BREAKING: Uber Suspends Operations in Taiwan

BREAKING: Uber Suspends Operations in Taiwan
Photo Credit:關鍵評論網
What you need to know

Uber has faced a hostile regulatory environment in Taiwan and a growing mountain of fines.

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Uber will suspend operations in Taiwan next week amid an ongoing regulatory battle with the government.

The ride-sharing service says while it "understands the Ministry of Transportation is under pressure in terms of implementing new regulations," Uber faces "unprecedented fines" and needs to come up with another way to reopen the dialogue with the Taiwan government.

It will be suspending its ride-sharing service starting Feb. 10.

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Spokesperson Jessica Pan (潘瑞蓮) told The News Lens via phone that “currently we do not have a set timeline” for the suspension and “no press conferences will be held today."

However, the company’s food delivery service, UberEats, will continue to operate as normal as "it’s a separate operation model with different delivery services,” Pan said.

Uber has been operating in Taiwan for more than four years. By mid-2016 the company had recorded more than 15 million rides and US$94 million in revenue over more than three years in the Taiwan market, Taiwan Business TOPICS reported last year.

However, the company has been entrenched in an ongoing regulatory standoff with the government over its status; it maintains it is a technology company while successive administrations have deemed it a transport company.

By late last year, Uber had accumulated more than NT$150 million (US$4.7 million) in fines and faced numerous other charges.

While the company had managed to stay in operation, it was facing a tougher new regime in 2017.

Fresh amendments to the Highway Act proposed by government legislators passed the first reading in the Legislative Yuan, Taiwan’s Parliament, on Dec. 7, 2016. The law changes would mean that Uber could be fined as much as NT$25 million for a single breach.

The company's license plates and driving licenses might also be suspended or revoked. In addition, legislators suggested a 10 percent reward for people who reported drivers or vehicles operating under Uber, which means a maximum reward of NT$ 2.5 million.

Opposition legislator Jason Hsu (許毓仁) said last year that “the core of Uber’s dispute with the taxi industry is the government’s resistance to embrace technology and think “‘out-of-the-box.’”

“The government should work to create a mechanism whereby companies like Uber can operate legally and traditional transportation companies’ rights can be protected. Its role is to create a fair and sound competition for all businesses and put the consumers’ welfare and safety as the first priority. In this case, no such legal framework is in place yet."

Uber’s food delivery service UberEats, launched in Taiwan in mid-November, was slapped with thousands of dollars in fines on its first day of operation.

Words of warning

Late last year, Michael Beckerman, president of the United States Internet Association, wrote to Taiwan President Tsai Ing-wen (蔡英文) in response to the regulatory quagmire surrounding Uber, the world’s biggest ride-sharing service and one of the best-known Silicon Valley startups.

“We respectfully request that further action on these competition-killing proposals be halted,” Beckerman said.

The suite of measures by officials, including meteoric proposed fines and a call to block access to the Uber application from mobile app stores, amounts to an “unprecedented targeting of a leading technology company and would effectively shut down ridesharing in Taiwan,” Beckerman said.

Commenting on the government’s proposed regulatory treatment of Uber, Beckerman said, “If these proposals move forward in their current form, we fear this will only give Taiwan a black-eye by drawing up a blueprint regarding how to most effectively protect monopolies and cartels from the consumer-oriented power of the internet.”

Taiwan’s “digital minister” Audrey Tang (唐鳳) – a cabinet-level minister without portfolio with responsibility for the digital economy and open government – met with Uber board member and strategic adviser David Plouffe, who was in Taiwan last November.

Speaking at a forum on how Taiwan’s government could further develop its digital economy, Plouffe said that the Uber debate was one that had been settled in most countries, including Brazil, the Philippines and Malaysia.

Plouffe believes that Taiwan has the benefit of being able to refer to regulations used by other countries, most of which are very similar, to decide what laws are applicable and required in the local market.

“All of this could be settled in a day,” he said.

In June, before she had been appointed to the Cabinet, Tang said Taiwan had “solved the Uber problem” via a new online open government forum process.

Editor: Edward White