Uber in China

UBER in China

Assignment Name: Case Study Final Paper – Week 11

Team Plaster

Prudhviraj Allam

Isswor Chhetry

Venkata Pavan Ella

Sapna Rajput

Bharat Veginati

BADM Legal, Ethical, and Social Environment Spring 2018 Main Section 40

Professor Name: Mr. Kevin Smith

Date: 3/31/18

Introduction

Since, the Uber launched in San Francisco in 2010, Ride-hail services have quickly become a popular alternative to traditional taxi services and has expanded rapidly to urban areas throughout the United States. The rapid growth of this modern technology has left regulators and legislators struggling with how to balance the necessary regulation of ride-hailing services while promoting innovation and recent technologies. In the US, regulatory authority over ride-hail services varies from state to state. In certain states, ride-hail services are regulated at a local level, while in other areas the state has the regulatory authority. One of the thorny issues for regulators are the impact of the innovative technology on the traditional for-hire taxi industry and the insurance, tort and employment law issues that have arisen. While regulatory agencies are struggling with how to deal with the recent technology, courts are determining these issues. At present the courts are wrestling with whether ride-share drivers should be classified as employees or independent contractors. This issue has potential implications for overtime pay, minimum wage, taxes and social security, among other things. Once defined as employees, they are entitled to certain benefits, while those defined as independent contractors are not. A Californian district court certified a class action for Uber drivers to assert that they are employees of Uber and entitled to certain protections under the California Labor Code. The court asserted there were several indicators of an employment relationship. While Uber continually maintains that it is a technology company acting as an intermediary between potential riders and drivers, the court found Uber’s role in providing this service should be determined by the Jury before a final verdict can be delivered.

In order to become an Uber driver, must have a commercial insurance and taxi license for respected vehicle. Uber also has Uber Pop service which is additional low-cost service. The people who drives Uber Pop, they don’t want to maintain a commercial insurance and taxi license also there are some terms and conditions under the Uber management. Uber is largest taxi company in world wide. But it does not own any vehicles. If anybody wants a ride from Uber, they need to download an application. Through that Uber app can access the ride with our location details to get the ride from the Uber driver also we can see the driver’s information with contact details and duration of the reaching time to our location. It’s so convenient for everyone to pay the ride fee respected payment options are available in application.

The Member states got lot of trouble from Uber. The sates got protest issues from taxi drivers also some of the states about to ban the Uber application. The issues are relating to concerns regarding public safety and health, well – being of drivers and the liability of the sharing economy practice. Especially the states got the many complaints claimed for ride sharing safety issues instead taking a traditional taxi services.

The regulators in the European Union have deal with these type challenges. Also, they have big regulatory challenges in China market as well. The Uber drives gray zone in china. To deal these type of challenges, Uber losing one billion for every year from the respected country. Other countries have the challenges but not like as same in china. On September 23, 2015, the business agreement happened with China official members in Seattle, Washington. This meeting did not help for Uber’s individual growth. Travis Kalanick’s (Uber’s CEO) strategy did not work with China market. China has regulatory challenges, security issues and privacy problems with the payment options. These issues have not been resolved yet.

Great news for China

As per the China's regulations “By Johana Bhuiyan@JMBooyah Jul 28, 2016, 1.42pm EDT. Uber and Didi are now legal in China but the struggle to sign up drivers may continue. The drafted guidelines require drivers to have at least three years of experience and less than 380,000 miles on their car. When Uber started in China, they have not merged with any other companies. They have been applied so many marketing strategies as well also those were not performed well. When Uber expanded global market, local and national governments struggled to adapt legal frameworks.  

Uber in China

Uber China has more than 10 times licensed taxi drivers than in USA. China Uber has countless unregulated private cars represented one of the largest untapped opportunities and the one that had a lot of space without any government intervention on regulations. But 2015, Uber China was braced as the major battle ground with impending new regulations.

Uber is car-hailing app, has disrupted taxi and transport companies around the world. In China, Uber has the largest and toughest market, the China market is different than other markets. The company was losing more money than anywhere in the world and the reason for its demise is not the competition it was facing; it was the impending national regulations. When Uber entered the Chinese market, the space was largely unregulated. The company founded local entities after these entities to compete in different Chinese markets, a proven strategy, where private companies has tasted success largely due to the lack of regulations and government presence. National regulations for internet taxi companies in every Chinese market is now a reality. The foreign companies like Uber would be subject to even more regulations than its local competitors. When Uber entered the Chinese market, it served a niche market for wealthy. But Chinese reaching out to mass market it invited more government regulations, which ultimately lead to its demise.

July 2016, China’s ride-hailing industry experienced two major turning points.  Late July, the Chinese government has passed a national law that officially legalized Uber, Didi Chuxing, and similar other ride hailing services. Then, days later Uber and Didi announced they would merge, with Didi purchasing Uber’s China operations while Uber took a 20% stake in Didi. The deal also gave the CEO of Uber a seat in the Didi board and vice a versa.

Regulatory Challenges

Uber’s global expansion means it’s struggled with local and national governments to adapt their legal. Uber’s ride sharing model led to the development of new consumer safety and worker protection laws across the world. World-wide the Governments face questions whether it was safe to integrate fleets of untrained citizens driving uninspected cars into urban transportation systems. Many of them faced protest from their taxi industry. Uber countered the safety concerns by claiming that it performs stringent background checks on all drivers and vehicles.  The legal challenges keep coming in the face high-profile cases about individuals with serious criminal records passing the checks and being allowed to drive. Concerned for public safety, governments taking proactive approaches against citing city’s safety, health and consumer protection rules. The challenges for governments across the world was determine how to classify uber as a company so that regulate it. When faced with legal challenges uber shifted its position as a transportation company to a software company citing the lack of its own fleet of vehicles. It presented itself as an internet company which can’t be subjected to transportation sector regulations. Uber used the lack of clarity about its status in the existing regulatory framework as a defense against government claims against Uber's purported violation of taxi licensing laws and fair competition. Apart from the legal in numerous countries that includes Europe and Asia, Uber faced hundreds of lawsuits in the United States alone. While it continually got embroiled in legal disputes with governments around the globe, it continued to be the world’s most highly valued start-up.