From the Straits Times archives: Uber's mounting problems around the world

A conman claiming to be from app-based taxi service Uber charged an exorbitant fee of $97 for a ride from Beach Road to Yio Chu Kang last week.

While the conman's car was impounded by police on Monday night, Uber was quick to clarify that the man was not linked to the company, emphasising that Uber only matches drivers with passengers through its app, and does not allow drivers to pick up passengers on the street. Furthermore, fare estimates are given to passengers via the app before the ride, and payments are cashless.

This is not the first time Uber has run into problems. Although Uber has been valued at US$40 billion (S$54.6 billion), making it the most valuable US startup, the San Francisco-based company faces a global onslaught of problems. We take a look at some of them.

1. Japan slams brakes on Uber's pilot project

Less than a month after Uber launched its pilot project in Japan's western city of Fukuoka, officials told them to stop the pilot project.

Officials said that the project breaches Japanese transport law and cited concerns that it was an "unlicensed taxi business" because of the use of non-professional drivers. They also cited safety concerns.


However, Uber was undeterred, saying that it would continue to talk with officials, highlighting that the service would be a plus for urban transport in rapidly ageing Japan.


2. Taxis jam central Brussels in protest

Uber hasn't even arrived in Brussels yet, and taxi drivers are already up in arms.

Brussels Transport Minister Pascal Smet outlined plans last week for taxi reforms in the Belgian capital from the start of 2016, which includes conditions which Uber could operate.


To protest, hundreds of taxis drove slowly through central Brussels, bearing banners which said "No to Uber". Unions said that 1,200 taxis took part, although police estimated the turnout at about 600.

Uber also faces resistance in Europe, although it has dangled a carrot in the form of creating 50,000 jobs this year in European cities which allow them in. Nevertheless, taxi drivers around Europe, including Italy, Spain and France, have turned out to protest since February because they currently benefit from a highly regulated system.

Uberitaly 1


3. South Korea rejects Uber's proposal to legalise its business

Uber looks to be in serious trouble in South Korea. Last Thursday, South Korea called the company's proposal to legalise its business by registering its drivers "unacceptable", and vowed to continue cracking down on the company and its services.


Although it started its services there in 2013, angry protests from local taxi drivers have prompted authorities to severely restrict Uber's growth. Last December, South Korea prosecutors indicted Uber's American founder and CEO Travis Kalanick, and the firm's Korean partner for operating an illegal cab service.

Seoul authorities also offered a 1 million won (S$1,237) reward for those who report cars offering rides through the Uber service, while Seoul's telecom watchdog further ruled that Uber Korea had failed to report its business and receive official permission before providing its location tracking services.


3. Delhi woman sues Uber over alleged rape

A woman who said she had been raped by an Uber driver sued the company in the US federal court in January this year. She claimed that the company had failed to maintain basic safety procedures.

The rape, which occurred in December last year, triggered protests on the issue of women's safety in New Delhi.

Taxi share app Uber is pictured over a car park in New Delhi. The city banned the app-based ride booking service in the city after a driver was accused of raping a female passenger. -- PHOTO: AFP

As a result, Delhi's government banned Uber from operating in the city until the company applied for a radio taxi licence early this year.

Similarly, an Uber driver in Boston was charged with the kidnapping and rape of a woman around the same time in December last year. This was in spite of him having passed a background check.

The outry also prompted the company to launch additional safety measures, including more stringent driver checks, an in-app emergency button, and a dedicated incident response team.


4. Hiking prices for fleeing passengers during Sydney siege

On Dec 15, frightened people fled an armed cafe siege in Sydney's financial hub, as the police surrounded a cafe where a gunman was holding hostages.

Uber then implemented "surge pricing", which increases rates during peak demand for those leaving Sydney's central business district, reportedly charging customers four times the regular fares.

Uber said it was "truly sorry" after hiking fares while frightened people tried to flee a cafe siege in Sydney's central business district. -- ST PHOTO: MARK CHEONG

Its actions resulting in a social media backlash, with some Twitter users calling it a "shameful disgrace". Uber apologised and soothed angry Australians by offering refunds and free rides out of the central business district.

Globally, the company has defended surge pricing, arguing that it matches demand with supply more effectively by encouraging drivers to move to areas with a shortage of drivers. Nevertheless, it came to an agreement with regulators to cap surge pricing in the United States during national emergencies.


5. Taiwan slaps Uber with fines for illegal operation

Taiwanese authorities fined Uber for not declaring that it was offering transport services.

Although the company was registered as a company, the highways unit handed 30 fines to Uber totalling NT$2.55 million (S$106,386 ) since September last year for operating without a licence.

Taiwan has slapped a string of fines on US-based company Uber for operating illegally, as it did not declare that it provided transport services, -- PHOTO: AFP

A total of 33 local drivers are also facing combined fines of NT$1.65 million for the same offence.

Like other cases, authorities were responding to complaints from local taxi drivers, who complained that Uber had diminished their income unfairly.


6. Uber probed by US judge on driver benefits

Even on its home turf, authorities are scrutinising Uber sharply. In January this year, a US District Judge expressed scepticism about Uber's bid for a quick ruling that its drivers are contractors and not employers.

Uber drivers had brought Uber to court, contending that they are Uber employees and entitled to reimbursement for expenses such as gas and vehicle maintenance. They say that they should be considered employees because Uber can hire and fire them, require them to accept a certain percentage of rides, and to pass background checks.

However, Uber argues that drivers are not considered employees because drivers control their own schedules, are not assigned a territory and are not supplied with any equipment apart from an iPhone and a sign.

US District Judge Edward Chen said that "the idea that Uber is simply a software platform, a service provider and nothing else..." was not a "persuasive argument".

The ruling could significantly raise Uber's costs beyond the lawsuit's scope, forcing it to pay social security, workers' compensation and unemployment insurance.


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