We’re more than halfway through the year, and it’s clear that it’s going to be a rough ride for Uber in Asia. Across the continent, the San Francisco-based ride-hailing company faces new rivals, new legal hurdles and other roadblocks.
Uber first entered Asia via Singapore in October 2012 and took off fast. But the smooth motoring of those early days are over.
Here are seven challenges that Uber faced in Asia this year:
1. Major new rivals
Uber now has more homegrown rivals than ever across Asia. Start-ups like GrabTaxi and EasyTaxi have for years been making taxis easier to hail in numerous countries across the continent, but now several new apps are emerging that go after Uber more directly, taking on core Uber private car services including UberBlack and UberX.
GrabCar, from the makers of GrabTaxi, is the most ambitious of the new challengers in terms of geographic scope and venture capital muscle. The Malaysia-based start-up got $250 million in venture capital funding at the end of last year (a record for a Southeast Asian start-up); a big chunk is being plowed into an ambitious research and development center and a driver recruitment program.
In India, local start-up Ola is expanding aggressively with hundreds of millions of dollars in venture capital funding, its app used for taxis, private cars, and even the country’s ubiquitous motorized rickshaws. Uber fired back this month by launching in seven more Indian cities, taking its tally to 18 cities covered. That’s second only to the U.S.
Meanwhile in Japan, the popular messaging app Line started the year by rolling out its latest spinoff Web service — Line Taxi. That was initially limited to Tokyo, but by April it had expanded to cover more than 90 Japanese cities.
Japan is one of the few Asian countries where Uber ties up with licensed cabbies as well as private car drivers. It offers UberTaxi and UberTaxiLux in Tokyo alongside its UberBlack service.
2. Seoul blues
Regulators in Asia are casting a hard eye on Uber. The company’s biggest fail in the region is South Korea.
In May, Korea passed legislation banning private car drivers from operating like a taxi, citing concerns over Uber’s lack of checks on drivers, failure to get proper insurance, and mobile phone numbers and credit card numbers possibly being “leaked” by the app. This killed off UberX, but it hasn’t hurt the limo-like UberBlack.
Uber Chief Executive Travis Kalanick cannot risk entering the country to begin negotiations because he has been indicted twice by Seoul’s police force “on suspicion of conducting an illegal business.” Also, the 32-year-old head of Uber Korea was detained by police along with 27 other people in March.
That move was not unexpected as it came nearly a year after authorities in Seoul said they intended to clamp down on such Web-connected services involving private cars — and replace them with an app of their own.
3. China raids
Uber can’t seem to catch a break in its most important market outside the U.S. — China. The company got a wake-up call late in the night April 30 when police raided the Uber office in the southern Chinese city of Guangzhou. A photographer from the Guangzhou Daily joined police on the high-profile raid.
The company stood accused of running an “illegal” transport service in the city, where it operates UberBlack, UberX and UberXL.
Uber’s office in Chengdu, Sichuan province, was stormed by police a few days later.
No formal charges have been made thus far.
4. China protests
The China raids were soon followed by sizable and sometimes violent protests against Uber drivers, led by licensed cabbies in several cities.
It wasn’t just Uber. Driver ire is also aimed at China’s homegrown taxi apps, Didi Dache and Kuaidi Dache.
After a large and angry protest in Guangzhou in mid-June, Uber sent a message to all its drivers saying they should not retaliate or hold protests of their own. In other countries, Uber has told its drivers to agitate for changes to local laws, but in China Uber opted against rocking the boat — a concession to China’s strict laws on “disturbing the peace” that effectively prohibit protests.
5. Dodgy numbers, fake passengers?
In a difficult year, not even Uber’s own growth numbers stood up to scrutiny. Last month, the Financial Times printed details of an email Uber CEO Kalanick sent to investors, contending that Uber in China is now “completing almost 1 million trips per day and the business has doubled in the last month.”
But that came days after local media reported that some Uber drivers are logging fraudulent rides using fake passenger accounts to grab Uber’s driver bonuses. At around the same time, the New York Times uncovered much more modest internal metrics for Uber’s performance in China, showing it’s providing 100,000 rides a day.
6. Slowly getting back up to speed in India
Uber was banned for a month late in 2014 after a repeat sex offender allegedly raped a female passenger in New Delhi.
Although Uber was able to resume services in New Delhi in late January, the city’s Transport Department was able to force a change that Uber has resisted around the world, agreeing to become a licensed radio taxi operator in the city.
As part of the deal, Uber must fit GPS-based tracking devices in vehicles, and drivers must obtain transport department badges, to be displayed prominently along with photographs, just as in regular taxis.
7. Mounting pressure in Indonesia
Uber’s progress in Indonesia could screech to a halt. In June, Jakarta governor Basuki “Ahok” Tjahaja Purnama said the city would continue to seize cars driven by Uber’s so-called partner-drivers. “If Uber registers their business and pays taxes, it can operate here. But if it doesn’t, we’ll keep on seizing cars,” the governor told the media.
City authorities have not yet indicated any regulatory action against app-connected private car drivers.
Steven Millward is chief editor for the online news service Tech in Asia.
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