WITH the passing of amendments to the Land Public Transport Act 2010 and the Commercial Vehicles Licensing Board Act 1987 at the Dewan Rakyat on July 27, and Dewan Negara on August 15, e-haling companies must apply for an intermediate business licence.

The amendments are scheduled to be gazetted next month. If Uber Malaysia Sdn Bhd has already been granted a licence, will it be revoked as happened to its London operations after city regulator Transport for London (TfL) declared that Uber London Ltd is not fit and proper to hold a private hire operator licence?

The reason given was because Uber’s approach and conduct demonstrated a lack of corporate responsibility.

Globally, it is facing a number of suits from governments, drivers, passengers and competitors. Some have been settled out of court while others have dragged on indeterminably.

Back in 2009, Garrett Camp developed UberCab, a mobile app for the public to share rides using licensed black Lincolns, allowing fares to be shared by passengers in the same limousine.

Later, Travis Kalanick was brought in as adviser and UberX was introduced in 2011 by recruiting private car owners to drive for Uber.

While UberCab fares were 50% higher than normal cabs, UberX was meant to undercut existing taxis. The strategy was not profit but market share to drive up company valuation, which skyrocketed from US$60 million in 2011 to US$68 billion by December 2015.

A recent report revealed that on average, passengers paid only 42% of the fare and the rest subsidised by Uber. As such, it had never been profitable and lost US$2.8 billion last year, and US$708 million in this first quarter.

On June 21, Kalanick was pressured by investors to resign as CEO in the wake of numerous controversies surrounding Uber, caused by its toxic work culture.

On August 27, Uber’s board unanimously voted in Dara Khosrowshahi, Expedia CEO since 2005, to be the new CEO.

For Uber to change, it has to start with its corporate culture. Uber’s proliferation was due to the fact that it has little or no respect for existing regulations and businesses, including the welfare of millions of taxi drivers and their dependents.

UberX was introduced in the Klang Valley in August 2014, portraying itself as the antidote for recalcitrant taxi drivers when, in fact, it was competing with local taxi apps, as those preyed by rogue cabbies were street-hailing passengers who do not use apps to book a ride.

The rates for UberX were RM1.50 starting fare, 55 sen per km and RM12 per hour when budget taxi fares were RM3.87 sen and RM17.14 respectively. It succeeded in capturing the main market share from MyTeksi, which was forced to rope in private cars and morphed into Grab, and competed successfully against Uber in Southeast Asia.

In London, about 3.5 million passengers and 40,000 drivers will be affected if Uber loses its appeal and suit against TfL. If Uber Malaysia Sdn Bhd were to be denied an intermediation business licence, a similar number of people will be affected locally.

However, the impact would be minimal compared with losses suffered by taxi companies and cabbies earlier. Moreover, Uber passengers and drivers could easily migrate to Grab or one of the new e-hailing apps entering the local market.

But it is more likely for Uber Malaysia Sdn Bhd to adhere to the set conditions, which include the type of service provided, measures to ensure the safety and security of passengers, and the standard of performance with which e-hailing companies must comply.

Being locally incorporated, it would have to pay corporate tax and remit GST to the government, more so when the Royal Malaysian Customs Department is tightening laws in order to tax foreign digital service providers.

Although Uber has disrupted taxi and tour operator business in Malaysia, it is likely to continue operating as locally based executives would emulate those at the parent company in reinventing itself, as businesses are only sustainable if based on values, not greed. – September 25, 2017.

* Y.S. Chan reads The Malaysian Insight.