If ride-hailing app Uber’s negotiations with the government over the legalization of the taxi provision fall short in the next few weeks, the popular service is expected to exit Macau.
Uber said in a statement that it will close down its Macau operations on September 9, citing hefty fines for its drivers; unless it reaches an agreement regarding the company’s legalization and the fines payable, which amounts to more than MOP10 million.
Macau’s taxi services will welcome Uber’s surrender. As in scores of other cities worldwide, local taxi firms have from day one opposed the disruptive model introduced by ride-hailing apps such as Uber.
Traditional taxi firms will likely see this as a victory celebrating a return to ‘business as usual’, despite suggestions from Macau’s Transport Bureau (DSAT) that new legislation will be introduced to monitor and punish those who violate the rules. However, the timing of the crackdown is unusual.
At the start of the month, Uber said it was selling its China-based business to competitor Didi Chuxing, ending an expensive price war in exchange for a stake in the consolidated business. Several government authorities – namely, police entities and the Transport Bureau – changed tack, from insisting that the use of ride-hailing apps was unequivocally illegal to conceding that the applications themselves “are not illegal.”
“What is illegal [is] the collaboration between such applications and unauthorized parties to run a fare-charging passenger transport service,” the Transport Bureau acknowledged in a message to the Times.
A longtime topic of disdain among Macau residents, traditional taxi services have been accused of industry-wide “rogue driver behavior”, including scamming and overcharging customers, and refusing to transport them to their requested destinations.
There have been several recent incidents of reckless driving, including two accidents on the Governador Nobre de Carvalho Bridge.
More than two years ago, Andrew Scott and his fellow concerned residents set up a Facebook group to “name and shame” taxi drivers. Today, the group has over 5,600 members.
“Uber is leaving Macau because it has become too expensive [to pay out all of these fines],” Andrew Scott, who is the CEO of World Gaming Group, told the Times yesterday. “People loved having Uber in Macau […] so it’s a great shame [for them to leave].” However, Scott is optimistic that some sort of ride-hailing service will enter into force in the near future.
“There will be an Uber-like ride-sharing app in Macau at some point in the future,” he said. “It’s inevitable […] if Macau is to become a world-class tourism destination.” “Someone else will try to fill the void,” he said, which might be an existing entity, a new organization, or even a publicly funded service.
On the other hand, “a company like Didi, that has been given the green light in China, would be a strong [contender] for this.” Uber says it has more than 2,000 full-time and part-time drivers, around 300 of which have been fined by local police services in the past. They say a crackdown against their drivers means that the total amount of fines “is constantly rising at a rate of MOP1 million each week.” The company implied that the situation has become untenable, as its policy is to cover the fines levied against its drivers.
Uber has been operating in Macau for slightly less than a year. If the estimate of an additional MOP1 million in fines per week – totaling MOP10 million – is accurate, the scale of the recent crackdown represents a significant intensification of local efforts to police the matter.
Andrew Scott also said that it would be no surprise if the closeness in timing between the Uber-Didi China deal and the Macau crackdown was the result of some sort of connection.
The Macao Community Development Initiative (MCDI) is planning a demonstration on September 4 in support of Uber. Lawmaker and MCDI vice chairman Au Kam San said the demonstration is in support of Uber’s continued operations in the territory. Au also said that Macau can definitely come up with policies to regulate such services.