Uber reportedly continued to lease more than 1,000 vehicles that had been cited for a recall over a fire risk and after one such vehicle caught fire earlier this year on Singapore roads.
The ride-sharing operator purchased 1,200 Honda Vezel units from various parallel import companies including Sunrita, because it would cost 12 percent lower than authorised Honda distributors, according to a Wall Street Journal (WSJ) report, which cited internal documents. Rental agreements signed with Uber drivers stated that vehicles they rented were in "perfect running condition", the report said.
Uber, though, had gone ahead to purchase the Vezel units even after Honda in April 2016 released a recall advisory for the model, noting that a faulty electrical part could spark a fire. It urged owners to have their vehicles serviced.
On its part, Sunrita sent out an alert to Uber regarding the recall and said it would replace affected parts by the end of August last year. However, it failed to do so due to a shortage of replacement parts. While Uber sent e-mail messages over the following months reminding Sunrita to resolve the matter quickly, the former continued to lease the faulty vehicles to its drivers, noted the WSJ report.
Furthermore, Uber claimed that all affected Vezel units in its fleet since then had been rectified, but Singapore's Land Transport Authority (LTA) revealed that this figure actually stood at just 9 percent. Local daily The Straits Times reported Friday that the transport regulator said its figures were based on latest information provided by importers and dealers.
It was not against the law here to trade cars affected by recalls, but sellers must notify buyers of such recalls and buyers would have to acknowledge they were informed of the defect.
After an Uber-owned Vezel caught fire in January this year, the ride-sharing company's regional team in an internal e-mail suggested affected vehicles be retrieved to avoid "unnecessary risk", according to WSJ. However, the company's Singapore general manager, Warren Tseng, said doing so would incur about S$1.4 million in associated costs, including rental fees and driver salaries.
An Uber spokesperson told The Straits Times it took action to rectify the issue following the January incident and admitted it "could have done more" in response to safety recalls.
The US company had been experiencing a tumultuous year, which saw the departure of its CEO Travis Kalanick following allegations of sexual harassment in its workplace.
It also faced increasing competition in Singapore from fellow ride-sharing operator, Grab, which had been shoring up investments--including a latest US$2.5 billion round lead by SoftBank and Didi Chuxing--and expanding its presence across the region.