Parliament: Bike-sharing companies may be required to pay security deposit in future

Senior Minister of State for Transport Janil Puthucheary noted that following oBike's exit, competitor Mobike announced it was waiving the need for user deposits, and that none of the firms operating here now requires deposits.
Senior Minister of State for Transport Janil Puthucheary noted that following oBike's exit, competitor Mobike announced it was waiving the need for user deposits, and that none of the firms operating here now requires deposits.PHOTO: ST FILE

SINGAPORE - The Land Transport Authority (LTA) will consider requiring bike-sharing operators, which require users to pay a deposit, to themselves pay a security deposit or bond, with the introduction of licensing regulations in October this year.

Senior Minister of State for Transport Janil Puthucheary said this in Parliament on Monday (July 9) in response to questions from several MPs on the refunding of deposits for oBike users, and what recourse consumers have should bike-sharing firms exit the industry in future.

oBike announced abruptly that it was closing here two weeks ago, leaving its 100,000 users wondering what would happen to their deposits, which totalled about $6.3 million, according to oBike chairman Shi Yi.

Dr Janil noted that following oBike's exit, competitor Mobike announced it was waiving the need for user deposits, and that none of the firms operating here now requires deposits.

“If there are operators which require user deposits when the licensing regime is implemented from October this year, LTA will study the need for bicycle-sharing operators to place a security deposit or performance bond,” he added.

Noting that the Land Transport Authority (LTA) and the Consumers Association of Singapore (Case) have met oBike following its closure, Dr Janil said the onus is on the now-defunct firm to have a “concrete plan” to refund its users and remove its bicycles from public space.

He said oBike’s Mr Shi had “publically and personally” committed to a full refund of user deposits, and that the firm is now working with Case on the matter.

 
 

Dr Janil added Case had advised affected oBike users to file proofs of debt with business advisory firm FTI Consulting, which was appointed last Thursday (July 5) as oBike’s provisional liquidators. 

FTI Consulting said it would discuss the issue of whether customers would be refunded with oBike and its shareholders.

Responding to Ms Lee Bee Wah (Nee Soon GRC), who asked whether oBike could be forced to delete its user data, Dr Janil said the firm, in compliance with the Personal Data Protection Act, should delete all its user data once the issue of refunds is settled. 

Mr Seah Kian Peng (Marine Parade GRC) asked whether the light touch approach taken by the Government towards the bike-sharing operators had been “too light”.

In response, Dr Janil noted that the business model of bike-sharing operators has existed for only slightly over a year in Singapore, and that its advantages – such as helping commuters make last-mile journeys – should not be discounted. 

Imposing a licensing regime on bike-sharing operators is intended as a “recalibration” of the light touch previously taken, he said.

“We had deliberately adopted a light touch regulatory approach at the start, so as not to kill off this new innovative business model prematurely,” said Dr Janil. 

“Now that we have actual experience of both the benefits, and the significant social disamenities caused by indiscriminate bicycle parking, we have decided to tighten regulations.” 

First announced in March, the new licensing regime will place caps on the fleet sizes of each bike-sharing firm, which will also have to ensure that its users park responsibly or face fines.

Besides a one-time application fee of $1,500, firms will also have to pay a $60 licensing fee for every bicycle deployed.

The LTA said on Sunday that seven companies - Anywheel, GBikes, GrabCycle, Mobike, ofo, Qiqi Zhixiang and SGBike - had applied to offer bike-sharing services here under the new licensing regime.

The LTA is reviewing these applications and will announce the results of the applications in September.