In news that we initially thought of as fake due to its sheer absurdity, Punjab and Sindh Governments have termed Uber and Careem illegal. The decision has, understandably, caused an uproar with many labeling it a ‘money grab’ and a ‘bureaucratic tantrum’.
The decision is strange for many reasons, one of which is the great fanfare Uber received when it entered Pakistan. A MoU (Memorandum of Understanding) was signed between the ride hailing giant and PITB. The irony of provincial governments banning Uber while another arm of the government is welcoming it to enhance the ecosystem is just delicious. It’s like bipolar disorder on a government level.
This decision will have instant short term effects as well as long term ramifications.
The Case Against Uber and Careem
Uber and Careem are global brands. They’ve faced their fair share of opposition from lawmakers but the language and nature of the resistance they’ve faced has never been this awkward. The Transport Authority justified its decision through five key points. It said that these ride hailing services:
- Don’t have fitness certificates
- Don’t have the route permits
- Are using private cars which can’t be used commercially.
- Pose a security threat to the public.
- Are causing losses to the govt exchequer.
Applying Rules Selectively Helps No One
All vehicles on the road should have a certification that they are fit to drive. It’s a valid argument. However, the LTA and Sindh Govt are forgetting we all live in Pakistan.
I’m sure all of you have seen the condition of most taxis on the road. Often, we come across Suzuki FX’s and Mehran’s that were operational through the sheer will of the drivers. It’s not only taxis either. Wagons for public, carry dabas, buses, trucks and vans on school routes – take a look at anything – and it’s clear that there’s no rhyme or reason dictating what vehicles can be on the road.
In our experience, and that of most of the people we’ve polled, the cars used by Careem and Uber are vastly better in comparison. Careem doesn’t accept any vehicle manufactured before 2008 for economy class and 2012 for business class. Uber’s oldest cars are 2001 models but even they have to pass stringent requirements. Can these transport authorities tell us with a straight face that they are doing a better job of regulation than Uber and Careem?
Route permit reasoning is also rooted in logic yet similarly falls flat on closer scrutiny. Do we have a comprehensive framework for taxis or for the vans which take our kids to school?
Uber and Careem drivers pass stringent security checks. Before you take a ride, you get the car model, number, color, name of the driver as well as his contact details in a SMS message. All this information makes it difficult for anyone to get away with poor behavior let alone something more sinister.
If there are issues, star ratings are an immediate feedback mechanism and we know for a fact that action is taken much quicker than in any government department. Saying they are a threat to public is a laughable notion for anyone who has ever ridden in an Uber or Careem. I trust these services for when my parents or sisters need a ride. I can’t say the same for the taxis supposedly regulated by our authorities.
These transport authorities either need to hold every vehicle on the road to the same standard or explain why they are targeting these ride hailing services in particular.
Are Uber and Careem in the Wrong?
Another interesting tidbit in this developing story is that A-Taxi has not been banned. We talked to their parent company and were told that the reason behind their omission is that they operate much like Daewoo or other transport services with licenses, permits and relevant certifications.
Reportedly, Uber and Careem have failed to comply with government demands for getting NOCs and paperwork for operating in Pakistan. That begs the question, why wait until now? Shouldn’t these requirements have been fulfilled when they started instead of a year later?
Be Honest About Your Intentions:
Many experts are suggesting this move is nothing but an attempted money grab. These services have proved ride hailing is lucrative and the transport authorities want a piece of the pie. Let’s ignore the fact that they have failed to capitalize on this opportunity and are now scrambling.
If they do want to regulate this sector, they should do it in a proper manner which means taxing them under laws. If ride hailing is a new technology and the regulations don’t exist, it’s their job to craft them instead of banning them outright.
Uber & Careem Ban Will Hurt Everyone:
I’ve had the opportunity to travel extensively in Uber and Careem and I make it a special point to ask every driver what they think about the service, the rates they offer and the financial opportunity they present.
Most of the feedback has been positive. These services offer a stand up way of earning money part time or full time and a ban is affecting the livelihood of thousands.
Talking about losses to the government exchequer is also a strangely short sighted way to look at things. Uber and Careem employ thousands of people and they earn a handsome amount. Complemented by their primary jobs, it’s disposable income which is spent – surprise, surprise – within the provinces and taxed.
So if ride hailing services are creating jobs, generating disposable income which is taxed and easing the life of countless people who rely on them for transport, what exactly is so abhorrent about them?
Repercussions for Pakistan’s Image:
In the end, I just want to stress that the government needs to decide what it wants to do. You can’t talk to the likes of Alibaba about Pakistan’s potential and then ban two international companies without warning in the same week.
If government decisions are so erratic and affect business, it sends a very strong signal that our regulatory bodies are not prepared for new business models and technologies.
Everyone is going to be watching how this story unfolds very closely and we hope for the sake of Pakistan, the government resolves it amicably.