Manchester could be the first world city abandoned by bike-sharing behemoth Mobike on the grounds of persistent vandalism and theft.

The Chinese firm has issued a final warning to Mancunians following a year which has seen substantial numbers of the company’s orange and silver bikes damaged, stolen or thrown in the Manchester Ship Canal.

Every month this summer 10% of Mobike’s Manchester fleet went missing or was vandalised, according to Steve Milton, Mobike’s global communications and marketing leader.

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Many of the estimated 2,000 bikes ended up at the bottom of the canal at Salford Quays and in various other waterways. Others were strung up lampposts, abandoned in the Arndale shopping centre, locked in secure car parks and hidden in sheds. A startling number had their locks hacked off – and with them, their inbuilt GPS trackers – and were resprayed gold, silver and a rainbow of other colours.

“This is not an idle threat. It’s not PR ... The losses are not sustainable. We are going to have to draw a line under this at some point,” said Milton. “Everyone is unhappy with the current situation. Users are unhappy because they can’t find bikes when they want them, the police are unhappy because they’re having to waste time dealing with petty vandalism and we are unhappy because we aren’t delivering the service we want.”

Facebook Twitter Pinterest Last June, Manchester became Mobike’s first European guinea pig. Photograph: Christopher Thomond/The Guardian

Mobike will decide at the end of the month whether to pull out of Manchester. It is also assessing its position in Newcastle Gateshead, where the firm has also had problems with vandals – albeit not on the same scale.

In Manchester, few people with close knowledge of the scheme expect Mobike to stay put. Some say that Mobike’s final employee in the city has indicated he expects to be out of a job come September.

Chris Boardman, the former Olympic champion turned Greater Manchester cycling and walking commissioner, is already talking to other public bike hire companies with a view to introducing a scheme in all 10 Greater Manchester boroughs in future.

When Mobike launched in Manchester in June last year users were allowed to pedal the bikes wherever they liked for just 50p a half-hour, with some ending up in the Peak District and even over the Yorkshire border in Huddersfield. Now the company has put up a strict “geo-fence”, fining users £20 if they park a bike outside a small area of central Manchester.

The firm has a high turnover of employees and contractors and a reputation as a tardy payer. In April the local firm contracted to repair the bikes and redistribute them around the city locked Mobike out of its own bike shed for a week until its invoices were settled.

Facebook Twitter Pinterest Users can locate the nearest bike using GPS and the Mobike app, and then unlock it. Photograph: Christopher Thomond/The Guardian

There have been grumbles about glitches in the app, which frequently showed as available bikes that had long disappeared (known as phantom bikes in the local parlance), as well as complaints that the bikes were too small for anyone over about 5’8” (1.73 metres). For weeks bikes could not be repaired because the spares did not arrive from China.

Boardman, who recently announced plans to introduce 1,000 miles of safe cycling and walking routes called Beelines, said: “It’s a real shame that a small minority of people have not treated the Mobike scheme with respect.

“Issues with the theft and vandalism of bikes are not unique to Greater Manchester – unfortunately many other cities worldwide have experienced the same problems.”

Despite high levels of vandalism, some Mancunians have gone to extraordinary lengths to rescue abandoned Mobikes.

Last August a man called Neil Wilkinson was hailed as a hero for stripping to his swimming trunks and fishing Mobikes out of the water at Salford Quays using a fishing rod, rope and a plastic bottle.

Mobike had never before withdrawn from a city because of vandalism, said Milton. The firm pulled out of Washington DC and Dallas in the US, but only because it did have enough bikes to make the schemes work, he said.

Asked why Mancunians seemed uniquely determined to wreck the bikes, he said: “We aren’t sure. In cities where there are docked schemes, such as in London where there are Santander bikes, people seem to understand better the concept of public bike-sharing.

“But in London, too, we have discovered there are some areas we have realised are no-go areas, for social reasons. They are areas where, if you put bikes there, they disappear. Maybe in Manchester we see that more because these sorts of areas are nearer the city centre, or in between Manchester and Media City in Salford?”

Last June, Manchester became Mobike’s first European guinea pig. Since then, city residents and visitors have taken nearly 250,000 trips on Mobike bicycles, covering more than 180,000 miles. The company has 200 million users worldwide.

The wheels have already come off schemes operated by Mobike’s rivals. Ofo, another Chinese-owned firm, pulled out of Leeds, Sheffield and Norwich in July, saying it would concentrate instead on “key markets”. These include Oxford and Cambridge – where six bikes were spotted in the River Cam this week – as well as London.

Alibaba Group, which has heavily invested in Ofo, raised another $866m for the company back in March, its most recent round of funding, and is keen to start seeing a return on its investment.

Hong Kong firm Go.Bee pulled out of Europe entirely earlier this year after thousands of its bikes were trashed or stolen, going bust soon after. When a Santander-sponsored scheme opened in Milton Keynes in 2016 half the fleet were trashed within a year, leaving a repair bill of £200,000.