The Straits Times says

A balanced approach to sharing apps

Commuters will not be wrong in thinking that innovative e-hailing applications like Uber and GrabTaxi can shake up the taxi industry perhaps as much as various regulatory measures over the years. The apps might nudge Goliaths like ComfortDelGro (which saw $4 billion in group revenue last year) to raise service levels and bring down rental rates so taxi drivers are not tempted to leave - a prospect signalled by the 2,000 taxis now being mothballed. Liberalisation a decade ago led to a boom in taxi numbers, higher daily rentals and fare increases. Despite that, complaints persisted of taxis vanishing at certain times and places. The taxi availability standards, introduced by the regulator in 2013, helped but were fully met by only one of the six cab companies. Whereas, the on-call rides provided by upstart tech firms are being lauded for offering prompt service when commuters need it most, during peak periods and at remote locations.

That popularity will ebb if Uber and its ilk start to look more like "pirate" taxis of the past that were run by a motley, anonymous group who ignored the rules, paid little heed to safety, comfort or insurance cover, and were not above price gouging. Will the entry of ride-sharing operators, reflecting market capitalisations that run into the billions, threaten the livelihoods of licensed taxi drivers who play a key role in maintaining an orderly and accountable system to enhance urban mobility? Such possible "negative externalities", as termed by economists, have prompted some cities, like Canberra and Barcelona, to try to rein in the exuberance of Uber and others. The authorities here are to seek public feedback before deciding how the Uber model is to be dealt with.

Certainly, it would be unwise to rush and wind up over-regulating disruptive technologies that could offer a competitive edge. Apps can

boost efficiency and the so-called sharing economy can promote the utilisation of resources that would otherwise lie fallow, like little-used private cars and unoccupied homes. Increased supply can offer consumers more choice and, in some cases, lower prices or even free use via peer-to-peer exchanges.

How far that is pushed might affect long-established market relationships. One doomsday view is that the astronomic valuations of dot.coms "imply that, long term, they have to take over and destroy much of the rest of the capitalist market", according to a commentator who sees reds ("dotcommunists") under the bed. Even if such notions are dismissed, one might be wary if a business model is based on evading taxes and regulations. What a "smart nation" ought to aim for is a framework that fosters real innovation, with sufficient scope for responsible entrepreneurship as well as peer-to-peer sharing that offers social benefits to consumers as a whole.

A version of this article appeared in the print edition of The Straits Times on October 14, 2015, with the headline 'A balanced approach to sharing apps'. Print Edition | Subscribe