Street Legal: Will Uber's New 'Rental Car' Model Hit Roadblocks in Taiwan?

Street Legal: Will Uber's New 'Rental Car' Model Hit Roadblocks in Taiwan?
Photo Credit: Stellina Chen
What you need to know

Jason Hsu cautioned that the government was yet to reconcile the legal differences between online ride-hailing platforms and the traditional industry.

Uber has announced a partnership with car rental companies in Taiwan and plans to restart operations in the country on April 13.

Uber suspended its Taiwan operations on Feb. 10 after being hit with fines up to NT$328.5 million (US$10.5 million), half of which were incurred in January when new laws against unlicensed ride-sharing services took effect. The company also did not pay taxes in 2015, and owes the Taiwan government up to NT$51.24 million (US$1.6 million).

The company will hold a press conference on April 13, where it will explain its new business model in detail and give a preview of its updated app, according to an email sent to The News Lens.

Taiwan’s Directorate General of Highways told the Chinese-language Apple Daily that even under the new partnership model, Uber was only allowed to provide the technology and information platform. The car rental companies would bear the responsibilities of applying for health and labor insurance for the drivers, providing dispatch reports and rental logs.

Officials will evaluate the legality of Uber’s new operations, and will continue to press Uber to pay its existing fines. Uber had paid NT$68.25 million when it suspended its operations.

Uber had grown rapidly in Taiwan with its prices often significantly lower than local taxi companies.

Ministry of Transport officials told Apple Daily that it was unlikely Uber’s new business model would be able to sustain lower prices if it took a “legal” approach.

In a Facebook post, Kuomintang (KMT) legislator Jason Hsu (許毓仁) welcomed Uber’s return, saying that it was definitely good news for users of the ride-sharing platform.

However, he cautioned that the government was yet to reconcile the legal differences between online ride-hailing platforms and the traditional industry.

Hsu suggested that Uber should propose a plan to pay off its accrued taxes and fines, as well as shoulder its corporate social responsibility and be more transparent in handling customer complaints. The opposition legislator, who has a background in the tech sector in Silicon Valley and Taiwan, called for the ride-sharing giant to help Taiwan digitize its national transport system.

Hsu said “if Uber truly values the Taiwan market,” then it should invest further in Taiwan, and use local engineers and developers.

“It’s not enough to just maintain a sales office here,” he said.

Uber has faced several major roadblocks since it entered the Taiwan market in 2013. The government ruled it was operating an illegal transportation service because the company was registered as a tech company.

Elsewhere, Uber has also been entrenched in market wars in China, eventually settling for a merger with the Chinese-owned Didi Chuxing in August 2016. On March 28, Uber announced it was pulling out of Denmark, claiming “unworkable” local taxi regulations. An Italian court also banned Uber from operating in Italy on April 9, claiming the use of Uber’s app constituted unfair competition.

Editor: Edward White