23 October 2016
Police raid Uber's offices just months after the government trumpeted the company on the InvestHK website (inset). Photos: HKEJ, internet
Police raid Uber's offices just months after the government trumpeted the company on the InvestHK website (inset). Photos: HKEJ, internet

One app, one world but not in Hong Kong

How quickly people forget.

Only three months ago, the Hong Kong government welcomed Uber with open arms, hailing it as a success in its efforts to attract foreign investors.

So, when police raided Uber on Tuesday for “offering unlicensed services”, the move raised a lot of questions, mostly about the government.

Was it a case of the right hand not knowing what the left hand was doing? Did the government mislead Uber?

Or did it suddenly realize Uber wasn’t a good idea after all and decided to jettison it.

This would have been unthinkable just three months ago when InvestHK, the government agency that helps bring foreign direct investment to Hong Kong, praised the vehicle-hailing company for giving Hong Kong an innovative choice.

InvestHK gave Uber significant support including advice on market entry and business strategy and information about Hong Kong’s transport industry.

When Uber Asian expansion head Sam Gellman wrote about Hong Kong’s advantage in “combining global commerce and local culture”, and in marrying “startup entrepreneurship with innovation”, InvestHK made sure prospective foreign investors knew about it by publishing the article on its website.

The article, One World, One App, outlined Uber’s vision of safer cities, smart transport and logistics systems and improved income for drivers.

But hours after the raid, the article was nowhere to be found. (Readers can check for a cached version of the article.)

To be sure, Uber does not have the most straightforward business model.

It’s illegal in some countries and subject to certain restrictions in others.

That’s because it operates in a gray area where regulations are yet to be in place, but mostly because it’s disrupting incumbent players and turning the status quo upside down.

The government knew this even as it encouraged Uber to set up a regional base in Hong Kong.

Uber opened its Hong Kong office last year and began hiring people — 25 at last count — to handle administration, marketing and operations.

Meanwhile, taxi operators were beginning to feel the pinch of unwanted competition from the newcomer.

There have been clashes between cabbies and Uber drivers.

Hong Kong people don’t see Uber the same way taxi drivers do. 

Most passengers like the idea but many patronize Uber as a show of protest against deteriorating taxi services and a rise in abuse such as overcharging.

Also, complaints about taxi drivers refusing hires have been rampant.

To be fair, taxi operators who spend millions to acquire a license and comply with regulations have reason to complain against a rival that is required to do none of those things.

Which is why there have been calls from transport industries around the world to bring in relevant regulations to ensure a level playing field.

There’s no question Uber must play by the rules but the government’s approach to the whole saga speaks to its integrity — or lack of it — when dealing with foreign investors.

InvestHK may have forgotten how it’s done and foreign investors may be feeling put out as a result.

But regardless of how governments behave in the face of relentless technological innovation, they will have to accept that the so-called “sharing economy” that drives the likes of Uber and other trailblazing players is here to stay.

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EJ Insight writer

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