The “shared-economy” business model adopted by Uber presents serious challenges to traditional taxi business and to legislation created to address those challenges.
The Internet has made hailing cabs and paying fares convenient, and brought prices down to levels slightly below those charged by traditional cabs.
Another advantage of Uber is that passengers occasionally get to ride in a luxury car, while Uber drivers are able to put their unused cars to work to make extra cash, meet people from all walks of life, and introduce a little freedom and variety into their lives.
It is little wonder that the world has got the Uber bug, or that traditional taxi drivers are feeling a little under the weather and looking to their governments for a pill to ease their pain.
In a bid to prevent public services from deteriorating, and to protect public safety, the Cabinet on Monday convened a joint meeting of the executive and legislative branches to discuss amendments to articles 77 and 78 of the Highway Act (公路法).
The plan is to increase fines for violations of the law and set up a “whistle-blowing” system to keep tabs on infractions by Uber. Should Uber continue with its allegedly illegal conduct — and should this amendment be passed — it could be fined up to NT$25 million (US$791,941).
Caught between a rock and a hard place, the government sided with traditional taxis and placed restrictions on Uber.
In terms of overseeing the existing order of things, this makes sense.
However, it might also be a little short-sighted. The government appears to be taking an obstructive stance on shared-economy initiatives and by doing so stamping out fledgling ideas, such as Uber, Airbnb and other potential initiatives. This seems to run counter to the policy of encouraging emerging markets.
The established taxi model will need to change at some point, and perhaps even be replaced by new technologies or services.
It can be assumed that sharing economy will be the business model of the future. When that happens, the government’s policy will prove to be conservative and behind the times.
There are some similarities, as well as differences, between Uber and the traditional taxi business model.
The legislative framework cannot accommodate both, and the conflicts caused by emerging industries are causing problems for governments around the world.
The government could come up with a better approach.
It does not need to be a zero-sum game. The government is right to offer some protection to the traditional taxis for the moment, but it could also ease the pressure on Uber and offer it something other than restrictions and fines.
Premier Lin Chuan (林全) should direct Minister Without Portfolio Audrey Tang (唐鳳) to set up a task force to draft legislation to address the nation’s needs, and allow Uber to operate and help traditional taxi companies transform their business model, to provide them with leeway in their next stage of development.
Otherwise, the fledgling initiatives will be suffocated before they can develop.
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