Uber has launched its food delivery service in Taiwan amid continued controversy over the legality of its business.
The U.S. company this week launched UberEATS, delivering food from restaurants across Taipei via an app and a network of scooter drivers.
UberEATS operates in more than 40 cities, mostly in the U.S. and Australia. It first entered the East Asian market through Singapore in May, followed by Japan in September. It also has operations in Hong Kong. In Taiwan, the company partners with well-known local restaurants and uses scooters for deliveries, CNEWS reports. It will be competing with an established operator, German company foodpanda, which has been operating locally for about five years.
However, government officials and politicians from both sides of the political divide have criticized UberEATS, saying Uber has not gained the relevant permits and will be operating illegally, Liberty Times reports. Several legislators have demanded the Ministry of Transportation and Communications (MOTC) remove UberEATS from app stores.
Department of Railways and Highways Director-General Lin Chi-kuo ) said officials would contact the iOS and Android companies to show that it the app is illegal in Taiwan, Liberty Times reports. Minister of Transportation and Communication Ho-chen Tan , however, said it would be difficult to make the app unavailable, adding that such a move would raise concerns by global app designers and e-commerce companies.
The MOTC could fine UberEATS NT$50,000 to NT$150,000 (US$1,600 to US$5,000) for violating the Taiwan's Highway Act if drivers set out on the road without proper permits.
Uber’s main ride-hailing business also continues to face difficulties in its operations in Taiwan, amassing fines of up to US$68 million, amid ongoing tax and business legality issues. Earlier this month, Uber board member and strategic adviser David Plouffe was in Taipei and said the country needed a legislative structure that fosters the new digital economy, and he suggested the country could refer to regulations used by other countries.
Legislator Cheng Yun-peng , from the ruling Democratic Progressive Party (DPP), says the government should continue to issue Uber with fines, and focus on improving local taxi services. He also suggested the government invest technology for self-driving cars.
Kuomintang (KMT) Legislator Jason Hsu told The News Lens International that he is drafting a “Digital Economy Act,” which would incorporate different digital economy business models and could be used to facilitate the market entry and regulation of companies like Uber.
Still, he said the issues faced by UberEats was "two-way" with both sides needing to make changes.
“The government should understand that if we keep punishing innovation and startups by heavily fining the company, in order to protect the existing industry, this country won’t advance,” he says. For its part, “Uber needs to understand that if it wants to business in Taiwan, must abide by the law here – whether it’s for tax, insurance or license issues.”
In the meantime, he says that if the government does “crackdown” on UberEats and other similar companies, it would harm Taiwan’s reputation as an “innovation friendly” country.
Former KMT legislator Zhao Jheng-yu , now an unaffiliated sitting lawmaker, questioned the safety of UberEATS’ plan to hire scooter drivers for delivery services – UberEATS employs anyone that is over 19 years old with a scooter’s license. Zhao believes this could lead to hiring young, inexperienced drivers, and subsequently make the roads more dangerous.
The debate over UberEATS has put the operations of foodpanda under the spotlight. Foodpanda, which has been in the Taiwanese market since 2012, also uses scooters for its deliveries and works with over 1,000 restaurants in Taiwan, including 400 in Taipei alone. Officials from the company said it has been operating legally, but one local news organization alleged the company did not register as a delivery service, and like Uber, has violated the Highway Act.