What Uber did is not illegal

SINGAPORE - Before we crucify Uber for its latest public relations snafu, let us be clear on one thing: It is not illegal for motor dealers to keep selling cars which are affected by a recall. Similarly, it is not illegal for fleet owners to continue operating vehicles which are subject to a recall.

But it is one thing to be on the right side of the law, and another to be right morally. If Uber had indeed known of the fire risk that 1,200 of its cars posed, it would have been wrong if it did not inform its driver-hirers of that risk.

In Singapore, the Land Transport Authority does not ban sale of vehicles which are affectred by recalls. The authority however, requires the seller to inform any potential buyer of the defect. And the buyer must acknowledge in writing that he had been informed, and commit to taking the car back for rectification once parts are available.

This is not an unreasonable approach. Because if we are to take a hard stance, then all vehicles affected by a recall should not be allowed to be driven until the flaw is fixed.

And there are scores and scores of recalls affecting tens of thousands of vehicles each year in Singapore alone.

A hard stance would thus not only be inordinately disruptive to the economy and to the lives of millions of people around the world. It would also be prohibitively costly for manufacturers to roll out recalls since they would have to compensate for loss of use.

In such a scenario, it would not be far-fetched for carmakers to start hiding defects. And that will lead to far more sinister outcomes. Is that something we want?

In Uber's case, the scandal-riddled ride-hailing company is in the news this time for knowingly buying and renting out 1,200 Honda Vezels that were affected by a recall over a flaw that could pose a fire risk.

 

Was it irresponsible? In light of what has been leaked to the press, it would appear so. But let's give it some benefit of doubt.

 

It seems Uber's senior management wanted to take the entire Vezel fleet off the road. But its Singapore general manager Warren Tseng purportedly said that such a plan would cost the company about S$1.4 million in driver wages, rental fees and parking costs.

The company chose another route: tell drivers to deactivate the Vezel's stop-start function - the part that is faulty.

If the message was accompanied by a clear fire risk warning, and if all drivers heeded the advisory, there would have been no incident. If the stop-start system was disabled, the faulty electrical capacitor would not have a chance to overheat and cause a fire.

And as mentioned at the start, Uber - or for that matter, any fleet operator - is not legally obliged to stop using vehicles which are subject to a recall.

Furthermore, the fire risk was low. Out of some 11,000 Vezels sold here (Uber-owned Lion City Rental's fleet is but one-tenth of the population), there has only been one known case of fire. No one was injured.

In fact, the Vezel issue seems rather insignificant if we were to view it against the cases of Hyundai taxis which have burst into flames in recent years.

But because Uber has been making headlines for questionable actions of late, the natural tendency is for us to shake our collective heads and say "see, they are dishonourable".

The company may well have made various missteps in the past, but in this Vezel incident, its mistake was falling short on complete transparency.

For instance, it could have been more upfront with its drivers, and leave it to them to decide whether they wanted to switch models, or to carry on renting the Vezel with the stop-start system disabled until replacement parts arrived.

Bearing in mind that there is often a fine line between what is legal and what is moral, Uber would have done a far better job if it had erred on the side of the latter. This incident seems to reinforce the notion that the American company is not fully cognizant of the difference.