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Uber gears up to enter market

Taxi Rouge vehicles queue for customers in the Kingdom’s capital.
Taxi Rouge vehicles queue for customers in the Kingdom’s capital. Hong Menea

Uber gears up to enter market

Representatives from global ride-hailing behemoth Uber confirmed the company’s interest in starting operations in Cambodia during a meeting this week with Transportation Minister Sun Chanthol, according to one of the minister’s aides.

Ken Ratha, deputy director of cabinet of the Ministry of Public Works and Transportation (MPWT), told The Post yesterday that Uber executives visited the ministry on Tuesday to explain their business model to the minister and Phnom Penh municipal officials.

“They are interested in our market so they came to seek the minister’s support by explaining Uber’s business model to him,” he said. “The minister showed his strong support for the company’s project and encouraged more discussions to elaborate on its operating plan.”

Ratha confirmed that no agreement has been signed yet between the government and Uber, and that discussions are still at an early stage. He added that officials are now giving thought on how to regulate the ride-sharing model in Cambodia.

“Uber’s business model is new so the minister and relevant stakeholders are currently thinking about which laws and regulations would apply to the company as well as how to best help their activity in Cambodia,” he said.

“There are no details right now on how Uber’s entrance to the market will affect the current taxi and transport industries. But so far those involved in the discussion have shown their interest to implement this smart business concept, with the hope that it will help to reduce traffic congestion and accidents.”

Uber representatives did not respond to press inquiries yesterday, though have previously confirmed to The Post that the company is actively exploring the possibility of entering the Cambodian market.

US-based Uber operates ride-hailing services in over 570 cities worldwide, pairing passengers and drivers using the company’s smartphone app. The company has faced regulatory hurdles in many markets, including Thailand, where the company’s services were banned and drivers are liable to be fined.

In some markets it has also faced a backlash from metered taxi drivers, who accuse it of unfairly stealing their business.

Sambath Sothea, director of local taxi operator Taxi Rouge, which operates a fleet of 110 taxis, said Uber’s entrance into the Cambodian market could ratchet up the level of competition in the sector.

However, he said he welcomed new market entrants and the increased competition, though he held some concerns that Uber’s as-yet unregulated ride-hailing model could lead to unfair competition due to its lower operational costs.

“We are a fully regulated operator and we will welcome any newcomers who are also fully compliant with regulation,” he said.

“We urge the authorities to maintain solid control over who can enter the market and make sure that Uber fully complies with the law in order to create fair competition. In that scenario we would be happy to welcome them in the country.”

Sothea also took aim at the capital’s existing taxi companies, pointing out that many operate without licences and do not pay taxes, unfairly lowering their operation costs compared to legitimate operators. He added that unlicensed companies sometimes engage in price-gouging practices to gain a greater market share, creating a negative image that affects the entire industry.

Uber’s absence from Cambodia has created room for home-grown ride-hailing services to blossom. The largest of these, Exnet Taxi, has enjoyed strong growth since its launch in June. Within two months, the company reported it had registered 60 freelance drivers to the application. That number has now grown to 600 drivers who undertake around 2,000 rides a month, according to Hor Daluch, the company’s owner.

“Now it is much more convenient to use the app than before because the passengers can get a ride in around five minutes, while before it took a lot more time due to the lower number of drivers,” he said.

Daluch said he was not concerned with Uber’s potential entrance in Cambodia, suggesting the company might end up judging Phnom Penh to be too small of a market for its business.

“Because Uber is a big company, maybe the demand in Phnom Penh might not be enough for them here compared to other cities in Vietnam or Thailand,” he said.

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