Jakarta Globe, Bhavan Jaipragas, Oct 13, 2014
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A smartphone displaying the Uber app of the timing and availability of taxis within
the area at Raffles place financial district in Singapore. (AFP Photo/Roslan Rahman) |
Singapore.
Southeast Asia’s notorious taxi market is undergoing a shakeout as Uber and
homegrown mobile booking applications gain popularity in a region that has long
endured inefficient cartels and price-gouging drivers.
San
Francisco-based Uber, which allows customers to hail taxis or private vehicles
via smartphones and pay with a credit card, is expanding rapidly in the region
while fending off legal and regulatory challenges in various markets across the
world.
Founded in
2009 and backed by Google Ventures, the investment arm of the Internet giant,
Uber now operates in Malaysia, Indonesia, Thailand, the Philippines and Vietnam
after first entering Southeast Asia in Singapore last year.
The firm,
whose valuation was placed at $18.2 billion after an investment drive in June,
employs smartphone and satellite technology to match taxi supply and demand.
A list of
the world’s 10 worst cities to hail a taxi compiled by industry website
tourism-review.com in March included Jakarta, Kuala Lumpur, Manila, Phnom Penh
and Bangkok.
In
Singapore, locals grumbled in pre-Uber days about vanishing taxis during peak
periods, with cabbies refusing to pick up roadside passengers while waiting to
earn extra fees from reservations made via antiquated phone-in booking systems.
In some
cities, it was not uncommon for cabbies to demand exorbitant fares before
taking passengers at peak periods, during heavy rain and floods, or at times of
day when taxis are scarce.
Regulatory
tangles
Uber
executives say they welcome competition and are more than ready to go head to
head with the likes of Malaysia-based GrabTaxi, Indonesia’s Blue Bird, and Easy
Taxi, a regional player backed by German startup incubator Rocket Internet.
“As long as
people are giving people options, that’s a good thing,” Michael Brown, Uber’s
Southeast Asia general manager, told AFP in an interview.
“What makes
Uber bristle is when special interests try to protect monopolies and keep new
entrants and new competitors out,” said Brown, who is based in Singapore.
Despite
threats to have it banned in Jakarta and Kuala Lumpur, Uber continues to
operate there.
The firm is
also facing legal threats in San Francisco and other major cities including New
York and Frankfurt.
It is has
also run into opposition in Seoul, where officials believe it should follow
South Korean laws regulating taxi or rental car companies.
“Uber
insists that it is acting as an online broker connecting drivers and customers
rather than acting as a rental car company,” a Seoul city official told AFP.
“We do not
agree with their characterization of their business.”
Authorities
in Kuala Lumpur and Jakarta also say its car-hailing service makes use of
private vehicles that do not comply with strict regulations that traditional
taxi operators come under.
Uber has
vehemently denied the accusations.
The firm
does not own its own limousine or taxi fleet. Instead, its app allows customers
to summon cars in its network, usually from a private car company.
It takes a
cut of the total fare from the driver, which is paid electronically. Other taxi
app players allow their members to take cash.
“Up to this
day our principle remains that this taxi service is illegal,” Muhammad Akbar,
head of Jakarta’s transport authority, told AFP.
In
Malaysia, authorities say they began a crackdown on private cars using Uber on
Oct. 1, fining drivers up to 10,000 ringgit ($3,070).
Giving
people options
Commuters
and market analysts say unyielding bureaucrats are not seeing how taxi apps
like Uber have the potential to significantly improve the standard of living of
city dwellers.
Jakarta resident
Winda Rezita said the arrival of Uber in the Indonesian capital was a relief.
“When I am
too lazy to drive in Jakarta’s heavy traffic jams or when there’s a long taxi
queue at the mall, I just switch on the app,” the e-commerce business founder
told AFP. “It’s so much better than waiting outside a building or standing in a
long queue.”
Daphne
Kasriel-Alexander, a consumer trends consultant at research firm Euromonitor
International, said “inadequate and overburdened public transport systems”
coupled with the emergence of more middle-class consumers have boosted the
usage of taxi-hailing apps in Southeast Asia.
Expansion
plans
GrabTaxi,
which first launched in Malaysia in 2012 and has since expanded to Singapore,
the Philippines, Indonesia, Vietnam and Thailand, is aiming for further growth.
Unlike
Uber, the firm, backed by Singapore state investment firm Temasek Holdings, 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 it has not been flagged by authorities.
“We’re the
leading taxi booking app in Southeast Asia including Singapore, and we are
well-positioned to extend our lead,” Lim Kell Jay, GrabTaxi’s general manager
in Singapore, told AFP.
The firm
says it gets one taxi booking every two seconds in the whole region, with more
than 300,000 people using it at least once a month.
Taxi
drivers say they hope the intense rivalry between the apps will continue.
A
Singaporean taxi driver who only wanted to be known as Tan said his revenue has
increased by 20 to 30 percent since he signed up with UberTaxi last month.
The service
connects Uber users to registered taxis, just like rival GrabTaxi.
“With the
apps like Uber, it’s like a win-win. You (passengers) wait around less, and we
drivers don’t have to roam around hunting for passengers, saving time and
petrol,” he told AFP.
Agence
France Presse
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