Both Toyota Financial Services and Shriram Transport Finance have stopped extending auto loans to web-based taxi services such as Uber in the wake of a government ban on venture-backed taxi app companies in New Delhi, India, according to a Financial Times report.
Back on November 9th, Uber announced that it was moving into Asia for the first time by extending its vehicle financing program to Uber drivers in India. The plan would offer what Uber’s website calls “vehicle financing schemes with low down payments, superior finance rates, and faster turnaround times,” through finance partners as Shriram Transport Finance, AU Financiers, and Toyota Financial Services.
However both Shriram and TFS have reportedly pulled the plug on financing over fears that drivers who bought cars with loans may find it hard to make payments with no business after authorities banned web taxi services in New Delhi, India.
Umesh Revankar, chief executive of Shriram Transport Finance, a company that has financed about 100 cars with Uber and similar companies said, “We will wait a while before financing loans to cabs associated with such companies and let things settle. Delinquency in overall industry is about 5 per cent in commercial vehicles financing, which may go up due to nationwide bans.”
The government issued the ban on Uber — which was later extended to other similar private taxi companies — in early December. the reason was allegedly misleading consumers after a driver for the San Francisco-based company was accused of assaulting a female passenger.
Although Uber originally announced its partnerships in India on the company’s blog, there is no mention of the government ban or loss of finance partners on Uber’s site as of yet. The company did write a post to announce that Uber has begun “a global review to assess the areas where greater investment is required.”
