Mobike warned it will end its service in the city in “weeks not months” unless there is a reduction in people stealing and damaging its orange and grey vehicles.
The Chinese company said 10% of its Manchester fleet was taken out of use in July alone, and warned that the figure is not “sustainable”.
The business’s bike-sharing model allows customers to park the bicyle anywhere after using it, with the next customer picking it up from where the last one left it.
Docking stations are not provided like those used in Transport for London’s so-called Boris Bike scheme.
Mobike customers create an account and unlock the vehicles with an app, with GPS technology showing where the nearest vehicle can be found.
They then scan a QR code to release a lock.
When the firm launched in Manchester in June 2017 cyclists could reportedly pedal the bikes wherever they liked for just 50p for half-an-hour.
Some of the bikes ended up in the Peak District and Huddersfield.
The company reportedly chose to up the price to 69p for half-an-hour in April because bikes kept being stolen or vandalised.
Mobike has said it may make the “tough decision” to stop operating in the Manchester as “we can’t keep putting bikes in which disappear”.
Fifty bikes were damaged and abandoned in the first few weeks after the scheme launched in June last year, but the problem has grown in recent months.
Bikes are being thrown in waterways, set on fire or left hanging from railings, while others are having locks smashed off to enable people to keep them.
Ofo, another bicycle hire firm, is experiencing similar problems in cities such as Sheffield and Cambridge.
Mobike says it is “actively pursuing civil prosecutions” for theft and intentional damage.
It also fines users £20 if they do not park bikes within the operating zone at the end of their ride.
Mobike is urging members of the public to contact the company to report thefts and vandalism.
Jan Van der Ven, Mobike’s UK general manager, said: “As a private business, we are only viable if our revenues cover our costs, and that is not possible with the current levels of bike loss in Manchester.
“For that reason, we have sat down with representatives from Manchester City Council, Greater Manchester Police and TfGM (Transport for Greater Manchester), and have agreed a range of measures to help protect our bikes.”
Chris Boardman, Greater Manchester’s cycling and walking commissioner, said the problems experienced by Mobike are “not unique” to the region, but warned that his plan to increase cycling is dependant on the existence of a hire scheme.
Chief Superintendent Wasim Chaudhry of Greater Manchester Police said: “Our officers are able to check the legitimate use of the Mobike system and we will investigate reports of suspected theft and vandalism just like we would if someone made a report about their own bike.
“We will always hold those we find breaking the law to account. We must all work together to keep our city safe and moving.”