Uber’s on the Road Again

The ride-hailing app is now partnering with licensed car-rental companies in Taiwan.

Ride-hailing app Uber returned to Taiwan in April after a two-month suspension of its services, this time in partnership with licensed car-rental companies. In a break with Uber’s standard business model, drivers’ companies set the fares – and non-professional drivers are barred from taking Uber assignments.

The revised business model solves Uber’s insurance and registration travails in Taiwan. Previously, Uber was unable to insure its drivers or passengers as the drivers were unlicensed. Secondly, since it is registered as a technology company, Uber is forbidden by law from hiring its own drivers in Taiwan. Now, drivers working with the ride-hailing giant are hired by their respective car-rental firms.

At an April press conference in Taipei, Uber Asia-Pacific regional general manager Mike Brown said that the company is “happy to bring Uber back in Taiwan,” adding that it is important for Uber to adhere to local regulations.

Uber’s newfound interest in compliance comes after a protracted battle with regulators that saw it get slapped with NT$830 million (about US$27 million) in fines. Regulators say the company must also pay NT$50 million (US$1.64 million) in taxes for 2015.

“As far as the regulations are concerned, the Taiwanese government seems to be okay with Uber’s change in service operations,” observes Nephy Hu, an industry analyst at the state-backed Market Intelligence & Consulting Institute (MIC). But to ensure that its business runs smoothly in Taiwan, Uber must pay its fines in full, he says.

Uber has appealed the fines and is in discussion with the government about its tax bill, company executives say.

Given Taiwan’s strict ride-hailing operation rules, Hu cautions that Uber may still face headwinds in Taiwan. “The chance for Uber to be shut down [again] cannot yet be completely ruled out, as there is potential for it to violate public transportation regulations,” he says.

Meanwhile, Uber’s UberEats food-delivery service remains a point of contention with local authorities. In a February statement, the Director-General of Highways (DGH) said the meal-delivery app was an illegal business. But by utilizing “legal loopholes to evade government inspections,” UberEats had prevented the government from collecting sufficient evidence to “confirm their business operations.”

At present, it is unclear how the continued operation of UberEats will affect Uber’s new venture here with car rental firms.

Still, “if Uber is able to survive and flourish in compliance with the rules set by the Taiwanese government, the diversification brought by Uber will be a positive thing for the Taiwanese licensed rental-car market and may force taxi operators or individual taxi drivers to upgrade their services,” says MIC’s Hu.