Uber should be embraced

PUBLISHED : Saturday, 16 May, 2015, 12:33am
UPDATED : Monday, 17 August, 2015, 10:16am

Getting a taxi in any mainland city during rush hour or when it's raining is near impossible. The global cab-hiring service Uber was therefore bound to step into the market, joining mainland counterparts in making trips more reliable, comfortable and convenient. Authorities have taken a dim view, though, following up a nationwide ban in January on private cars offering taxi rides and a crackdown on smartphone apps with raids on the firm's offices in Chengdu and Guangzhou. But rather than clamping down, officials should be embracing Uber and its ways.

There is no argument that rules have been broken. That is Uber's strategy: through its innovative app, competitive fares, and the use of luxury cars and creative services, it gains popularity, pressuring governments to rethink restrictions. Backed by more than US$2.8 billion in funding, the San Francisco-based firm has in a mere five years expanded to more than 220 cities in 55 countries. It pays little regard to entrenched taxi companies. That is especially problematic on the mainland, where the state regulates fares and licences.

But there are other problems with Uber, as highlighted by officials elsewhere as they try to enforce laws. Their concern rightly centres on the protection of passengers. Under pressure, the company has increased insurance coverage, but extensive background checks of drivers and meeting the standards required of commercial vehicles remain contentious matters. Taxi firms that have to pay licensing fees and follow strict rules cry foul, especially when drivers get poached. The loss of business cuts into profits and puts jobs on the line.

Uber and its counterparts have shaken up the vehicle-hiring market. Competition, as economists point out, is good for the taxi industry and a population's welfare. But that can't come at the expense of safety, and passengers have to be given the best protection through regulations. Instead of fighting the competition, taxi firms should step up to the challenge by embracing technology and improving passenger services.