Uber declared illegal in Thailand
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Photocredit: Bankok Startup

Taxi lobbies created a huge backlash that resulted in the ban


The “startup” Uber has been declared illegal in Thailand and drivers will now face high fines if they continue to service passengers. Department of Land Transport director-general Teerapong Rodprasert said the reasons are that

  • vehicles are improperly registered
  • fares not in line with regulated rates
  • drivers do not own proper licenses and
  • discrimination against customers without credit cards.

The Uber blooper

The outrage among consumers is huge, and the Facebook page of Voice of Taxis is flooded with discussions and comments.
Thailand’s has seen Easy- and Grab- Taxi entering the market before Uber launched earlier this year, and wherever Uber launches there is a huge backlash particularly from taxi lobbies, that often results in ban’s. Earlier this year Uber was for example banned in Germany, and other countries in South-East Asia are discussing how to deal with the company.

Countries like Germany, France or the US have taxi services that might not be ideal, but they are by far superior to the services offered by Taxi drivers in Thailand. Local taxis are regarded particularly unsafe for women, and scams like purposefully prolonging the ride, keeping change or driving without a meter are common. That is if a taxi driver decides to take the passenger at all. Cars are often old and badly maintained, and drivers often drive dangerous – to say the least. While drivers do have to obtain licenses the system is not very well monitored and the practice of handing over the car to other drivers is common. With those issues in mind the reasons director-general Teerapong Rodprasert stated sound rather ridiculous, especially because Uber solves all those problems for consumers.

Legally the Land and Transport ministry follows in its decision the arguments of other countries. Uber’s practice of entering the country and dealing with the local laws later has allowed the company to grow exponentially over the last few years. Uber is backed by some of the most successful and powerful Angel Investors and venture capital firms in the world, like Google Ventures, Goldman Sachs, Jeff Bezos, Kleiner Perkins Caufield & Byers, and Summit Partners. It seems unlikely that those companies will be rattled by legal obstructions.

In Thailand Uber is providing the services of UberBlack, offering the “original” luxurious and more expensive experience, and UberX at a starting price of 25THB, even lower than current taxi fares. The company often called a disruptor to the existing taxi system is not without critics.

Since Uber is positioning itself as a platform that allows people to share rides, the company takes little to no responsibilities for their drivers. Particularly the low cost rides such as UberX or UberPop, that provide fares below that of local taxis and can result in a negative ROI for the drivers (article in German). Uber has also faced criticism for comments the management made on the treatment of  journalists criticising the company, sexual harassment, business ethics and collecting data without user consent.

Photocredit: Bangkok Startup.

This post was originally published on Bangkok Startup.

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Christian Walter

About Christian Walter

Lecturer in Entrepreneurship, Research in Business Model Innovation, Customer Driven Innovation and Gamification. Co-Founder of BangkokStartup.

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