Uber, the Game-Changer, not?

The Philippines has a way of messing things up not only for itself but for what should be a good thing.

Take Uber for example. While it faces its own troubles for failing to comply with legal regulations, its business model was supposed to be an improvement from the current arrangements followed by local taxi companies. In the Philippines, taxis are usually owned by a person who leases the cars to drivers. Compensation is set at a certain amount (the “boundary”) and anything earned by the driver above that boundary is his. It’s not that easy because the driver will have to pay for the gas and other minor expenses. Add to that the fact that taxi meters are based on distance traveled; so, if they get into heavy traffic, they lose big time.

Enter Uber. Now, drivers can own their cars and keep all the profits; well, after Uber gets its cut. The cut is less than a boundary and there are bonuses that Uber gives to allow the driver to earn more if he is willing to work more. All good, yes?

Enter the Philippines. When Uber first landed here, it was basically, well, illegal. There was no law or regulation covering their new “ride-sharing” model. They didn’t care, and when the government finally came up with a regulation for them, they didn’t follow it. Everyone knows that Uber delights in its “disruptor” label but operating illegally is putting that label on a whole new level. These days, Uber is facing multiple troubles in various countries where it operates. In some, it has decided to shut down, while in others, it is fighting in courts or regulators for its place in the sun.

To the riding public, especially in the Philippines, Uber has been a god-send. To drivers, however, things might not be that great. Aside from getting caught in the legal battle between Uber and its regulator, some have not made the transition to what should be a better life. While some have managed to get new cars under financing, and the earnings appear to be sufficient to make the monthly amortization, there are others who have been hired merely as drivers and, again, fall under the boundary system. There are those who have bought cars and hired drivers to drive them under the Uber brand, and while some drivers are used to that — they used to be taxi drivers — it has been harder. It appears that the “operators” make a cut on everything including the bonuses and other monetary incentives given by Uber to drivers.

So, in the end, even as Filipinos accuse local taxi companies of opposing Uber, and other ride-sharing companies, in order to protect their niche, it appears that “they” found a way to subvert Uber by making it like any other local taxi company. Sad. Of course, there will be those who will drive for Uber using their own cars and keep all the profits for themselves, how much I still have to figure out, but how many may soon change. I once had my car serviced in my casa and I found out they were partnered with Uber and there were drivers there applying to drive. Based on the interviews I overheard, Uber reps ask the drivers if they were driving for themselves or for another and there were some who said they were driving for the car owners. It seems that while the Philippines may not be good at start-ups, it does excel in innovation. Whether that’s good or bad is another matter altogether. In this case, it is definitely bad.

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