Over 1,000 defective cars for lease allegedly bought by Uber for Singapore

SINGAPORE — Uber Technologies’ auto-lending programme is facing new questions after the company leased cars prone to fires in Singapore.

The ride-hailing company borrowed capital from Goldman Sachs Group and other banks used to purchase more than 1,000 defective Honda Motor vehicles from importers, according to The Wall Street Journal. Uber managers in Singapore were aware that Honda had recalled the Vezel models when it bought and leased them to drivers, and at least one car burst into flames in January, the newspaper reported.

Uber said it took “swift action to fix the problem” after learning of the auto fire and worked with Singapore officials on its response. “We acknowledge we could have done more and we have done so,” a spokesman for the company wrote in an email. “Since the beginning of the year, we’ve proactively responded to six vehicle recalls and will continue to do so to protect the safety of everyone who uses Uber.”

Rival ride-sharing company Grab said in a statement on Friday (Aug 4) that the company did not have the petrol-only model of the Honda Vezel, which was subject to recall, in its fleet.

"GrabRentals only carries the hybrid versions of the Honda Vezel ... the hybrid version of the Honda Vezel uses a different mechanism from the petrol-only model that was the cause of the fires," Grab added. 

Bloomberg reported in 2016 that Uber’s lease contracts shackled some subprime borrowers to vehicles they could not afford. The San Francisco-based company received a US$1 billion (S$1.4 billion) credit facility led by Goldman Sachs to fund the programme at the time.

In January, Uber paid US$20 million to settle a US Federal Trade Commission lawsuit, saying the company made false or misleading claims about its leasing programme, among other alleged violations. Uber did not admit to or deny wrongdoing. BLOOMBERG