Philippine court temporarily stops ridesharing services in Manila

 A Philippine court on Friday (Dec 4) ordered a 20-day temporary halt on the operations of ride-sharing companies.
A Philippine court on Friday (Dec 4) ordered a 20-day temporary halt on the operations of ride-sharing companies.PHOTO: REUTERS

MANILA (REUTERS) - A Philippine court on Friday (Dec 4) ordered a 20-day temporary halt on the operations of ride-sharing companies such as Uber in the country's capital, adding to the firm's global struggles against regulatory and competitive obstacles.

The Philippines was the first country to regulate these types of app-based services, to help make up for inadequate mass transport in Manila, Southeast Asia's second most congested city after Jakarta, according to research firm Numbeo.

The Philippine regional court blocked permission by the transport department for Uber, and competitor GrabCar, to ply Manila's streets, pending its decision next week on a petition to ban them in the capital.

"There is extreme urgency to issue a temporary restraining order to the petitioner to prevent grave and irreparable injury and damages because their claim that they suffer less or low incomes and earnings is found to be persuasive," the court said.

The petition, by a group of taxi operators and drivers, claimed that Uber and GrabCar were given special treatment to operate without a franchise. "The income of taxi drivers was slashed by up to 50 per cent because of the app-based transport, which does not follow tariffs imposed by the government," said Jun Magno, leader of the group, the Stop and Go Coalition.

About 660,000 taxis ply their trade in Manila, the Asian Development Bank estimated in 2010.

However, Friday's (Dec 4) order does not affect operations in central Cebu, the country's second largest city, where the government has allowed Uber to operate 10 vehicles to help meet public transport demand during the Christmas holiday season.

Founded in 2009, Uber is now in 60 countries around the world but has faced more than 170 lawsuits in the United States alone, was banned in France and is popular but illegal in Australia.

In China and India, Uber, backed by investment bank Goldman Sachs, faces strong competition from homegrown companies, fuelled by the transport needs of large and growing populations.

To strengthen their challenge to Uber, ride-hailing firms, including China's Didi Kuaidi, GrabTaxi in Southeast Asia, India's Ola and US-based Lyft have formed a global ridesharing partnership.

From the first quarter of 2016, the four companies will share resources to allow international travellers to access local rides by using the same app they use at home.

Didi, backed by Chinese tech giants Tencent Holdings and Alibaba Group Holding, already has a stake in Lyft, GrabTaxi and Ola. Japan's SoftBank Group is also an investor in each, except Lyft.