Uber vs the traditional world
The news of Uber, the pioneer of ride-sharing business model launching its operation in Dhaka jolted the urban crowds of Bangladesh. Mixed opinions quickly surfaced in the social media platforms, dissecting the problems and prospects of this company in our traffic-packed streets.
The conventional welcome for Uber upon entering a new country was no different in Bangladesh than the other ones, upsetting local governments/ authorities and riling up traditional taxi drivers. BRTA, the transportation regulatory authority of the country was quick enough to publish a notification prohibiting the use of Uber app in Dhaka. But is it going to stop the embarkation of ride-sharing companies in Bangladesh including the local ones?
Avalanche of legal actions around the globe
Propelling a business model of sharing economy where the mega-company doesn’t even own a single car, Uber has inspired a lot of homegrown startups that have started operation in their respective countries. But the growling of the traditional service providers has resulted into a number of court room battles where Uber was the usual target. So far, it had been struck with at least 173 lawsuits. Conventional taxi operators took to the streets in Germany, Spain, France, the United Kingdom, Brazil, China, Indonesia and India, and dangerous incidents including rapes involving passengers have been documented. In Frankfurt and Madrid, Courts had intervened to ban the operation of the company; a Barcelona Court requested the European Court of Justice to review the matter. A hefty fine of $ 7.3 Million was imposed to Uber by a Court in California for not disclosing its business data. Two Uber executives were arrested in France in June 2015, and could be sentenced up to five years prison time along with a fine of $ 445,000. In Canada, Uber was hit by a class-action lawsuit worth $400 Million.
In India, the Delhi city government banned the service along with other taxi-hailing apps after a woman was allegedly raped by an Uber driver in Delhi. It also required Uber to get a radio-cab license by fulfilling conditions like owning its own cabs, providing designated parking slots and so on. Uber filed for a license, and it was rejected.
However, Uber inspired India’s homegrown taxi-hailing apps like Ola, which is now operating in 100 cities whereas Uber reached to only 16 cities. Smartphones have become widespread in Indian urban crowd and such apps are making a real difference for people. Interestingly, Uber hopes to continue its operation in Delhi when a Court rejected the plea of the Govt. to ban Ola from Delhi streets.
Despite all odds, Uber has expanded its services dramatically since its launch in 2009. It's now available in 66 countries, covering more than 568 cities. The Wall Street Journal estimates Uber is worth about $50 billion, almost twice its value in 2014.
The reason, according to John Pliniussen, Professor of Business in Queens University, is simple: 'People around the world just love it.'
Reforming laws and regulation to accommodate ride-sharing services
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. A recent research on Uber and dehumanised negotiations by Northumbria University reveals, 'It is impossible to foresee all the potential legal and regulatory issues involved when it comes to Uber'.
California adopted the first ride-sharing regulations in 2013, coining the term ‘Transportation Network Company’, or TNC, to describe companies that provides transportation services but don't technically own cars or employ drivers. Other U.S. states and cities including Seattle, Chicago, Colorado, Illinois, New York City and Washington, D.C., have since followed suit, adopting their own TNC legislation. Even in Canada, different city administration including Toronto initiated by-laws and regulations to accommodate Uber and like companies.
The European commission extended its support for the companies that provides 'sharing services' (like Uber and AirBnB), and stated that countries should only ban them as a last resort. Saudi Arabia agreed to invest $3.5 billion in the company earlier this month, while Toyota, the world’s biggest carmaker agreed a partnership with Uber that will see it offer drivers favorable leases on cars.
As a futuristic initiative, Uber launched the beta version of self-driving cars in Pittsburgh. A fleet of Ford Fusion cars equipped with cameras and GPS served the Mayor of Pittsburgh city as one of the few selected customers on September, 2016. In the days to come, the development of self-driving cars and emergence of the new market niche will complicate the legal aspects.
Finally, the city authorities that are trying to keep Uber out through legal channels need to understand that they are fighting a losing battle. Similar to trying to stop people from using smart phones or ATMs, it won’t work in the long run.
The writer is the founder and CEO of the FutureLaw Initiative.