Operators of app-operated transportation services like Uber and GrabCar – whose privately-owned vehicles were impounded by the Land Public Transport Commission (SPAD) for running illegal taxi services, pending a court verdict – are reportedly being chased by banks over outstanding car loans, according to The Sun.

Many of these vehicles have been bought new and were used for providing these services within the past 11 months, and even after the court orders the ownership of these cars to be removed, the owner will still have to settle the remaining loan on them.

Under Section 16 of the Land Public Transport Act 2010, it is deemed an offence to operate or provide public transport service by using private vehicles without licence, and an order for forfeiture shall be made in court. In total, 53 cars have been confiscated by SPAD under this ruling, including Mercedes-Benz, Nissan, Toyota, Honda, Hyundai, Kia, Perodua and Proton models.

"When the order of forfeiture is given, the legal and beneficial title of the vehicle shall be vested or passed to SPAD," said a SPAD spokesperson. "When the vehicle is forfeited, it becomes the property of SPAD. Like any other property, the vehicle can also be disposed of in various ways. Among others, it can either be tendered off, auctioned or sold back to the accused or previous owner at market value."

As yet, it is unclear if Uber or MyTeksi have extended legal help to the affected private vehicle owners. Hire purchase vehicles are typically not allowed to be used to transport passengers and charging a fare, as stated in the agreements.

uber-x-car

Recently, SPAD has seized 13 cars for offering illegal public transport services at various locations in the Klang Valley, including the Kuala Lumpur city centre, Sunway, Damansara, Kelana Jaya, Puchong, Bangsar and Subang through Ops Tegas. As such, the total number of cars at the SPAD impound in Sepang is now at 96 cars.

Several car owners have allegedly had their vehicles seized after family members or friends have been using their cars to offer so-called teksi sapu (illegal taxi) services without their knowledge.

Section 80 of the Act provides enforcement officers the jurisdiction to seize a vehicle that violates Section 16, according to SPAD.

"If the offender is an individual, the person shall be liable to a fine of not less than RM1,000 but not more than RM10,000 or imprisonment not exceeding one year or both," said the spokesperson. On the other hand, a company shall face a fine not exceeding RM100,000 if it is found to have fallen afoul of Section 16.