Why Uber Shouldn’t Be Banned In Malaysia

Arguments Against Uber

Discuss why uber shouldn’t be banned in Malaysia.

Uber Technologies Inc, an American international technology company. Uber B.V. (Besloten Vennootschap, is pretty similar to the English Limited Ltd) is owned by the Dutch company, Rasier Pacific V.O.F. (Vennootschap onder Firma) They are the subject of ongoing protests and legal action from taxi drivers, taxi companies, and governments around the world.

Uber is involved in at least 173 lawsuits. As of mid-2015, protests had been staged in Germany, Spain, France, and the United Kingdom, among other nations, and dangerous incidents involving passengers have been documented. Uber executives were arrested in France in June 2015. In December 2014, Uber was banned in Spain and in two cities in India. Uber continues to be involved in disputes with several governmental bodies, including local governments in the U.S. and Australia. Questions of employment law, consumer protection, unfair commercial practices, tax law, and insurance are common. Indeed, “it is impossible to foresee all the potential legal and regulatory issues involved when it comes to Uber

Uber is a transportation service that was launched in Malaysia in October 2013. UberBlack is one of its premium products which features more luxurious sedans such as Toyoto Camry, Nissan Teana, and Honda Accord. Using a mobile app as its virtual connectivity platform, UBER connects drivers to rides in over 160 cities around the world.

Understanding that UberBlack could be a tad too expensive for some, Uber recently launched a more affordable version of their service called uberX. Featuring cars such Perodua Myvi, Nissan Almera and Toyota Vios, UberX is cheaper than UberBlack and is also 15% cheaper than budget taxis. Uber has been in Malaysia for a few years now and has grown considerably since despite its legal status being in limbo all these while.

Though its popularity is still limited largely to urbanites as well as in big cities like KL, Ipoh, and Penang, many Malaysians have already viewed it as the best alternative to our public transport services. Many have even let go their day job to do UBER full time and others have chosen against owning a car due to the availability of cheap and convenient UBER rides.

While the consumers cheer, the rise of UBER on the other hand, has ignited outrage and dissatisfaction among none other than taxi drivers who view UBER as eating off their already small piece of pie. Taxi owners are standing against Uber. The main arguments raised by taxi drivers are as follows.

Why Consumers Prefer Uber

Firstly, UBER drivers are not subjected to test and checks (both of the driver and the vehicle), as well as extensive training that taxi drivers had to endure for the license to provide public transport services. To taxi drivers, even if UBER is allowed as a competition, the playing field is simply not equal. Thus either UBER should be banned in the entirety, or at least, they should be subjected to the same regulations imposed on taxi drivers.

Secondly – perhaps their stronger argument – is that UBER drivers are only insured as much as private car owners. In the event of a car accident, the passenger may not be covered by insurance of the driver (or the amount sufficient at least) and the drivers may even be denied insurance coverage for engaging in an “illegal” / “unlicensed” service. This in contrast to taxi drivers who are insured by their taxi companies; which also explains why there are strict regulations for the condition of the taxi and the competence of the taxi driver.

However, if given the choice, who wouldn’t opt for rides with better cars that cost less? It’s a no brainer really, and that’s notwithstanding other advantages such as the availability of cashless payment, rebates, detailed receipts and most importantly the “pick-up-as-and-when-needed” service as opposed to waiving your hand by the curb of the road.

Given all the pros to a UBER ride, obviously consumers could care less to the so called “level playing field”. Any right-minded consumer would only be concerned with quality and value for money. To them, may the best provider wins. Banning UBER to protect a less competent option would go against the grain of common economic sense.

Secondly, is it true that Taxis are safer because they are heavily regulated?

Many would say that is far from the truth. It is undeniable that we are not unfamiliar with taxi drivers being reckless and in fact, being the source of the danger itself i.e. taxi rapist cases. Otherwise, we wouldn’t have been educated to take note of the taxi drivers identity and making it known to a friend upon boarding, would we? Furthermore, this is only about staying alive through a taxi ride and I haven’t even started on the risk of

1) being extorted due to ie arbitrary pricing and/or refusal to use the meter; and

2) impolite drivers.

By no means am I saying all taxi drivers are terrible as I have personally met many who are polite, professional and courteous, however, we must admit that the number of accidents during, or due to, UBER rides are much less in contrast. Mere perception or actual statistics? I think the majority of the public would say UBER wins at both.

Benefits of Using Uber

Finally, in regards to insurance, the argument is simply this. Given the right price, it is not uncommon for people to opt for taking some risk in order to save money. Don’t we all opt out of AirAsia’s travel insurance to save that few ringgit because on a balance, we are confident of its safety that we judge that insurance is quite unnecessary? Similarly, any UBER rides are done within 10-20km distance and in the city centre and therefore, objectively the risk of accident is not high.  The argument which goes by the logic of “higher price for insurance coverage” doesn’t quite hold water to me.

Uber doesn’t allow cash payment. Uber users will know that in order to use Uber, they will have to register with their credit card or debit card on the app. This method is useful to users because users won’t have to worry about not being able to get a ride when they don’t have cash on them. Also, through this method, users will get a receipt sent to their email after they’ve used the service. The receipt includes a full fare breakdown of their journey – base fare, distance and time, which allows users to understand why they’re being charged the amount they are. Uber allows users to get a fare quote. With this service, users can get a quote before deciding whether or not they want to ride with Uber.

