The bike-sharing sector has become one of the fastest-growing industries in the country, with users typically renting the bicycles for short periods by first unlocking them through the use of mobile phone apps.
Costs can be as low as 1 yuan (15 US cents) per hour and the bikes can be left anywhere for the next user to come along.
While hailed as a way to fight road traffic and pollution, the phenomenon has become viewed as a nuisance in some communities, with bikes often parked outside of designated parking areas, left in the middle of sidewalks or even on freeways.
Row upon row of mostly orange and silver bikes from the company Mobike sat collecting dust in a massive parking lot in Shanghai's Huangpu district near the city's famed riverfront Bund area.
They had been rounded up by a private firm hired by the government to oversee bicycle parking.
The bikes began to accumulate over the past month, said a woman whose balcony overlooks the crowded storage lot, declining to give her name.
A Huangpu district government spokeswoman said shared bikes are not exempt from parking rules.
"Any vehicles that violate parking regulations will be impounded. It's the same for everyone," she said.
Mobike said in a statement that it was in touch with authorities and seeking to clarify what it called a "misunderstanding" by the company hired to round up the bikes.
The bike-share concept has attracted huge amounts of venture capital investment for key players Mobike and Ofo, who have funnelled that money into placing hundreds of thousands of bikes in dozens of Chinese cities.
China's state-run Xinhua news agency said Thursday that over the past two years more than 29 different providers have sprung up, placing more than three million bikes on streets around the country.
A community in Beijing called Mentougou impounded hundreds of share bikes for similar reasons last month.
It later returned them to their providers.
More than 500 bicycles were dumped in huge piles on the streets of the southern city of Shenzhen in January, with images of the nearly three-metre-high jumbled stacks going viral.
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