Ride-hailing needs practical rules
Ido not own a car. In fact, I don’t even drive, so I rely totally on public transport — buses, taxis, motorcycle taxis (if needed) and mass-transit trains — to commute around Bangkok. I rarely use ride-hailing apps, although many of my friends find the service more convenient than regular taxis and they like the promotions. I don’t have anything against ride-hailing services. I just haven’t become accustomed to them, even though it’s frustrating to be turned down by taxi drivers during rush hour when they don’t want to take me to some congested part of the capital.
And while services such as Grab have been operating in a legal grey area in Thailand, with police routinely stopping and fining drivers because they are not properly registered, I truly believe that consumers should have a choice. The government seems to agree and is finally preparing to legalise the business.
Taxi drivers in Bangkok often turn down potential customers by offering stupid excuses, so that’s why many commuters have chosen to use mobile apps to summon rides instead.
But a recent report that a teenage girl was raped by a Grab driver in his car in Udon Thani certainly makes me wonder whether ride-hailing companies are doing enough to ensure the safety of customers who rely on private drivers. I also wonder how carefully they monitor overall service quality, given that Thailand is still an unregulated market.
I also took note of a threat by Malaysia’s competition watchdog last week to fine Grab 86.8 million ringgit (US$21 million) for anti-competitive practices. The Malaysia Competition Commission said Singapore-based Grab was abusing its dominant position by preventing its drivers from providing advertising services for Grab’s competitors. That distorts competition, it said. Grab has been given 30 days to respond.
The commission said it was responding to multiple complaints accusing Grab of monopolistic practices since it bought out the Southeast Asian operations of Uber. Both companies are backed by SoftBank of Japan, which essentially told Uber it was wasting its time trying to compete against Grab in Asean.
Grab faces similar investigations in other countries in the region, including Thailand, Vietnam and the Philippines. Singapore fined Uber and Grab S$13 million ($9.4 million) for antitrust violations last year. The Philippines also fined the pair 16 million pesos last October, saying they had violated the conditions set by its competition regulator.
Grab and Indonesia-based Gojek are the two biggest ride-hailing businesses by far in Southeast Asia. Their mobile apps have become one-stop shops for everything from rides to food delivery and money transfers. The bigger they get, the more criticism they are likely to attract.
In Malaysia, Youth and Sports Minister Syed Saddiq Syed Abdul Rahman caused a stir in August when he said he wanted to see Gojek bring its motorbike taxi service to Malaysia. He seemed to have forgotten that Malaysia had a home-grown bike-sharing business, Dego Ride, launched in late 2016. However, it was declared illegal by the former government on safety grounds.
Motorcycle taxis are actually illegal in Indonesia too, but tell that to Gojek and the millions of commuters who use its services every day.
Even in markets where ride-hailing services are regulated, ensuring a level playing field with regular taxis remains a tough job. The Thai Transport Ministry, which hopes to legalise the services by March 2020, should take note.
Traffic is already so congested in Bangkok that allowing more wheeled vehicles on the roads should be one of the factors to take into account. There’s no doubt that ride-hailing apps have made transport more convenient in many cities, and many consumers love the transparency of the digital platform. There is no ambiguity about price, pickup locations and arrival times. Companies like Uber and Grab give ordinary people a chance to share the spare capacity of their cars and earn extra cash as drivers.
The big question is whether we should have more regulation or less over a sector that is becoming more popular. Consumers want some level of protection, but too much regulation could stifle innovation and growth.
One thing we know for sure is the market needs competitors to keep prices affordable and ensure service quality. Thus we need to encourage new players to enter the market. Grab and its peers need to remember that “sharing economy” services need to win the hearts and minds — and business — of their customers by showing they share their deeply held values. Readers can send their feedback or comments to nareeratw@Bangkokpost.co.th