Most people think that Uber is a disruptive technology. It introduces a new way of booking a ride and reducing the cost of the ride.
An economics professor explained that this is not the case. Uber is taking advantage of a loophole in the regulation.
Most governments regulate the taxi service. They imposed rules on licensing and competence of the drivers, the standard and safety of the vehicle, adequate insurance to cover passengers, etc.
Uber (and Grab in Singapore) uses private cars to bypass these regulations. The vehicles does not need to meet the safety standards. The insurance coverage may be inadequate. The drivers do not need to meet the same licensing requirements.
The professor said that taxi fares can drop significantly if the regulations are relaxed to the same standard as for private cars.
So, Uber is not a disruptive technology. It is a way to bypass the regulatory controls.
Uber does bring an unfair competition to taxi drivers. It has caused the earnings of the regular taxi drivers to drop, while creating employment for private hire drivers.
This kind of disruptive market is not good for the taxi service and the livelihood of the taxi drivers. The only party to benefit is Uber (or in our case Grab), as they can take a large commission from the earnings of the drivers by providing the platform for their operation.
Tan Kin Lian
An economics professor explained that this is not the case. Uber is taking advantage of a loophole in the regulation.
Most governments regulate the taxi service. They imposed rules on licensing and competence of the drivers, the standard and safety of the vehicle, adequate insurance to cover passengers, etc.
Uber (and Grab in Singapore) uses private cars to bypass these regulations. The vehicles does not need to meet the safety standards. The insurance coverage may be inadequate. The drivers do not need to meet the same licensing requirements.
The professor said that taxi fares can drop significantly if the regulations are relaxed to the same standard as for private cars.
So, Uber is not a disruptive technology. It is a way to bypass the regulatory controls.
Uber does bring an unfair competition to taxi drivers. It has caused the earnings of the regular taxi drivers to drop, while creating employment for private hire drivers.
This kind of disruptive market is not good for the taxi service and the livelihood of the taxi drivers. The only party to benefit is Uber (or in our case Grab), as they can take a large commission from the earnings of the drivers by providing the platform for their operation.
Tan Kin Lian
1 comment:
Uber add a humane side of things to their app unlike Grab. Grab is inferior in technologies yet its management is so backwards so as not to remedy the former defect. Blame it on the stupid CEO Anthony Tan.
Post a Comment