Lo­cal ride-hail­ing apps tripped up by crack­down on tuk-tuks

HK-Asean trade deal a boon for Cam­bo­dia

The Phnom Penh Post - - BUSINESS - Robin Spiess and Kali Ko­to­ski Hor Kim­say

POP­U­LAR lo­cal ride-hail­ing ap­pli­ca­tions and their driv­ers came un­der fire this past week­end when Ph­nom Penh saw a city-wide po­lice crack­down on the In­dian-style tuk-tuks, with 170 un­reg­is­tered ve­hi­cles be­ing de­tained by City Hall cit­ing a lack of li­cence plates.

While lo­cal own­ers of these ser­vices are hope­ful that driv­ers can soon be­gin op­er­at­ing nor­mally again, con­fu­sion over li­cens­ing pro­ce­dures fol­low­ing a re­cent gov­ern­ment prakas on ride­hail­ing busi­nesses has left some un­sure about long-term vi­a­bil­ity.

Suon Van­hong, deputy gen­eral di­rec­tor of the De­part­ment of Land Trans­port at the Min­istry of Pub­lic Works and Trans­port, ex­plained that the tuk­tuks – much like the apps em­ploy­ing their driv­ers – are re­quired to be reg­is­tered in or­der to op­er­ate in the city.

“The rea­son why the tuk-tuks were seized by the au­thor­i­ties was be­cause they didn’t have proper reg­is­tra­tion num­bers to be on the streets,” he said, adding that the reg­is­tra­tion process for the de­tained tuk-tuks be­gan yes­ter­day.

“I can­not say how long it will take the tuk-tuks to reg­is­ter, but once they are reg­is­tered, the part­ner­ship agree­ments they have with other ride-hail­ing apps also need to be reg­is­tered be­fore they can op­er­ate ser­vices again,” he said, ad­mit­ting that there was likely a dent in week­end ser­vice for the pop­u­lar ap­pli­ca­tions.

The prakas, which was signed on Oc­to­ber 6 by Trans­port Min­is­ter Sun Chan­thol and ob­tained by The Post but has yet to be dis­sem­i­nated pub­licly, re­quires all ride-hail­ing ser­vices to reg­is­ter with the min­istry in or­der to con­tinue le­gal op­er­a­tions in the King­dom. Key clauses in the prakas state that driv­ers em­ployed by lo­cal taxi com­pa­nies can supplement their in­comes by work­ing si­mul­ta­ne­ously as pri­vate con­trac­tors for ride-hail­ing ser­vices with­out breach­ing their ex­ist­ing work con­tracts.

Uber, the world’s big­gest ride-hail­ing ser­vice which launched for­mal op­er­a­tions in the King­dom in late Septem­ber, was in­stru­men­tal in draft­ing the prakas for the Cam­bo­dian gov­ern­ment, said Brooks En­twistle, the firm’s chief busi­ness of­fi­cer for the Asia Pa­cific re­gion, at the time.

How­ever, Krit­tiyawadee Pong­panich, an Uber com­mu­ni­ca­tion di­rec­tor based in Thai­land, said that as of Oc­to­ber 26, the com­pany had yet to be fully reg­is­tered.

“We have since be­gun the regis- tra­tion process with the Min­istry of Pub­lic Works and Trans­port. The gov­ern­ment sought in­dus­try in­put through­out the re­form process, and we were de­lighted to par­tic­i­pate in the process,” she said in an email.

Van­hong ad­mit­ted that while some ride-hail­ing busi­nesses had per­mis­sion to con­tinue op­er­a­tions for a short pe­riod un­der ex­ist­ing con­tracts and agree­ments, all would even­tu­ally be re­quired to fol­low the new reg­u­la­tions.

Top Ni­mol, owner of on­line ride­hail­ing ser­vices PassApp and EZ Go, ex­plained that while his rev­enues were only marginally af­fected by the crack­down, the real vic­tims were the driv­ers of the me­tered tuk-tuks.

