It has been doing so implicitly for the past year. Now, Uber is making it quite explicit that it is targeting people who want to own a car but cannot afford the 40 per cent to 50 per cent down payment required by law.
In press advertisements yesterday, the San Francisco-based transport app provider marked its third anniversary in Singapore by launching a bold car-financing scheme that seems at first glance to flout regulations introduced by the Monetary Authority of Singapore (MAS) three years ago.
It says Uber consumers can secure loans of up to 80 per cent of the car’s price, claiming: “Your dream car is now within reach!”
Uber, which is no stranger to controversy the world over, said the deal does not break any law in Singapore. It stated that cars must be registered under a company name, and under a scheme that allows them to be used for offering paid rides – even if not with Uber.
“The government scheme applies to personal cars only,” Uber Singapore general manager Warren Tseng said.
MAS concurred: “MAS’ motor vehicle financing restrictions do not apply to loans for the purchase of private-hire cars. Drivers should be aware that they will incur additional costs, including higher insurance premiums, should they enter into such arrangements.”
Mr Tseng claimed, however, that Uber has “negotiated deals with insurance partners which can offer premiums at as low as $1,300 (per year) for a comprehensive insurance package which covers personal and private-hire use”.
Industry sources said premiums for private-hire cars are typically three to five times that of those for normal private cars.
Checks by The Straits Times also revealed higher interest charges. For instance, Fu Yiap Motor Trading, one of several used car dealers Uber has paired with for this deal, quoted interest rates of between 2.98 and 3.25 per cent – more than one percentage point higher than what leading lenders are quoting.
A customer borrowing $60,000 over five years would end up pa- ying some $4,000 more.
While the deal is not tied to any obligation to drive for Uber, Mr Tseng said the scheme “gives people a way to afford a car… earning money in their spare time and also helping to cover car costs”.
Industry watchers are not impressed. Mr Neo Nam Heng, chairman of diversified motor group Prime, said: “It is no big deal. Uber is merely a match-maker, bringing customers to these car dealers. Of course it hopes that these people will end up doing Uber rides.”
This article was first published on March 30, 2016.
Get a copy of The Straits Times or go to straitstimes.com for more stories.
