Uber Taiwan is Back. What is the New Business Model Like?

Photo credit: Reuters/達志影像
Why you need to know

Uber is going to act as an "information platform" that, instead of linking drivers to the customers, now provides the service directly to car rental companies.

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Two months after hitting pause on its Taiwan operations, Uber is back running in Taipei under a new business model. The popular ride-hailing service surprised the local market earlier this week, announcing it had formed a new partnership with car rental companies.

Uber suspended its Taiwan operations on Feb. 10 after incurring fines of up to NT$328.5 million (US$10.5 million), half of which were in January when new laws against unlicensed ride-sharing services took effect – under which it could be hit with a NT$25 million fine for a single law breach.

The temporary exit followed an ongoing regulatory standoff with the government over Uber's status; Uber maintains it is a technology company while successive administrations have deemed it a transport company.

However, at a press conference in Taipei today, Likai Gu (顧立楷), general manager of Uber Taiwan, said that Uber is now going to act as an "information platform" in Taiwan; instead of connecting customers to drivers, it now links customers to car rental companies.

According to Uber's official website, after going through a few simple steps — registering online, uploading a professional driver license, ID card and police criminal record certificate — Uber will assign drivers to car rental companies cooperating with Uber. This means all Uber "drivers" will be holding professional driver licenses, not the standard licenses they previously used.

Uber's traditional model sees fares calculated by the distance traveled and current driver demand. It is not clear exactly how prices will be set under the new model, but Gu said car rental companies will now provide the calculation.

When asked if Uber will restart its ride-sharing services in the future, Uber's Asia general manager Michael Brown said the company hopes to continue to advocate the services in Taiwan because it is not only efficient but can also save energy through driving multiple passengers at the same time.

In response to potential fines, Gu said Uber's first step is to find a new cooperation model with the government but Uber will follow the legal process.

Kuomintang (KMT) legislator Jason Hsu (許毓仁) yesterday said Uber’s return was definitely good news for customers.

However, he cautioned that the government was yet to reconcile the legal differences between online ride-hailing platforms and the traditional taxi 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: Olivia Yang

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