Does the Rental Platform Ziroom Truly Save Trouble for College Graduates?

Ziroom (source: thestandard.com.hk)

“Save some trouble in renting, choose Ziroom.” The advertisement in the elevator stands out with its bold colors amongst other commercials for weight-loss tea and an online book purchasing website. The apartment advertised exudes a warm, cosy glow, matching the slogan.

Lin Feng, a 25 year-old programmer who commutes between Shanghai and Beijing for business, was terrified when contacted by the property manager of his apartment rented through Ziroom. The property manager asked Lin to move out of his apartment as soon as possible, which would be torn down in two days.

Lin had to move out because of a new set of regulations announced by the Beijing municipal government this July, which prohibits any changes to the internal structure of the house including the use of partition walls to increase the number of housing units available for rent. The new laws stipulate that “the smallest rental unit shall be the living space designed according to the original construction plan,” and that no renting bunks is allowed.

Ziroom, a rental services company popular among college graduates because of the greater convenience offered by its simplified rental process, has been operating on the basis of partitioning apartments to fit more tenants. It was fine as long as nobody noticed.

“I didn’t notice that the room was partitioned until I realized that the wall makes an echoing sound when you knock on it,” said Lin.

“I had quite a bit of experience of renting in Beijing. I used to rent a single bunk in a room – the so-called ‘group renting’. I was lucky that my roommates were nice. At that time, two girls were staying in the same room next door, while three of us guys stayed together.”

Ziroom claimed that they did not violate Lin’s contract because they have “helped to postpone the deadline” and “paid the required fines for partitioning the room.”

In fact, Ziroom had changed the clause for relevant compensation concerning partition demolition. Last year, the contract said Ziroom will compensate the tenant’s loss with a month’s rent if the room were to be demolished. This year, the compensation instead became a 500 hundred yuan “moving coupon.”

“I’ve talked to my lawyer friend. The worst-case scenario is that I will sue them.” Lin filed an online complaint to the property manager’s superior and was finally accommodated with a room just downstairs with the same monthly rent, saving him the trouble of renting a moving van. “You see sometimes you got to put on an attitude with these people.”

Lin was particularly dissatisfied with the dismissive attitudes he received when negotiating with Ziroom staff. When Lin expressed that it’s almost impossible for him to find another place in two days, especially when he was away in Shanghai, the property manager’s reply was cold and detached. “We didn’t know you were on a business trip. I also mentioned, let your friends come over, and I will ask other property managers to come help you pack things up. We won’t touch your things, so we are already doing what we can and hope you understand. Our company is a service product company. I am deeply sorry for this situation.”

Ziroom advertisement (source: Ziroom website)

Yet Lin was not the only one who reported attitude issues with Ziroom property managers. Liu, a 26 year-old Ziroom tenant working at a state-owned bank in Beijing, faced a similar situation. Liu was given a short notice to move out after broken water pipes were deemed irreparable. The property manager claimed that he was actively seeking solutions with the plumber, but then reached a conclusion several months later that the pipe could not be fixed and the tenants had to move out.

According to Liu and her roommates, the constant change of plans seriously disrupted their lives. While asked to leave, the property manager provided them with no support services “10 yuan moving coupon? are you kidding me? It’s a good laugh,” one roommate taunted in a group chat.

After several rounds of fiery arguments, Liu was left only with disappointment. “We are all the weak and vulnerable fighting for our lives in Beijing to make a living. We are equal. We don’t have anything against you. It’s hard for anyone to move right away,” said Liu.

“I thought to myself, I’d better not pick a fight with someone so emotionally unstable (the property manager). What if he gives me a hard time, next time another problem comes up.” She told me afterwards.

Ziroom, founded in 2011, introduces itself as a tech firm providing housing product and living services on its Baidu page. The rental platform now hires 12,000 people across China, serving a total of 2 million tenants. In the past two years, Ziroom has raised a total of $1.1 billion over 2 rounds, and the latest Series B round took place on Jun 16, 2019.

Xiong Lin, CEO of Ziroom, once told the press that Ziroom, now the leading rental platform in China, runs over 850,000 apartments up until the first half of 2019. At the moment, in the entire industry, the top three rental platforms run a total of over 2 million apartments in the first half of 2019. In the long run, the oligopoly landscape of the rental platform market will become ever more prominent.

The rapid growth of platforms like Ziroom was partly due to an increase in the number of Chinese university graduates and their demand for housing in cities like Beijing. According to data from the Ministry of Education, the number of university graduates reached 8.34 million in 2019, and almost 70% look to rent apartments.

Property managers on Ziroom often lack the patience and ability to effectively communicate with tenants and the company seems only to be interested in passing the buck when facing complaints. But the property managers are hardly to blame. Their negotiations with tenants over scrappy contracts and inefficient business operations can be exhausting and nerve-racking. A user on Zhihu, China’s Quora, asked “what’s it like being a property manager at Ziroom?” one of the answers revealed a heartbreaking scene: “I hate picking fights with people, but at this job, I have to fight with tenants, land owners, water companies, plumbers and other departments at Ziroom. It ruins my mood. I feel bad about myself everyday after work.