Uber users can split payment with friends. This is great because if users are travelling with a friend, they can share the cost with their friend by splitting the payment with him or her. For example if the fare comes up to a total of RM20, each passenger will only be charged RM10. Uber provides users with the details of the driver. When a Uber request has been accepted, the details of the driver – name, car model, car number plate, and driver’s rating will be displayed on the app. This method will help keep users aware of who their driver is and what car they will be picked up in, which is great because it avoids any miscommunication and confusion. Uber drivers will call the user upon confirmation of request. When a request is picked up by an Uber driver, the driver will call the user to double confirm the pickup point and to let the user know his estimated time of arrival (ETA). Users can share travel details on Facebook. Allowing users to share their trip on social media sites is brilliant because this way, friends and family members of the user can track and keep an eye of the user at all times.

Conclusion

Users can send Uber to pick someone up. Have a friend who is not an Uber user? No worries. You, as an user, can request and send Uber to them. For example, Uber user, Denesh Dmaniac (refer to pic above) requested for Uber to pick his girlfriend up because he didn’t feel like sending her for her meeting. According to him, he was confident in letting Uber pick his girlfriend up because he is able to track the driver live on his app. Uber provides mineral water for users. Brilliant for users who are under the influence of alcohol after a party or night out, Uber drivers offers the user with an unlimited supply of mineral water. Even if the user is not under the influence of alcohol and would like to have some water, they can. There is no midnight surcharge. Not having midnight surcharge is a plus point because this way, users can travel at anytime of the day and still be charged at the normal rate. Uber drivers are friendly and well spoken, and therefore, they treat users like queens and kings. Some drivers will even get out of the car to open the door for the user. Given that it is a luxurious car service, this service is pretty much the cherry on top!

As such, can there be any logical justification to banning the UBER industry, other than to protect the rice bowl of taxi drivers? Frankly I have yet to see any. However I must state at this juncture that arguing for or against “banning UBER” is not quite accurate because UBER is merely a software that connects consumers to the service provider (drivers). It cannot be “banned” because that would mean MyTeksi has to be banned as well. There is no law at the moment regulating UBER (the software) per se but it is clear in Section 16 of the Malaysian Land Public Transport Act 2010 that no person shall operate or provide a public service vehicle service unless he holds an operator’s licence issued under the said Act. As such, it is UBER drivers, who are rendering public transportation service without having the license to do so, that are currently in breach of the law.

Personally, UBER must be allowed as an alternative and the free market shall be the judge. There will still be a need for taxi drivers especially at areas where UBER is not available though it won’t be surprising that one day taxi service will be eliminated in totality if they still refuse to pick up their game.

Any action if there must, is a requirement that UBER drivers pay for additional insurance coverage. For Taxi drivers, my personal suggestion is they should consider switching to driving UBER rather than fighting against it since there is not much to lose but a lot to gain. In fact, I would think that the party that stands to lose the most are actually taxi companies and the authorities who issue those permits as opposed to taxi drivers. Perhaps even these protest are incited by them? I can’t say for sure but I would say should they have done a good job all these while, they could have avoided this fate.

The argument against Uber tends to boil down to legalities; private cars do not have permits to transport people commercially. Another argument is that while metered taxis have passenger liability insurance, private cars do not. These arguments are, to me, unconvincing. For the former, I can just consider my Uber driver a friend who prefers cash compensation (as opposed to a meal at a restaurant) for doing me a favor of driving me from point A to point B. There is little difference between that scenario and a friend buying me a Kentucky Fried Chicken meal as compensation for my driving that friend to the airport. On the latter, I think it really does not matter. If the driver chooses to take that risk, why is it the government’s business to regulate that choice? Furthermore, the incentive is to drive more safely which is certainly a good thing. It should be quite clear by now that I do not believe the government should regulate Uber whatsoever. If I choose to enter into a transaction for a service in Malaysia with a willing supplier of that service, it should not be the government’s business. If the government wants to ban private drivers, it might as well ban private music teachers or private freelance writers. After all, they add competition to ‘legally permitted’ music teachers and writers too, do they not? Therefore, it is silly to think that banning private transportation services enabled by Uber makes much logical sense and it is simply worth acknowledging that the decision is a highly political one; the government wants to appease taxi drivers who may or may not be an important vote bank and do have some collective action power.

References

Towards Logical Consistency: Uber and Immigration. (n.d.). Retrieved from:

https://nicholaskhaw.files.wordpress.com/2014/11/towards-logical-consistency-uber-and-immigration.pdf

Lubian, F. (2015). Uber and the Law. Available at SSRN 2723988.

Uber v Taxi? What’s the Problem and the Solution?. (2016). Retrieved from:

https://louisliaw.wordpress.com/2016/04/17/uber-v-taxi-whats-the-problem-and-solution/

Watanabe, C., Naveed, K., Neittaanmäki, P., & Fox, B. (2016). Consolidated challenge to social

demand for resilient platforms-lessons from Uber’s global expansion. Technology in Society.