For nearly two years, Uber has offered a car leasing program that aims to remedy one of the biggest obstacles for those who wanted to sign up as a driver, but didn’t haven anything to, you know, actually drive. While some Uber drivers have expressed their frustrations with the Xchange Leasing program, a new report suggests that those taking part in similar programs outside of the U.S. are facing more than high monthly payments; they’re dealing with allegedly defective and dangerous vehicles.
The Wall Street Journal reports that’s because many of the cars provided by Uber, at least in Singapore, were part of a recall and never repaired.
The ensuing debacle was just one of the issues Uber has faced in recent years; from now-departed and often maligned CEO Travis Kalanick to alleged sexual assaults by drivers, and a top-secret algorithm to avoid the law.
Still, the thousands of unrepaired recalled cars left on the streets of Singapore, and their proclivity to catch fire, left drivers and passengers in a new type of danger. The WSJ’s report offers a deeper dive into Uber’s leasing issue in Singapore, but here are four things we learned.
Singapore served as Uber’s first entrance into the Asian market back in 2013.
That debut, however, was marred with issues, as documents reviewed by the WSJ show the company struggled to find drivers, as owning a car in the city is significantly more expensive than elsewhere.
In order to move forward with the Singapore rollout, Uber created a leasing unit called Lion City Rentals in Feb. 2015.
Under the program, Uber would spend tens of millions of dollars to buy vehicles and rent the cars to drivers for about $50 per day, the WSJ reports.
In purchasing cars, the WSJ reports that Uber didn’t turn to authorized dealers, but instead small auto import dealers, where they could pay about 12% less for the cars.
Although Uber may have been able to save a bit in purchasing cars from the importers, the WSJ notes that safety, service, and legal contracts are difficult to enforce with such dealers.
Still, Uber allegedly assured drivers that the rentable cars were in “perfect running condition.”
Among these cars were about 1,000 Honda Vezel SUVs.
The WSJ reports that on April 4, 2016, Honda recalled some of these new vehicles over an issue with an electrical component designed to shut off the engine when the vehicle was idle. The issue, Honda said, could cause the vehicle to overheat. The carmaker advised owners to get the vehicles serviced as soon as possible.
An internal report from Uber shows that the company had purchased some of these vehicles from a dealer called Sunrita, which informed the ride-hailing company of the recall.
Sunrita estimated that it would replace the affected parts by the end of August. But another email shows this didn’t happen, as Sunrita said there was a shortage of parts.
Despite the recall, Uber continued to buy the recalled Vezels. In fact, documents viewed by the WSJ show that 1,065 new Vezels were added to the company’s lineup.
While Uber sent emails to Sunrita trying to expedite the recall repair, the company continued to lease the potentially dangerous vehicles.
A lawyer for Sunrita tells the WSJ that the Uber’s leasing unit requested that the dealer produce replacement parts, which the company says it did when they were available.
A Dangerous Ride
In mid-January of this year, consequences of the Honda recall reared its head in the form of a fire in one Uber driver’s Vezel.
According to an accident report, an Uber driver picked up a passenger at 1:30 p.m. and drove for 19 minutes. Just as soon as the passenger had been dropped off, the driver smelled smoke and flames began to erupt out of the car’s dashboard.
The driver was unhurt in the incident, but the car suffered significant damage.
The WSJ reports that the incident quickly raised questions at Uber, both in Singapore and at the company’s headquarters in San Francisco.
The problem was amplified after the company’s insurance provider said it wouldn’t cover the cost of the damage because of the known recall, emails viewed by the WSJ note.
An internal report suggested that there “is clearly a large safety/responsible actor/brand integrity/PR issue,” at play, as the company began assessing its legal liability.
There appeared to be a divide growing on how to deal with the recalled vehicles. While some managers wanted to take them off the road, others argued that such plan would simply cost the company too much and leaving them on the road seemed like a low risk.
“Asking drivers to give up their keys with no suggested fix will send panic alarm bells to the mass market,” one manager wrote in an email.
In the end, the cars stayed on the road. However, Uber asked drivers to bring the vehicles into repair shops where the faulty part was disabled. The WSJ notes, though, that this measure was not authorized by Honda.
A spokesperson for Uber tells the WSJ that the company notified affected drivers and asked them to bring in vehicles that same week.
Still, some drivers tell the WSJ that the message from Uber failed to adequately address the issue, as it wasn’t clear why the vehicle needed urgent servicing. One driver referred to the recall as “hush-hush.”
Since the recall process began earlier this year, Uber says it has worked to improve tracking of automaker recalls and stopped buying vehicles from importers.
“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,” said the Uber spokesman. “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.”
Consumerist has reached out to Uber for comment on the WSJ report. We’ll update this post if we hear back.