Uber to face heated battle in South East Asia

Uber is facing the same issues as it crosses over to South East Asia. MAC, who recently rode in an 'Uber' car, reports on the ridesharing app's controversial journey in this part of the world.

The Uber mobile taxi booking application is starting to gain traction in South East Asia despite objections from officialdom and perhaps this should not be a surprise after Tourism Review included Jakarta, Kuala Lumpur, Manila, Phnom Penh and Bangkok in the top ten WORST countries in which to get a cab. The region is renowned for inefficient cartels, drivers who refuse to run the meter, scarcity of vehicles particularly during peak times or demand for exorbitant fares when it is raining and, of course, the antiquated booking systems.

Despite the benefits that Uber can undoubtedly bring for the average taxi user, regulatory authorities are trying to find ways to crack down on the service. Uber are currently facing legal threats from San Francisco to Hamburg to Seoul where the use of private vehicles as taxi’s is not permitted. Uber, in their defense, argue that they are “only acting as an online broker connecting drivers and customers rather than acting as a rental company. We do not agree to their characterisation of our business”.

In a recent interview, Michael Brown, Uber’s South East Asia Manager based in Singapore, told a reporter, "As long as people are giving people options, that's a good thing. What makes Uber bristle is when special interests try to protect monopolies and keep new entrants and new competitors out.”

Regardless of the threats to have it banned in Jakarta and Kuala Lumpur, Uber continues to operate there. Authorities in Kuala Lumpur and Jakarta agree with those in Seoul and say its car-hailing service makes use of private vehicles that are non-compliant with strict regulations that traditional taxi operators come under. Uber has vehemently denied the accusations although I don’t know how, as the Uber taxi taken by me just recently was most definitely a private car, and quite a nice one too.

Unperturbed by the arguments, the Malaysian Transport Police (SPAD) say that they are starting a crackdown on the service and offenders will be fined US$3000 when apprehended; and let’s face it, that will be easy for the authorities as all they have to do is download the Uber app and simply request a taxi. Easy money, really.

All of this news would indicate that Uber is targeting Asia as a key growth area. Just this week, in a report in the UK’s Financial Times, they announced that Uber has now launched in more than 100 cities and covers 35 countries, the most recent of which will be Mumbai, India.

In the same report, Uber’s Asia Pacific Head, Allen Penn was quoted as saying, “We’re only in Tokyo in Japan, Bangkok in Thailand and three cities in China . . . these are all places where there is a fair bit of runway going forward.

"If you want to be a global company, and Uber has that ambition, you need to be in Asia . . . There are a lot of countries in the region that we’ll have double-digit cities a year from now.”

(Read the full Financial Times article here.)

Uber is not the only taxi app on the block. There are many others that are available and are not annoying the regulatory authorities. The trouble is that they mostly utilise regular licensed cabs and, of course, as I’ve said, five of the worst places in the world to get a taxi are in South East Asia. 

One of the market leaders is GrabTaxi, which first launched in Malaysia in 2012 and has since expanded to Singapore, the Philippines, Indonesia, Vietnam and Thailand, and is aiming for further growth. GrabTaxi is backed by Singapore-state investment firm, Temasek Holdings, and has so far avoided regulatory difficulties. Its app mainly matches customers with registered taxis. A recently launched function called GrabCar allows for booking of private vehicles, just like Uber, but so far has not been flagged by authorities, which doesn’t seem very fair.

image: malaymailonline.com