It was a story waiting to hit the headlines. Just a matter of time and yet surprised it has taken so long.

A global taxi booking service had become the darling of venture capitalists.

Uber was making waves across the world for its innovative approach to business; a popular taxi service that does not own cars nor employ drivers.

It connects customers with the nearest driver within minutes through a mobile app, bringing, what it says is, much needed competition to the global taxi industry.

From a smartphone, a cab can effectively be hailed and the assigned driver seen as a moving dot on the handheld device as it makes its way towards the pick-up location. The vehicle can be a taxi, private car or rideshare at any time of the day, saving the hassles we all face of booking a normal taxi.

Uber drivers need only a valid driving licence as well as a commercial licence to drive professionally in a given city.

But lack of regulation means Uber can offer lower rates than established operators, hence its popularity among customers – but at what cost?

The San-Francisco based company has expanded rapidly since its 2009 launch. It now operates in more than 250 cities across 50 countries.

Earlier this month, Uber was valued at $40bn following its latest round of fund raising.

However, headlines this week are far from pleasing. Five years after launching, it faces a crisis that, surprisingly, is only now being addressed.

In the space of a couple of days, the company has been rocked by decisions that would affect its business model and those that copied it.

Spain, Holland and India have banned Uber from operating until further notice.

Good news for taxi drivers and taxi associations worldwide who have been up in arms about Uber’s services clawing away their business. Even local authorities and representative bodies have expressed concern.

Among the most vocal have been established taxi firms such as London’s renowned “black cabbies.”

There are ongoing protests by taxi bodies worldwide, especially in popular tourist hotspots such as London, Berlin, Paris, New York, Bangkok and Sydney, where business is being taken away by unregulated cab operators that compromise safety and security.

Uber has disrupted much of the taxi industry, threatening some companies’ very existence and the livelihood of their drivers.

But despite industry concerns, consumers have been warming to ‘app’ taxi services like Uber which use smartphones to hail a cab.

This week, however, pressure on authorities by established operators seems to have paid off.

In Spain, a judge ordered Uber to stop operating across the country after a series of protests by local taxi associations.

In his ruling on the ban, the judge said Uber drivers did not have official authorisation to operate and accused the service of unfair competition. The move followed a complaint lodged in court by the Madrid Taxi Association.

The UberPop ride-sharing service, according to Uber, is designed to help people share the costs of car ownership and, in turn, help them give up their vehicles.

The Spanish court said after the ruling: “drivers lack the administrative authorisation to carry out the job, and the activity they carry out constitutes unfair competition.”

While the ruling is inconsistent with the European Union on the benefits of sharing economy services, it could set a precedent in other countries as the powers look to follow suit for the sake of job protection and passenger security.

On the same day, judges in The Netherlands banned the UberPop ride-sharing service, which was launched as a pilot project in Amsterdam between July and September and later extended to The Hague and Rotterdam.

“Drivers who transport people for payment without a licence are breaking the law,” said the decision from the Hague-based Trade and Industry Appeals Tribunal.

But it is a case in India causing much outrage and sounding alarm bells.

A female passenger used the Uber smartphone application to book a taxi to take her home in the capital Delhi. She claims she was taken to a secluded area and raped by a driver who had been working for Uber.

It emerged that background checks on the driver in question were inadequate. He had previously been held on suspicion of rape three years ago before being acquitted.

The case has stirred up the Indian public once again, concerned over the alarming number of attacks on women, highlighted by a number of high profile cases over the last two years.

As a result of this week’s incident, India has ordered state governments across the country to stop operations immediately of all unregistered internet-based taxi companies after it was revealed there had been a failure to regulate the growth in app-based taxi services across the country.

The response from Uber has been shocking to say the least – and it raises questions about how the basic ethics of doing business are not followed.

How can any business operate without taking due care and attention, and proper measures before promoting its wares. This applies to any employer in any industry.

Uber CEO Travis Kalanick said after the Delhi incident that his company would work with the Indian government to work out new safety measures “including background checks on drivers.”

“We will partner closely with the groups who are leading the way on women’s safety here in New Delhi and around the country and invest in technology advances to help make New Delhi a safer city for women.”

A shocking admission that not enough is done. Instead, a business application is used in the pursuit of financial gain, yet lacking the necessary protocols in which to operate professionally, efficiently and viably.

This is not solely an India thing.

If it can happen in Delhi, it can happen anywhere in the world.

Uber champions its “industry-leading standards” for vetting its drivers saying background checks are more vigorous than those in the traditional taxi industry.

But across the US, it is clear, financial return comes ahead of anything else. There have been a number of cases filed against drivers for misdemeanours.

To secure as many drivers as possible, Uber has fought against legislation requiring background checks as strong as those demanded of traditional taxis.

In other words, it has actually been pushing for less regulation. More drivers, more choice, means more business – as simple as that. Regulation is not on the radar.

For fair and equal competition, however, the same principles must apply to all.

There’s nothing wrong with open competition, but as long as it is regulated and offer the public anywhere in the world the protection they fully deserve. That’s what matters.

But sadly in today’s highly charged commercial world, profit comes before anything else.

In the context of this column, cheaper taxi rates offered by companies such as Uber can prove to be a hefty price to pay by consumers without the protection of full regulation – and that is compromising personal safety and security.

 

Updesh Kapur is a PR & communications professional, columnist, aviation, hospitality and travel analyst, social and entertainment writer. He can be followed on twitter @updeshkapur

 

 

 

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