Bonds from Bike-Sharing Firms Seeking Deposits

Bike-sharing firms which require users to place deposits could have to place performance bonds when new regulations take effect in October, said Senior Minister of State for Transport Janil Puthucheary in Parliament yesterday (9 Jul) when replying to MPs asking about deposit refunds for oBike users.

He noted that following oBike's exit, competitor Mobike announced it was waiving user deposits, and that none of the firms operating here now require deposits.

He told the House that the Land Transport Authority (LTA) and the Consumers Association of Singapore (Case) have met oBike's management following its closure, and stressed that the onus is on the now-defunct company to have a concrete plan to refund its users and remove its bicycles from public space.

He added that Case had advised affected oBike users to file proof of debt with business advisory firm FTI Consulting, which was appointed last Thurs-day as oBike's provisional liquidators.

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

Senior Minister of State Puthucheary emphasised that the business model of bike-sharing operators has existed for only slightly over a year in Singapore, and its advantages - like helping commuters complete the last mile of their journey - should not be discounted.

Also, imposing a licensing regime on these operators is intended as a recalibration of the light touch that was taken, he added.

"We had deliberately adopted a light-touch regulatory approach at the start, so as not to kill off this new innovative business model prematurely," he said.

"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."

Source: “Bike-sharing operators seeking deposits may have to place bond”, (The Straits Times, 10 July 2018)

Photo source: The Straits Times 2018. © Singapore Press Holdings. Reprinted with permission.

The Straits Times article

Bike-sharing operators seeking deposits may have to place bond

Bike-sharing companies which require users to put up a deposit could themselves be asked to place a performance bond when new regulations take effect in October.

Senior Minister of State for Transport Janil Puthucheary said this in Parliament yesterday when replying to MPs asking about deposit refunds for oBike users.

The company closed shop suddenly two weeks ago, leaving 100,000 users wondering whether they could get back their deposits which, oBike chairman Shi Yi said, amounted to about $6.3 million.

Dr Janil noted that following oBike's exit, competitor Mobike announced it was waiving 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 said.

He also told the House that the Land Transport Authority (LTA) and the Consumers Association of Singapore (Case) have met oBike's management following its closure, and stressed that the onus is on the now-defunct company to have a concrete plan to refund its users and remove its bicycles from public space.

He said oBike's Mr Shi has "publicly and personally" committed to a full refund of user deposits, and that the company is working with Case on the matter.

Dr Janil added that Case had advised affected oBike users to file proof of debt with business advisory firm FTI Consulting, which was appointed last Thurs-day as oBike's provisional liquidators.

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

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 company, in compliance with the Personal Data Protection Act, should delete all its user data once the issue of refunds has been settled.

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

Dr Janil said the business model of bike-sharing operators has existed for only slightly over a year in Sin-gapore, and its advantages - like helping commuters complete the last mile of their journey - should not be discounted.

Also, imposing a licensing regime on these operators is intended as a recalibration of the light touch that was taken, he added.

"We had deliberately adopted a light-touch regulatory approach at the start, so as not to kill off this new innovative business model prematurely," he said.

"Now that we have actual ex-perience of both the benefits, and the significant social disamenities caused by indiscriminate bicycle parking, we have decided to tighten regulations."

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

Besides a one-time application fee of $1,500, operators 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 SG Bike - had applied to offer bike-sharing services. The LTA is reviewing the applications, and will announce the results in September.

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