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oBike using customer deposits to fund operations “unethical and unacceptable”, Donald Low gets in on the issue

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The President of the Consumers Association of Singapore (CASE), Lim Biow Chuan, released a statement earlier today with regards to bike-sharing firm oBike’s misappropriation of customers’ deposits for operations and to purchase bicycles.

In the statement, he addressed most of the issues that customers had, such as those pertaining to their lost deposits, and where deposits were automatically converted into oBike Super VIP membership subscription.

The statement read, “The deposit was never intended to be used as prepayment for future services. As such, the deposit ought to have been placed in a separate account to allow oBike to refund consumers when required. The deposit should not be used to purchase assets and/or fund other operating expenses”.

In the statement CASE also added that using the deposit to fund operations was “unethical and unacceptable, as the refundable deposit acts as surety for consumers to be responsible when using the bicycle-sharing service, and should not be used for other means.”

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By converting users’ deposits into oBike Super VIP memberships, CASE also said “that oBike has breached paragraph 22 of the Second Schedule of the Consumer Protection (Fair Trading) Act, which prohibits a supplier from asserting a right to payment for the supply of unsolicited services”.

Former Associate Dean of the Lee Kuan Yew School of Public Policy(LKYSPP), Donald Low weighed in on the issue as well, while also commenting on other on-going issues.

On July 3, he shared a post on Facebook and said, “I don’t understand why people love to highlight the irresponsible choices of the poor (such as when they buy alcohol and cigarettes) when it’s the socially irresponsible choices of the rich (like those of the founder of oBike) that have a far greater negative impact on society.

Our policymakers often worry about the moral hazard of the poor if we provide more welfare for them (Edwin Tong’s recent sweeping generalisation of welfare reflects a common stereotype of the poor here). They often ignore the moral hazard of the rich because rich people are assumed to be hardworking, entrepreneurial and creative. But who can guarantee if any of these qualities is of necessary benefit to society?”

In his post, Mr Low was referring to oBike’s founding investor and chairman Shi Yi who said that his company hopes that LTA will not levy towage and storage fees if oBike fails to clear the bicycles, as its “focus right now is to refund the deposit to users”.

“Any extra cost (we incur) might affect our available funds to refund customers,” he added.

CASE has received about 1,044 complaints of users asking for their deposits back and oBike has left its fleet of 70,000 bicycles abandoned in public areas island wide.

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