TECHNOLOGY ECONOMY Don’t get too settled

Online-based businesses like Uber will change the traditional way of doing business

regulatory and marketplace dynamics, which makes them amenable to computational analysis.”

Uber and Airbnb recently came under regulatory scrutiny in many cities where they operate. In the US, cities such as New York and Boston have noted the popularity of Airbnb and have assessed whether regulations are required. One of the areas of concern is the safety of renters, who may not be familiar with their surroundings.

During the festive season, Uber was severely criticised for charging exorbitant fares in some cities, while in New York it was partially suspended for refusing to hand over data from its customer base, in spite of its initial agreement to do so.

In Cape Town about 30 of its taxis were impounded because the drivers did not have the right permits to operate in the city.

Tamaryn Tesselaar of TNK Attorneys says the Uber controversy highlights a new compliance challenge likely to surface with mobile apps that connect consumers with service providers.

There is some uncertainty about the licensing category that an innovative service such as Uber should fall into, says Tesselaar. The National Land Transport Act makes provision for limited categories of vehicles which may obtain operating licences, she says.

According to Tesselaar, taxis associated with Uber would meet most of the requirements of a metered taxi, “save that [Uber] does not calculate its fares using a meter, which is required by the law. Instead the Tamaryn Tesselaar Legislation has to catch up with innovation fare is calculated on a predetermined distance using GPS coordinates. Therefore, Uber model vehicles would not qualify for an operating licence,” she explains in a statement.