PHV drivers in S'pore stranded after rental cars get towed & repossessed

Private Hire Vehicle (PHV) drivers saw their rental cars being repossessed and towed over the last week, after Autobahn Rent A Car, a company with a fleet of vehicles for hire, and its linked companies had their application for a temporary suspension of obligation dismissed.

Many PHV drivers who held deposits and rented Autobahn-linked cars on a daily or weekly basis were stranded without work, affecting livelihoods as the year comes to a close.

Autobahn's court proceedings

According to The Straits Times, Autobahn Rent A Car and its linked companies have a fleet of 1,700 vehicles which are rented out on hire-purchase.

The group applied for creditor protection which included a six-month moratorium, to pause their debt payments to 58 creditors to which they owed S$371.5 million, reported The Business Times.

The largest sums owed were to DBS with S$102.6 million, Teck Wei Credit at S$74.2 million and Toyota Financial Services with S$43.1 million.

On Dec. 26, the High Court rejected the application, which would have provided the group protection against creditor actions and rights, restructuring the business under a scheme of arrangement.

This High Court ruling allowed for creditor actions and insolvency proceedings that may incorporate liquidation, reported BT.

Right to repossess cars

An automatic moratorium, a legal pause of 30-days typically given when a restructuring agreement is filed, lapsed on Dec. 26.

Therefore, as the cars belong to the rental company, Autobahn, who has failed to service their debts, the creditors listed above have the right to repossess assets like the cars still rented by PHV drivers.

On Dec. 29, the group filed an appeal on the decision and requested for expedited court hearings, reported a BT update.

The appeal filing involved a potential SGX-listed investor which had indicated interest in the group, and could supposedly save the company from liquidation.

PHV drivers aghast

In a Dec. 29, Facebook post to the group Professional PHV Drivers Singapore, many drivers shared their thoughts on the towing of rental cars.

The drivers also asked if the National Private Hire Vehicles Association (NPHVA) could step in "to protect PHV livelihoods".

In a separate Facebook post, on Dec 28, many commenters questioned if they would get their rental payment and car deposit back after the car had been towed.

Another Facebook post on Dec. 30, warned renters to clear out their cars and to not owe the company more than the current deposit.

A user named Wu Xiao Ming detailed his conversation with an Autobahn representative, alleging that the company asked him to "pay last week's rental and they will give me this week rental for free in order to offset the deposit".

According to an explainer post by former Singapore presidential candidate Tan Kin Lian, the deposit paid by the hirer of the vehicle ranges between "S$500 for a used car and $1,000 for a new car".

Earlier on Dec. 26, Autobahn Management posted a letter on Facebook to reassure their customers about the outcome of the High Court hearing and the dismissed application.

"During this period, the Company's business operations will continue as usual.

Vehicle usage and hirer arrangements remain in force, and all services will continue to operate under normal terms."

However, Autobahn website's section on car rental services has been modified, displaying a "coming soon" message when you click on "Browse for cars".

Ride-sharing companies monitoring the situation

Responding to Mothership's queries, a Grab spokesperson stated that they are aware of the situation and will contact affected parties.

"We've heard about what's happening with Autobahn and will be getting in touch with the affected driver-partners to see how we can help them with the transition and get back on the road."

The statement also provided contact details for Grab's partners in case any driver-partner requires a car at short notice, linked here.

Answering to Mothership's request for statement, a Tada spokesperson stated that they were "aware of the situation involving Autobahn and its creditors".

"We will continue supporting our drivers and provide assistance wherever possible to ensure their experience with us remains safe and reliable".

Top photo from Professional PHV Drivers Singapore/Facebook and Autobahn Rent A Car/Facebook.