Battling to keep its foothold in London — its largest market in Europe and crucial to its plans to becoming profitable — Uber may soon be confronted with a similar situation in Singapore, the beachhead to ASEAN that is home to more than 600 million consumers.
In Bloomberg’s latest exposé on Uber and its complete irreverence for the law in the markets it operates in globally, there lies a bombshell that could have serious repercussions for the ride-hailing giant in Singapore.
The story by Eric Newcomer reveals a previously unreported program called Surfcam used by the US firm to undermine its competitors. Surfcam, two people familiar with the project told Bloomberg, was used to scrape “data published online by competitors to figure out how many drivers were on their systems in real-time and where they were.”
The program was primarily used to target Singapore-headquartered Grab, Uber’s largest rival in Southeast Asia that is backed by state investment firm Temasek’s venture capital arm Vertex Ventures. The apparent illegality of the program was enough for alarm bells to ring within the legal team at Uber, which was usually more than a willing partner to such shenanigans.
The Bloomberg report also quotes an Uber source expressing concern that Surfcam could run afoul of Grab’s terms of service or Singapore’s strict cyber crime laws. The decision to use the program in the city-state, well-known for its rigorous laws, was audacious at best and could prove disastrous for the firm following the revelation.
“We have full confidence in the capabilities of law enforcement agencies to investigate these allegations. Uber’s alleged practices have not impacted Grab’s dominance in ride-hailing and Grab remains focused on growing our business and cementing our unassailable market leadership. We uphold ourselves to strict quality management standards and internal governance, and work closely with regulators and governments in all the countries that we operate in for nation-building efforts,” a Grab spokesperson said, in response to a detailed query from this portal.
The Grab spokesperson further said the firm was of the view that entities should be responsible corporate citizens, and added that it believed ‘companies should be held accountable by the government and public for their corporate behaviour’.
Vertex Holdings Group CEO and President Kee Lock CHUA reiterated that Uber’s tactics had no impact on Grab’s business or market leadership, and added that this was another example of the American firm’s ‘take no prisoners’ and ‘the ends justify the means’ culture.
“It is sad to see that a once-great company has to resort to such shady tactics just to make sure it can compete. Uber, in their pursuit of short-term success, has lost their soul and forgotten their stakeholders. (Grab founder) Anthony and his team understand from the onset that their stakeholders are drivers, consumers and regulators,” Kee Lock said.
When asked if Vertex would take up the issue with the Singapore government, Kee Lock said he was confident that that the city-state’s Land Transport Authority (LTA) would look into it and take the right steps ‘to make sure competition was fair’.
DEALSTREETASIA also reached out to potential Uber investor SoftBank, but the latter declined to comment. SoftBank is also an investor in Grab.
A source close to Grab mentioned that the US firm may also face increased scrutiny over the tax it pays in Singapore. Its Southeast Asian rival alleges Uber manages to pay very little Goods and Service Tax (GST) by routing its Singapore revenues to a subsidiary in the Netherlands. While this is not an illegal practice, Grab is lobbying with the city-state government to close the loophole that allows digital firms such as Uber to pay lower GST.
Uber has already had a tough ride in Singapore. In August, the firm admitted to knowingly renting 1,000 defective cars to drivers in the city-state, one of which caught fire.
The US firm is already facing a federal probe over whether it broke laws against overseas bribery in Asia, with focus on suspicious activity in at least five countries – China, India, Indonesia, Malaysia and South Korea. That probe led to the firm announcing a review of its Asia operations.
Running afoul of law and regulation is nothing new for Uber but its actions seem to be finally catching up with it. The ride hailing giant was stripped of its license to operate in London for demonstrating a “lack of corporate responsibility” relating to reporting serious criminal offences, obtaining medical certificates and driver background checks. The company is now appealing against the ruling as its cars continue to ply in the city until it exhausts the appeals process.
Following the latest revelation, one wonders if Singapore could be the next London for Uber.
Uber and other run-ins with the law
In August, Uber had to pay $10 million in penalties to the Philippines after its operations were suspended for a month for violating a government order to stop accepting new driver applications.
Brazil is considering legislation that could make services such as those offered by Uber illegal or treat ride-hailing companies similar to traditional taxi firms, thereby increasing their licensing requirements.
In China, the commerce ministry is investigating Uber’s deal with Didi Chuxing that created a roughly $35 billion giant dominating the country’s ride-hailing market.
Uber recently said it will suspend its unlicensed service UberPOP in Oslo until Norway introduces new rules.
In December last year, Taiwan passed an amendment to a law imposing steep penalty on Uber and its drivers for acting as ‘illegal taxi operators’.