On Uber merger with Grab in SE Asia (not just PH).
It is business prerogative to enter a market and make money, it is also
business prerogative to exit a market and pull out its money. Should be
no big deal for us.
My advice to friends who use the "Duterte/LTFRB
harassment of Uber then merger with Grab", maybe Yes but very likely No,
so don't pursue it. I think this is a purely business decision by Uber HQ. The
good thing is that Uber has inspired many local businesses here to copy their
model, improve on it then dream big.
Regular taxis are still the main competitor of Grab-Uber, so there is no monopoly. Taxis can also provide good service like cleaner cars and seats, more courteous drivers. But more than convenience, the main advantage of tech companies is transparency and hence, better safety. The passenger already knows the name and plate no. of the car that will pick him/her up, the same for the driver, he/she knows the name of passenger even before they meet. In contrast, taxis are known beforehand to LTFRB regulator-bureaucrats but not to the would-be passengers.
Reposting two items here.
(1) From my friend Vic M:
"It was a failure in the open market by the drivers, the investors in cars, the investors in the business. I'm for a safety net but not for bailouts.
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I think it is Uber HQ's decision in the US to pull out
partially or fully (someday) from SE Asia. Why, perhaps they just want to get their money and put it elsewhere, maybe strengthen their
US and Europe presence. It's their capital.
What should worry us is if government -- via the LTFRB, DOTR --
will bureaucratize a new PH tech company/ies that will rival Grab. Uber
is US-based, Grab is SG-based. Perhaps it is time for a PH-based tech company to
venture in this business.
Capitalism always encourages innovation. The bigger innovation would be how to baffle the LTFRB bureaucrats here so
that a tech company won't be harassed and treated as a regular taxi company.
Uber HQ by now may have realized that they did not factor
in well how different the Asian transportation bureaucratics are compared to
the US and Europe transpo bureaucrats. They may have to tweak their system then
come back later.
Regular taxis are still the main competitor of Grab-Uber, so there is no monopoly. Taxis can also provide good service like cleaner cars and seats, more courteous drivers. But more than convenience, the main advantage of tech companies is transparency and hence, better safety. The passenger already knows the name and plate no. of the car that will pick him/her up, the same for the driver, he/she knows the name of passenger even before they meet. In contrast, taxis are known beforehand to LTFRB regulator-bureaucrats but not to the would-be passengers.
Reposting two items here.
(1) From my friend Vic M:
"It was a failure in the open market by the drivers, the investors in cars, the investors in the business. I'm for a safety net but not for bailouts.
The market mechanism is for reposession of the
collateral. If an investor in cars for use in an Uber business model signed a
cross-collateralization agreement, deficiency remediation provision, or worst,
personal guarantee, then it was their stupidity to have signed those legal
remedies. Why should anyone bail them out? Under the reposession case, the
price of used cars will come down which may lead to lower brand new car prices
as well. The consumer wins.
(2) 3 ride-sharing firms apply for LTFRB accreditation
(2) 3 ride-sharing firms apply for LTFRB accreditation
March 29, 2018 | 12:04 am
By Patrizia Paola C. Marcelo, Reporter
THE LAND Transportation Franchising and Regulatory Board
(LTFRB) is currently processing the applications of three transport network
companies (TNCs), which are expected challenge the dominance of Grab
Philippines…. Lag Go, Owto, and Hype.
If granted franchises, the vehicles of the accredited
TNCs will be part of the common supply base of 65,000 transport network vehicle
service (TNVS) in Metro Manila.
Indonesian ride-hailing and online payment company Go-Jek
earlier said the company aimed to set up operations in the Philippines this
year.
“With the increase of supply base under one app, you
should see allocation times get better because the density of cars across the
map gets better. So it’s easier to allocate. So if it’s easier to allocate, the
surge would not be as frequent as before,” Grab Philippines country head Brian
P. Cu said said in a press conference.
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See also:
Transport Econ 19, On taxi fare contracting, December 17, 2016
Transport Econ 20, On traffic and road sharing, January 20, 2017
Transport Econ 21, E-trikes halted, P455k each, June 08, 2017
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