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February 17, 2019

Regulatory Power: Uber


Since its inception in 2009, Uber has developed into a technological juggernaut disrupting the traditional taxi business in more than 600 cities across world.

Uber, described as ride-sharing platform as opposed to a taxi operator, has managed to unlock the power of technology to solve a solution faced in everyday life.

Through its mobile platform, consumers are able to submit a trip request which will then be forwarded to a database of available crowd-sourced taxi drivers.

However, despite its virtually unrivaled kingship, Uber has become the subject of controversy in as many cities as it operates in. From numerous protests held by traditional taxi drivers blaming Uber for their loss of business to regulatory controversies in relation to the manner in which the company is structured, thereby affording it significantly lower labour costs than its traditional competitors. Included are tax agents, including Kenya Revenue Authority, that have also demanded their dues.

These challenges and controversies have not only hit the company’s bottom line, but have had a direct impact on the executive management, leading to a number of high profile departures from the Company. Only recently, the CEO and Founder of Uber had to step down. Truly, the road to the top is never an easy one.

Following the recent change in executive management, Uber had an opportunity to reinvent its image. These plans, however, seem to have been thwarted by Transport for London’s (TfL), the London transport regulator, recent decision to not renew Uber’s licence to operate in London.

While London is not the only city to deny Uber the right to operate – indeed it joins the ranks of New Delhi, Mumbai and Cape Town – the loss of support in such a major market is bound to have a profound effect on Uber.

While not venturing into the specifics of TfL’s rational behind not renewing Uber’s licence to operate, we must note that this is clearly a show of regulatory power that few regulatory authorities can match. It is no secret that multinational companies, relying on their intensive resources, are rarely known to bow down to the whims of “mere” regulatory bodies.

This is all too true in Kenya where Uber drivers have held numerous protests over the past two years – a resounding cry for help so to speak. This, however, has been met by lack of action not only from regulatory bodies involved, but from the legislature as well.

True, Uber, as an entity offering a service that brings efficiency, flexibility and affordability into the taxi industry, is to be welcome. Not only does Uber enable driver-partners, it also brings much needed competition to the taxi industry. However, we should not be blinded by the benefits and fail to protect our own. At the end of the day, charity begins at home

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