MANILA, Philippines–San Francisco-based Uber Technologies, operator of a wildly popular smartphone application that connects drivers and passengers, is keen on expanding its presence in the Philippines with the upcoming release of landmark rules in the region.
But certain kinks, like the proposed regulation of Uber’s pricing scheme, needs further “reconsideration,” Michael Brown, Uber regional general manager, said in a rare interview in Manila this week.
Brown said Uber welcomed the release of the new guidelines, which has yet to receive the final approval of Transportation Secretary Joseph Abaya, as a way to move forward following a brief run-in with the Land Transportation Franchising and Regulatory Board in late 2014.
He noted that Uber, whose growth has skyrocketed globally since it started in 2009 and is now valued at more than $40 billion, agreed with most of the new guidelines, which would require drivers here to get government permits apart from more stringent safety measures like criminal background checks.
“The Philippines would be the first jurisdiction in Asia to have this kind of regulation,” Brown said. The new rules will likewise lend added legitimacy to Uber’s domestic business. Uber, which owns no cars and provides only the platform, has been recording fast growth since it officially began in Metro Manila in February 2014, Brown said. It makes money by taking a cut out of the fare, usually 20 percent.
Brown declined to give figures specific to the Philippines but said the Uber X product, for more compact vehicles, offers cheaper fares compared to standard taxis. The company expects to lure “tens of thousands” of Filipino drivers over the next few years. He said plans to expand outside Metro Manila were also in the cards.
As noted, a thorny issue here is related to the regulation of Uber’s pricing scheme, which can fluctuate depending on the volume of vehicles on the road. For example, prices can fall below regular taxi rates during lean hours but they also climb significantly higher during “rush hours.”
“We have made transportation less expensive for people and drivers are making more money than they have ever made. What we are advocating is that the government here should allow us to do what we do well,” Brown said.
“We have expressed a desire for them [LTFRB] to rethink that aspect of the regulation,” said Brown, adding that their pricing model is regulated nowhere else in the world.
Right now, the LTFRB is keen on regulating fares—its mandate under the law, LTFRB Chair Winston Ginez said in a separate interview. He said the draft had been submitted to Abaya and further meetings were likely required.
“We know the economics of this [ business] and we will not be unreasonable. But we want to have the final say. We don’t want prices to be abused,” Ginez said. He said he was hoping to release the final rules within the month.