“PassApp didn’t lose much money, be­cause rev­enue is low, but the driv­ers lost a lot,” he said. “They come from poor fam­i­lies, and if they have no in­come even for a day, they will have a prob­lem pro­vid­ing for their fam­i­lies.”

He added that he has al­ready be­gun reg­is­ter­ing his busi­nesses in ac­cor­dance with the prakas and hopes to hear back about his ap­pli­ca­tions by the end of the month, not­ing that he is cur­rently al­lowed to op­er­ate for only six more months with­out of­fi­cial reg­is­tra­tion be­fore his ser­vices will be shut down.

With ride-hail­ing gi­ants like Uber and Grab mak­ing moves on the Cam­bo­dian mar­ket, the gov­ern­ment will hope­fully re­alise the im­por­tance of reg­is­ter­ing lo­cal ride-hail­ing ser­vices, said Ni­mol.

“I hope that the gov­ern­ment will al­low for lo­cal com­pa­nies to con­tinue of­fer­ing ride-hail­ing ser­vices in or­der for lo­cals to get more in­come. I know that for Uber, the charge to the driv­ers is very high,” he said.

He added that Uber charges its driv­ers 25 per­cent of their rev­enue from each ride they com­plete, while PassApp charges its driv­ers ap­prox­i­mately half as much.

“If the gov­ern­ment al­lows Uber to be reg­is­tered, when it charges much higher rates to its driv­ers, then I hope the gov­ern­ment un­der­stands that [lo­cally owned ap­pli­ca­tions like PassApp] help driv­ers much more,” he said.

Hor Daluch, owner of ride-hail­ing ser­vice ExNet, said that while he had heard about the new reg­u­la­tions, he had not seen any in­for­ma­tion about how to prop­erly reg­is­ter.

“I have never seen this prakas re­leased by the gov­ern­ment,” he said. “I haven’t heard any­thing from gov­ern­ment of­fi­cials about it, and no one has reached out to me or sent me the doc­u­ments.” A FREE trade agree­ment signed be­tween Hong Kong and mem­bers of the As­so­ci­a­tion of South­east Asian Na­tions (Asean) stands to ben­e­fit the King­dom by help­ing it di­ver­sify its ex­port des­ti­na­tions, an econ­o­mist said yes­ter­day.

The agree­ment, which was signed on Sun­day in Manila, con­cludes nearly three years of talks and is ex­pected to take ef­fect in 2019 at the ear­li­est. The aim of the agree­ment is to re­duce trade bar­ri­ers and boost in­vest­ment through greater re­gional eco­nomic in­te­gra­tion.

Hiroshi Suzuki, CEO of Busi­ness Re­search In­sti­tute for Cam­bo­dia (BRIC), said that for heav­ily re­liant ex­port economies like Cam­bo­dia, these types of agree­ments are es­sen­tial for con­tin­ued growth.

“For many de­vel­op­ing coun­tries, in­clud­ing Cam­bo­dia, which are re­ly­ing on ex­ports, free trade is one of the most im­por­tant fun­da­men­tals for the de­vel­op­ment of econ­omy,” he said.

“The FTA [free trade agree­ment] be­tween Hong Kong and Asean will con­trib­ute to the di­ver­si­fi­ca­tion of ex­port des­ti­na­tions from Cam­bo­dia.”

Suzuki also said that the planned fi­nal­i­sa­tion of the Ja­pan-Asean Eco­nomic Part­ner­ship Agree­ment was ex­pected to bring re­gional ben­e­fits, and urged the King­dom to join in a ver­sion of the Trans-Pa­cific Part­ner­ship which was for­mally adopted by Asia-Pa­cific Eco­nomic Co­op­er­a­tion (APEC) last week called the Com­pre­hen­sive and Pro­gres­sive Agree­ment for the Tran­sPa­cific Part­ner­ship (CPTPP). The US with­drew from the TPP last year, spark­ing fears of iso­la­tion­ist poli­cies.


An EZ Go tuk-tuk taxi trav­els down a street near Ph­nom Penh’s Kan­dal Mar­ket last year.

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