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Uber’s Taiwan Operations in Jeopardy as Drivers Protest Rule Changes

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Pacific Money

Uber’s Taiwan Operations in Jeopardy as Drivers Protest Rule Changes

Taiwan’s transportation ministry is set to pass a new regulation that Uber says could hinder its ability to continue operating in the country.

Uber’s Taiwan Operations in Jeopardy as Drivers Protest Rule Changes
Credit: Pixabay

Taiwan’s government and Uber are locked in a regulatory spat that could see the ride-sharing giant limit or cease its operations in the country, one of the few markets in Asia where it currently operates.

April 26 marked the end of a public comment period on new rules put forth in February by Taiwan’s Ministry of Transportation and Communications (MOTC), which would mandate that Uber charge hourly or daily fares rather than charging by distance.

MOTC Deputy Minister Wang Kwo-tsai said Thursday the rules would not come into effect on Friday as legal preparations must first be made, but the ministry did not immediately provide a date for their ultimate implementation.

Lin Chia-lung, Taiwan’s transportation minister, said Tuesday that Uber should register as a taxi company to maintain its current distance-based fare model. “I am all for the sharing economy, but Uber must follow the law to operate legally in Taiwan,” he told assembled media in Taipei.

However, Uber has reiterated its refusal to register as a taxi services company in Taiwan. “Uber is a technology company, we do not operate anywhere in the world as a taxi company or dispatcher,” the company said in a statement on Wednesday.

The disagreement between Uber and the MOTC has alarmed Uber’s approximately 10,000 drivers in the country, some of whom protested the rule changes in front of Taiwan’s Presidential Office on Sunday.

Drivers held another protest in front of the MOTC on Thursday and said they would launch a signature drive to overturn the new rules through Taiwan’s public referendum process should the government implement them.

Taiwan’s MOTC announced in February its intention to add Article 103-1 to its Automobile Transportation Management Regulations, which would prevent drivers of vehicles from rental car companies from accommodating passengers calling for a ride or from driving around to seek customers.

Since 2017, Uber drivers have used cars loaned from rental car companies rather than driving their own vehicles. The scheme was devised after Taiwan refused to allow Uber to operate its standard service without registering as a taxi services company.

But the MOTC, under pressure from Taiwan’s taxi drivers, unveiled Article 103-1 after saying Uber still essentially operates as a taxi company under the 2017 compromise.

The ministry has asked Uber to join a multipurpose taxi program and, on Tuesday, expressed a potential willingness to relax rules restricting fare structures and vehicle colors, according to Uber, although any potential resolution may be far from being realized. At present, this program does not allow upfront or dynamic pricing, Uber said in a statement on Monday.

Uber says it wants to share its technology with Taiwan’s taxi drivers, allowing them to accept passengers via the Uber app, and has called for Taiwan to update its taxi regulations to better accommodate ride-hailing services such as Uber and Call Car Bar, a Taiwanese startup employing about 1,000 drivers that joined in Sunday’s protest.

“Technology can improve driver earnings and increase consumer choice. The government needs to embrace the future by updating current taxi regulations first before introducing new rules that would destroy a fully legal, innovative, and successful business model that supports 10,000 rental car drivers and over 200 rental car companies,” Emilie Potvin, Uber’s head of policy for North Asia, told The Diplomat in an email.

The standoff also threatens to undo progress made by vTaiwan, a platform for online consensus-building helmed by Digital Minister Audrey Tang, in resolving a previous dispute between Uber and Taiwan’s government in 2017. That spat saw Uber suspend its operations in Taiwan for two months after the company was fined over US$10 million.

The current arrangement, in which Uber drivers use cars from rental car companies, was closely aligned to suggestions derived from discussion on vTaiwan, which was adopted after the Sunflower Movement and run by the civic tech community g0v (pronounced “gov-zero”). At the time, Tang presented the vTaiwan conclusions at meetings held between Uber and taxi drivers, which led to an agreement that was presented to and ratified by the MOTC.

Two years later, however, the parties find themselves at yet another impasse.

The saga has raised the ire of some notable officials, including Kuomintang (KMT) legislator Jason Hsu, who criticized the MOTC’s handling of the situation on Twitter. “It’ll be a lose-lose situation. Uber is likely to leave Taiwan,” said Hsu.

Update: On Thursday, comments presented by the American Institute in Taiwan, the de facto United States representative office in the country, were obtained by Taiwan’s Up Media. In the two-page letter, the AIT said it was troubled by the rule changes, which would “constitute a de facto prohibition on app-based transportation businesses offering services in Taiwan.”

“President Tsai Ing-wen has sought to promote Taiwan as a regional hub for startups and to build an innovation ecosystem in Taiwan,” the letter said. “However, some of the requirements in the Draft Measures could contravene President Tsai’s objective and jeopardize Taiwan’s reputation as a safe place to invest and innovate.”

Taiwan cabinet spokesperson Kolas Yotaka acknowledged the AIT comments on Thursday, saying it welcomed input from all sectors as part of the 60-day public comment period.