Local ride-hailing apps tripped up by crackdown on tuk-tuks
HK-Asean trade deal a boon for Cambodia
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.