Unconsumed Funds in Respect of oBike's Exit from Singapore

Miss Cheryl Chan Wei Ling asked the Minister for Transport what statutory measures are in place to prevent private companies offering shared bikes or PMDs from defaulting on their public and customer commitments, such as service provision and deposits before the company goes into liquidation.

Miss Cheng Li Hui asked the Minister for Transport (a) whether there are safeguards in place for consumers to obtain refunds on their oBike deposits; (b) what recourse do consumers have should there be no refunds; and (c) how can the interests of consumers be protected when bike-sharing firms exit the market.

Mr Speaker, oBike's sudden exit from Singapore has inconvenienced many Singaporeans. It has raised some concerns and questions. Let me address them comprehensively.

First, oBike has attributed its decision to Government over-regulation. I suppose that is a convenient excuse. Dockless bicycle-sharing services offer Singaporeans a convenient travel option. We had deliberately adopted a light touch regulatory approach at the start, so as not to kill off this new innovative business model prematurely. 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. The Land Transport Authority (LTA) will license bicycle-sharing operators under the Parking Places Act, so that only operators with responsible and sustainable bicycle management plans can operate in Singapore. The licensing regime will reduce indiscriminate parking by requiring operators to internalise the costs of the social disamenities caused by their businesses, failing which, they should not be operating at all.

We are mindful to minimise compliance costs for operators, as they could, in turn, be passed on to users. LTA finalised its regulations only after extensive consultation with the bicycle-sharing operators, including oBike. We note that several operators have expressed their support for the new regulations.

Our licensing regime will kick in by October 2018. Licence applications closed on 7 July 2018 and LTA has received seven applications. LTA will evaluate each application based on the strength of the proposal, especially the plans to minimise indiscriminate parking.

Secondly, allow me to speak about the consequences of oBike's sudden exit from Singapore. LTA and the Consumers Association of Singapore (CASE) have met oBike to emphasise the importance of refunding user deposits and removing their bicycles from public spaces. On 1 July 2018, about one week after oBike announced its exit, oBike's Chairman Shi Yi had publicly and personally committed to a full refund of user deposits. oBike is now working out a process with CASE to refund user deposits. I would like to emphasise again that it is oBike's responsibility to have a concrete plan to refund user deposits and remove its bicycles from public spaces. If LTA has to step in to remove its bicycles, we will impose fees on oBike for doing so. LTA and CASE will continue to engage oBike on its responsibilities.

Concurrently, as the company is in liquidation, CASE has advised that affected consumers should file their Proofs of Debt against oBike with the appointed liquidator, FTI Consulting. Those who are unsure about how to file a Proof of Debt may contact CASE or the appointed liquidator for assistance.

Following oBike's exit, MoBike announced on 29 June 2018 that it would be waiving deposits for its Singapore users. With this change, none of the licence applicants require user deposits. If the operators eventually do 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.

Going forward, LTA will monitor and strengthen the licensing regime as necessary, as well as work with relevant organisations, such as the Personal Data Protection Commission, CASE, the National Parks Board and the Town Councils on public education and outreach, so as to strike the right balance between the viability of the industry and the interests of users and the general public.

Just a few supplementary questions for the Senior Minister of State. First, I thank the Senior Minister of State for sharing that the subscribers to oBike will have some recourses that the Ministry will look at together with CASE. I wonder, given that the large number of subscribers that are affected, I understand close to a million, whether something could be done proactively to make it easier for each of these subscribers to get their subscription fees reimbursed, given the huge numbers involved.

My second supplementary question is, I understand the light touch that the Ministry and, for that matter, the Government has adopted, to allow all these new innovations to take place. But I guess a learning point from this episode is that we may need to recalibrate this light touch in the quest to bring these conveniences to consumers. We have seen the bad side of this happening. And this comment goes beyond the Ministry of Transport (MOT), rather the whole of Government, for any new innovations that are being introduced. We need to just be aware that, sometimes, the light touch may be too light.

I thank Mr Seah Kian Peng for the questions. The first, whether it can be easier to get refunds, it is ultimately oBike's responsibility to refund the user deposits and I think we should not minimise that it is something for them to settle, something for them to seek out means and ways to serve their consumers and serve their customers as best they can. We will continue to watch that space.

As far as the light touch is concerned, I do agree with the Member. I pointed out, it has not actually been that long since these business models appeared; it is just over a year. From a business point of view, there does need to be some runway for the business model to evolve, for the finances to be settled down, so we have to get the balance correct.

Where there are issues which are critical or dealing with personal safety, yes, we should be far more aggressive. Where it is about social disamenities and behavioral change, perhaps we also need to learn the lessons so that, as a regulator, as well as potential future operators, we can find a way to best serve future customers and consumers of such a service. Because, ultimately, these types of bicycle-sharing services are good for us because it will allow Singaporeans to make use of bicycles to close that last-mile gap in personal transport. It is also good for health; it is a possible leisure activity. So, we do not want to remove these services in particular, and I think the general point that the Member is making is about how we need to have the right calibration between a light touch approach as well as leaving room for innovation and dealing with the social disamenities is absolutely correct. That is exactly what we are doing now. The imposition of this new licensing regime is a recalibration of the light touch that we have taken in this phase.

Mr Speaker, Sir, I would like to ask the Senior Minister of State how many oBike users are there, and can MOT force them to delete away all the users' data so that their data are not abused?

Certainly, oBike, like all private companies, will need to comply with the Personal Data Protection Act. So, when they have no longer any use for the data that they have collected on their customers or their subscribers, and once they have settled all the issues with refunds and so on and so forth, there should be a full expectation that they remove all that data.

The other question was how many accounts they have. They had a fleet size of 20,000 to 30,000, and oBike has reported that they had just over a million users.

Mr Speaker, the media reports do say that oBike says that they have about a million users and, if indeed most of them had paid deposits to oBike, then there is quite a large sum of money with oBike. If these funds are with oBike, then I suppose the consumers will get back their funds. But many consumers have expressed concern that after liquidation, they will not be able to receive their refunds.

In the event that the consumers are unable to receive refunds from oBike, would LTA consider making a Police report against the directors of oBike to ensure a proper accounting of the funds that should be with the company but are no longer available for refund to the consumers?

I think it is possible. But I think this issue falls under the Consumer Protection (Fair Trading) Act which is overseen by the Ministry of Trade and Industry (MTI). The short answer to the Member's question is yes. But as to how that plays out and what actions are taken and so forth, I think I would have to ask the Member to file the question for MTI as to how this might be managed in a way to serve the needs of Singaporeans as well as the businesses.

One of the things that oBike did was to force its members to subscribe to its Super VIP (SVIP) using their deposit. Will these customers be able to get a refund for these as well, because the decision to subscribe to the SVIP membership was done unilaterally without the customers' consent?

Mr Speaker, the matter as to whether or not that was done appropriately or inappropriately really depends on the terms and conditions of the service agreement. I do not know if it would be for me to comment about whether the service agreement between the users and oBike was appropriate. Whether the practice as a whole was fair or unfair, actually again, it is a matter for MTI and the Competition and Consumer Commission of Singapore to look into and perhaps make a decision about and take further action thereafter.