Straits Times: oBike users unlikely to get back deposits, as firm undergoes liquidation

Written by admin | June 27, 2018

JUN 26, 2018, 8:45 PM SGT

Adrian Lim
Transport Correspondent

SINGAPORE – With bicycle-sharing operator oBike now in liquidation in Singapore, the chances for users to get a refund of their deposits are slim, say lawyers.

It is unclear how many people have unreturned deposits – up to $49 – which they placed with oBike to rent its two-wheelers, although some 260 customers have lodged complaints with the consumer watchdog against oBike so far this year.

Lawyer Steven Lam, a director at Templars Law, said when liquidators distribute the assets of a company to pay off its debts, the end users – who are unsecured creditors – are usually last in the pecking order.

“It means they may not get back a single cent,” Mr Lam told The Straits Times.

The Business Times reported that oBike chalked up a loss of more than $4 million last year (2017), and owes unpaid fees to various service providers, including an unnamed logistics firm and a public relations agency, Ruder Finn.

When asked about oBike’s financials, a source close to the company referred ST to the as yet to be named liquidators.

The source, which requested anonymity, would only say: “The local (Singapore) team will do the best to refund users but it will hugely depend on the liquidator.”

Farallon Law Corporation’s managing director Nicolas Tang said none of oBike’s customers would be able to sue for the return of deposits during the liquidation process, when any legal action against oBike is not allowed under the Companies Act.

“This is to prevent any further deterioration of oBike’s financial position,” Mr Tang said.

Noting that oBike users have limited recourse at this stage, Mr Tang said they could consider pooling resources to engage a law firm to represent them as a class of users in the liquidation proceedings.

In a statement shared via its app, oBike cited difficulties in meeting the new requirements and guidelines by the Land Transport Authority to curb indiscriminate parking.

LTA will open 2-month window for bike-sharing operators to apply for licence; recalcitrant users face 1-year ban

However, this would be time consuming and long drawn, and “it is likely that their legal costs would be higher than their deposits”, Mr Tang added.

News of oBike’s liquidation came a day after it made an unexpected announcement on Monday (June 25) that it was ceasing operations in Singapore.

The reason it gave was that it foresaw difficulties in meeting upcoming Land Transport Authority licensing requirements.

The Consumers Association of Singapore (Case) said on Tuesday (June 26) most of the complaints it has received were lodged within the past two days, mainly about the non-return of deposits that were asked for months ago.

Concerns have also been raised about the personal data collected by oBike, which previously claimed that it had one million users.

Tech lawyer Bryan Tan of Pinsent Masons MPillay said: “Under the Personal Data Protection Act, if a company has collected data and the purpose for which it is being used comes to an end, the firm is required to delete it.

“The officers of the company are also personally responsible for that compliance.”

Chinese-owned oBike, which rolled out in Singapore in January last year (2017), had an office in Commonwealth Lane, and at least 20 staff.

ST understands that no oBike employees have lodged any salary-related claims with the Ministry of Manpower.