will keep its promise, saying the company has been using the same excuse since June.
Founded in May 2010, Yidao was a pioneer in the online ride-hailing sector, but it was overtaken by later competitors like Uber and Didi Chuxing in market share.
Statistics by consulting agency Analysys showed that Yidao's active user penetration dropped from 17.5 percent in Q1 to 2.7 percent in Q2 last year.
A driver surnamed Li said he got more orders from Uber and Didi than Yidao. Some customers also complained that it's a little bit difficult to book a car on the service.
It was reported that Yidao has been seeking funders and even experienced a massive layoff last year.
During last October, LeEco's auto division declared it was taking control of Yidao by holding 70 percent of the company's shares.
Yu Bin, an Internet analyst, said that a favorable price policy is still effective for car-hailing services in attracting customers and drivers, and that Yidao may need more money to fund its battle in the hot market.
Zhang Fan, Yidao's vice president in technology, revealed earlier that the company may wait longer to secure a new round of funds due to technique problems. But his statement was later denied by the company in an official statement.
