Travis Kalanick no longer runs Uber, but stories of questionable decision-making at the company under his leadership continue.
The latest not-at-all-surprising revelation comes courtesy of The Wall Street Journal, which reported Thursday that Uber managers in Singapore knowingly purchased more than 1,000 vehicles that had been recalled for catching on fire, then rented them to people willing to drive for the ride-hailing service via a subsidiary called Lion City Rentals.
One of those vehicles, a Honda Vezel driven by Koh Seng Tian, caught fire in January, shortly after he dropped off a passenger. Honda issued the recall in April 2016.
Uber executives in Singapore knew of the safety issue linked to a faulty electrical component in the company’s fleet of Vezels, but kept the cars on the road while awaiting replacement parts, the Journal reported. They encouraged drivers to simply disable the part and continue driving.
That workaround, not authorized by Honda, took on some urgency after the fire. Uber texted drivers to tell them their vehicles would need “immediate precautionary servicing” within the week, yet neglected to tell them why. The message did note that Honda had issued a recall.
In a rare admission, Uber on Thursday acknowledged it should have handled the situation differently.
“As soon as we learned of a Honda Vezel from the Lion City Rental fleet catching fire, we took swift action to fix the problem, in close coordination with Singapore’s Land Transport Authority as well as technical experts,” an Uber spokesperson told HuffPost. ″But we acknowledge we could have done more ― and we have done so.”
Uber said that in the future, it will only purchase vehicles directly from manufacturers that contractually honor recalls. (Uber has bought most of its vehicles in Singapore through third-party importers, which offer cheaper prices, but take a more lax approach to recalls.)
Uber’s failure serves as a cautionary tale for ride-hailing companies, which for the most part have happily outsourced fleet ownership and maintenance to rental companies like Avis and Hertz.
In Singapore, however, car ownership is extremely expensive ― often prohibitively so. As a result, Uber departed from its typical strategy of requiring drivers to supply their own car (or rent one from one of its partners), and offered drivers cars directly.
Bloomberg reported this year that Uber’s Honda Vezels likely cost upward of $70,000 apiece. In addition to taxes, car owners have to purchase a government permit at auction, which can add $50,000 or so to the cost.
That hefty cost of buying a car, absorbed by Uber, makes driving for the company particularly attractive in Singapore, where drivers appreciate having access to the car when they’re not working.
In addition to the cost of car ownership, Singapore has an extensive, well-run public transit system and well-maintained roads, making the country a front-runner in the race to deploy self-driving cars.