Regulating Owners of Large Rental Car Fleets due to Impact on Private Hire Drivers' Livelihoods After Insolvency

6 Ms Yeo Wan Ling asked the Acting Minister for Transport (a) whether the LTA should consider regulating owners of large rental car fleets, given the impact on private-hire drivers' livelihoods if these car rental companies were to undergo financial distress or insolvency; and (b) how will the LTA work with tripartite partners, including the National Private Hire Vehicles Association, for an orderly transition and to safeguard drivers’ livelihoods in such circumstances.

The Senior Minister of State for Transport (Ms Sun Xueling) (for the Acting Minister for Transport): We are deeply sympathetic towards the plight of drivers who are affected by the Autobahn business failure. We recognise the impact large car rental companies have on drivers' livelihoods when such companies become financially distressed or insolvent.

That is why, when the Autobahn situation happened, the Land Transport Authority (LTA) worked swiftly with the National Taxi Association (NTA), the National Private Hire Vehicles Association (NPHVA) and the point-to-point (P2P) operators to help affected drivers secure other vehicles and earning opportunities. If drivers wish to seek civil recourse, the National Trades Union Congress (NTUC) also has a legal clinic to provide legal advice to members, including on contractual issues.

Availing of such support does not require car fleet owners to be regulated. Regulation can result in increased compliance burden and ownership cost for private hire vehicles which could likely be passed through to drivers and passengers.

Mr Speaker: Ms Yeo Wan Ling.

Ms Yeo Wan Ling (Punggol): Thank you, Speaker. With the growing number of private hire drivers renting their vehicles from third party rental companies, many are actually subjected to non-standardised and often onerous rental contract terms. This includes, for instance, high excesses for vehicle damage and unclear clauses governing termination, as in the Autobahn case, penalties or the withdrawal of driver benefits.

What more can the Ministry or the LTA do, working with NTUC, the NPHVA and the NTA to equip our drivers to better understand and compare rental agreements, so that they can make informed decisions and avoid unfair contractual terms.

The other one too, is whether or not, such contract literacy and consumer protection guidance can actually be incorporated into the curriculum for our vocational licences.

Ms Sun Xueling: I thank the Member for raising the questions. LTA will work with the associations to increase drivers' awareness of their rental contract terms so that they are more aware of their contractual rights and obligations.

On her second point, LTA will set up a workgroup to review the vocational licence curriculum and this review of the curriculum will include the recent Platform Workers Act and its relevant protections. We are also open to including in the curriculum, education on contractual matters.

Mr Speaker: Mr Ng Chee Meng.

Mr Ng Chee Meng (Jalan Kayu): Thank you, Mr Speaker. I declare my role in NTUC as the Secretary-General. In this case, Senior Minister of State, NTUC's affiliated platform workers associations – NTA and NPHVA – stepped in almost immediately together with the tripartite partners to assist the drivers and provided a timely support, especially in arranging new cars to continue with their livelihood.

But even then, I know that even many of the drivers are concerned about losing their deposits, ranging from $500 to $1,000. This is not a small sum to many of my brothers on the ground. Would there be some measures to ensure that owners of large rental fleets, to get them to ring-fence some of the funds, so that in the event of insolvency, these deposits for drivers can be safeguarded?

Ms Sun Xueling: I thank the Member for his question and also his suggestion. With regard to ring-fencing, it is quite close to what the earlier Member had shared. It is along the same lines as to whether or not there can be regulations, whether or not the car dealer industry should be regulated. I had shared in my earlier reply that this can lead to increased compliance burden, which can eventually find its way into becoming higher cost for drivers as well as passengers.

That said, I recognise the difficulties that the current set of drivers who are impacted by the Autobahn situation face. The matter is now before the High Court, but because these drivers are unsecured creditors, it is likely that they will face difficulties getting their deposits back.

And that is why, I think moving forward, we need to work closely with the associations to see how to better equip our drivers about what they understand about their rental contracts.

And where these drivers who are currently impacted face financial difficulties, I think we can work together to see and together with community help, see how we can best help these drivers.

I would also like to add that I think most importantly, which is what LTA has done together with NPHVA and NTA, is to quickly secure new earning opportunities for the drivers, which is what has been done together as a tripartite group to quickly work with GrabRentals, CDG Rent-A-Car, to make sure that the affected drivers are able to secure new vehicles at good contractual terms, so they can quickly get back onto the roads and to continue earning an income.

Mr Speaker: Last supplementary question. Mr Patrick Tay.

Mr Patrick Tay Teck Guan (Pioneer): Can I just suggest to the Senior Minister of State that perhaps, the Ministry of Manpower (MOM) short-term financial assistance for those workers that are in need, may possibly be extended to this group as well, since the company is being liquidated or some scheme arrangements being carried out? For consideration.

Ms Sun Xueling: Thank you for the suggestion. Let me consult with my MOM colleagues.