It’s a little known fact but Uber, the largest taxi-less taxi company in the world, actually owns some taxis.
You see in Singapore it costs upwards of roughly S$50k just for a permit allowing you to own a car. In pounds and pence that works out to £28,178.99. That’s before you even buy the car, that’s then slapped with 100% tax.
So vehicle ownership in Singapore is the reserved for the ultra-affluent. Not good when you want to flood the market with cheap taxi rides.
To get around this Uber started up a shill company called Lion City Rentals. As Quartz reported last week they did so with an $800 million loan.
Due to the nature of start-ups, and keeping the business lean Uber didn’t exactly go about purchasing the cars the normal way. Instead, they found a source for grey market imports. This would save Uber 12% on every car purchased.
But grey market cars are often a bum deal, and Uber found this out to their detriment.
In January of this year one of Ubers dodgy rides set fire. With the 61 year old driver still inside it. Thankfully the driver got out and was unharmed. The car in question was a Honda Vezel SUV.
In April last year Honda recalled the Vezel. Days later Uber purchased 100 from an unauthorized dealer called Sunrita. Eventually they bought over 1,000 Vezels, all needing the recall.
Uber in Sinapore and the dodgy importer were both aware of the recall. Thanks to internal emails we know that Sunrita assured Uber the cars would be fixed by August 2016.
The cars remained on the road without the necessary repairs.
Even after the Vezel fire in January the Uber team refused to take the cars of the road. The reason? It would cost roughly $1 million a week to the business if they did so.
In a half-hearted attempt to feel as though they were doing something, drivers — who pay good money to Uber via Lion City Rentals for a safe, useable car — were told to take their cars in for “immediate precautionary servicing” but never allude as to why.
Quartz quizzed Uber on this and they came back with this statement:
“As soon as we learned of a Honda Vezel from the Lion City Rental fleet catching fire, we took swift action to fix the problem, in close coordination with Singapore’s Land Transport Authority as well as technical experts. But we acknowledge we could have done more — and we have done so. We’ve introduced robust protocols and hired three dedicated experts in-house at LCR whose sole job is to ensure we are fully responsive to safety recalls.”
The thing is Uber has also had to provide drivers with leased vehicles in numerous other countries, including Vietnam and India. Were all these vehicles purchased under the table too?
Clearly, a cost saving of 12% is worth the safety of its drivers and passengers in Singapore. Yet you’d expect a vehicle owned by the company to go through regular and tough safety checks, more so than your average driver owned ride would at any rate.
This latest discredit begs the question, can users of the service feel safe about riding with Uber?
