Two local motor companies have bought Uber-owned Lion City Rentals, marking the ride-hailing firm's complete exit from Singapore
Uber's Lion City Rentals finally sold Cars from Lion City Rental seen at Singapore Sports Hub's carpark, on Sept 25, 2018. PHOTO: ST FILE

Two local motor companies have bought Uber-owned Lion City Rentals, marking the United States ride-hailing firm’s complete exit from Singapore.

WayDrive Holdings, a new joint venture between vehicle trader Motorway Group and investment vehicle Toh Motors, signed on the dotted line on Friday evening to acquire 100 per cent of Lion City Rentals for an undisclosed sum.

The Straits Times understands the transaction involves some 8,000 cars that are two years old and older, and an acquisition price of around $350 million.

When contacted, Motorway chief executive Michael Lim said the deal will include the takeover of about 150 Lion City Rentals employees, as well as its rented premises.

Asked why he was buying over the company when the market is deemed over-supplied with cars, Mr Lim said: "Eighty per cent of LCR cars are rented out.

"We are also in talks with Grab and Gojek to supply them cars. We will have a fuller picture in two to three weeks' time."

Mr Lim said the acquisition has been four to five months in the making, and that there were at least two other motor dealers who were in talks to buy over LCR.

The deal comes eight months after Uber and ComfortDelGro called off an agreement for the local taxi giant to purchase a 51 per cent stake in Lion City Rentals for $642 million.

ComfortDelGro’s purchase agreement was inked in December 2017. Three months later in March 2018, Uber announced its exit from the South-east Asian market.

Uber did not respond to press queries on Saturday, but a spokesman said last September that "Lion City Rentals continues to partner with thousands of drivers and hirers every day in Singapore and remains committed to the market".

In an e-mail sent to employees on Friday, Uber chief international business officer Brooks Entwistle described the deal as "good news for Uber and WayDrive... and great news for Lion City Rentals employees and customers".

He said Lion City Rentals' "business fundamentals are solid".

In another e-mail to driver-hirers, Lion City Rentals said the transaction "will not result in any changes to your experience", and that there would be no change to their contracts.

Although some industry players expect Motorway's Mr Lim - known for his business acumen - to turn the loss-incurring Lion City Rentals business around, others are surprised by the deal.

One said: "Drivers today prefer fuel-efficient hybrid cars. Most of their (Lion City Rentals) cars are not hybrids.

"And in this business, a two-year-old car is considered old. Each week, these cars can clock up to 10,000km, as the drivers drive for 10 hours a day or more to survive."