by Kelvin Wong | Photo credits: www.morganmckinley.com.hk | 13 February 2015
It came as a surprise when Uber announced two days ago Free Taxi Day — a day on which customers could get two free taxi rides with a maximum of HKD $200 fare each. Soon afterwards, an Apple Daily report said Alibaba’s own taxi app, Kuaidi Dache, responded with a counter-attack by giving each taxi driver a subsidy of HKD $18 per order. The first shots have finally been fired in the war between ride-hailing applications in Hong Kong. However, many people boycotted Uber amid reports of it “squeezing every last drop out of its drivers’ pay”, and some governments have even banned the use of Uber in their own countries. Does Uber offer a fascinating new experience for calling cabs? Or would Hong Kong be another place where Uber exploits taxi drivers’ income?
This is not the first time a technology company has launched a campaign to promote their own taxi ordering app in town. On 3 December 2014, Jack Ma, the founder of Alibaba, launched a HKD $60 subsidy scheme for first-time Kuaidi Dache customers. It is reported that the scheme costed Alibaba five million dollars. However, the campaign did not draw a lot of attention from Hongkongers.
On 17 December 2014, Chinese Internet giant Baidu confirmed having invested in Uber for an undisclosed amount. Uber now operates in nine Chinese cities and Hong Kong is their new target in 2015. In other words, the strategic cooperation between Baidu and Uber seems to present one critical fact: Hong Kong’s taxi-calling market is actually the battlefield of the two Chinese tech giants.
It’s official: #Baidu is investing in #Uber. Size/value of stake not yet disclosed $BIDU pic.twitter.com/Hyiq9lQqnA
— Edmond Lococo 罗孟德 (@EdmondLococo) 2014 12月 17日
Local reports said there were not enough available taxis on Free Taxi Day. It was then reported that Uber would offer a free ride to customers who could not enjoy Wednesday’s deal before the end of March. Despite the discontent stirred up by the lack of allied taxis, Uber has stolen the spotlight this week by ranking number one on the App Store’s free app chart on Wednesday.
Uber was reported to have invested one million Hong Kong dollars into this campaign. It was an opportunity to promote its line of services – uberTaxi, UberBlack, and UberVan. Some taxi drivers in HK welcome the use of Uber. Additionally, taxi drivers can even get profit from Uber if they respond to any Uber order. Moreover, the referral scheme encourages both customers and taxi drivers to get people to join the Uber family.
However, reports from other countries also suggest that the prevalence of Uber has led to the exploitation of taxi drivers’ income. As Uber becomes more popular by day, more and more taxi drivers discover the profit margin of serving Uber clients and become full-time Uber drivers. Then, after a certain period of time, Uber reduces the profit given to taxi drivers. In that case, when Uber drivers fully rely on the orders from the app, they have no choice but to accept the profit reduction. This has led to controversies in several countries.
Since Uber cannot be monitored by local jurisdictions, some governments have banned Uber’s services, claiming that the laws and regulations cannot protect customers of Uber. Alleged threats have been made by Uber toward some citizens and journalists who gave bad reviews to its services.
Although customers today are considered to be more educated, aware and better informed about issues such as corporate citizenship, ethics and company culture, this does not guarantee that individuals will actually behave accordingly. In many cases this type of information is not the main driver of customers’ decisions…
Things like the company’s culture and values refers to the long-term benefits the company has for society as a whole and for other people. This could be the cab drivers, other unfortunate customers or the journalists who are criticising Uber and have been threatened. But because [recent scandals involving Uber is] relatively new and only affecting others, the sense of ethical responsibility [Uber] evokes only speaks to people’s citizen side, not their consumer side, which makes the decisions about spending.
“Why We Keep Using Uber Despite Douchebag Behaviour” – Lifehacker Australia
It is very difficult to control the use of mobile applications in local markets. The introduction of Uber may eventually give rise to social and ethical issues. But until then, the new taxi-calling app will be welcomed by more taxi drivers in Hong Kong.
“I am old, so one app is enough for me. I will only use Uber,” said one taxi driver in the local report.
P.S. UberVan is entering the local van hire market, making it a direct competitor of the homegrown GoGoVan. However, that is a story for another time.
Kelvin Wong
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