Friday, August 14, 2015

Uber Arrested in Hong Kong

Cops shutting down Uber is nothing new, it seems to be an advertising tactic of Uber.  But Hong Kong is unique among cities of the world, and so its results may be unique as well.  First a few points:

1. China controls Hong Kong and Uber is doing well in China.  From the comments sections:
Uber came to China late and has been trying to gain market share against Didi Kuaidi ever since. Right now Didi owns around 90% of the market share. If anything what's happening now with Uber and Didi is probably one of the most interesting capitalistic stories going on in the tech world right now. It's pure competition between the two with each one coming up with innovative ways to beat the other. Kalanick has already said he's making China, Uber's number one priority and values it more than the US 
Note that Breitbart put Uber shutdown in Hong Kong under the USA national security section.  I mean, really!

2,  Hong Kong would not allow Alibaba to list its stock on its market, so don't think this is to favor Alibaba.

3. Walmart failed in Hong Kong, so don't think American ideas should fit right in.

4. Anyone who thinks Uber is some free market anarchistic movement is delusional.  Uber has a simple offer: Write new regulations for us and what was once a local tax farm and intelligence system will now become centralized.  The tips and other revenue that was once untaxed is now on the record.  Uber offers central governments total information awareness and maximum tax receipts.  Ridesharing is a great idea, just not by Uber.

5. Hong Kong already has an excellent taxi system, most bas owned by the drivers, and a taxi is ready when you are, very easy to hail anywhere and rarely any wait time.  They are cheap, so paying cash is no big deal.  And the standards are so rick-solid complaints are rare.  

6. Yes, the Legco regulates cabs (after the fact) and problems are usually solved by cutting prices, a more free market approach:
In July 2007, it was reported that many taxi drivers were engaged in rampant illegal price-cutting in their competition with call-cab drivers for passengers. Rates offered were up to 20% lower than the metered fares on long-distance trips, with competition being particularly fierce on the airport route. The warring factions took turns to blockade Hong Kong International Airport to air their grievances.[10] Andrew Cheng Kar-foo, chairman of the Legislative Council's transport panel, proposed cutting taxi fares to deal with illicit discounting. 
7.  When I ride a car in from the airport, invariably the cabbie gives me his card and offers a flat rate back out.  This is the competition mentioned above.  Government is just window dressing in Hong Kong, the real government is agreements between people every day in very many interactions.

8.  Hong Kong is probably the single most cosmopolitan and visited city in the world, that is to say more people from more places pass through there than any other.  It needs a reliable, fair price, stable taxi system.  It has it.  Hong Kong is governed by its associations, the Hotel people do not get in gamblers business, the produce people don't mess around in meat, the garment people stay out of jewelry, your reputation is everything and disputes are settled at the lowest level.  

Uber is trying to introduce something new and alien to Hong Kong, and that is total tax collection and centralized control over taxi via "rideshare".  I bet it fails since what makes Uber work, government regulation specifically to benefit Uber in return for total control over rideshare, will not work in Hong Kong just as welfare giant Walmart could not make it there either.

Thanks to Anthony for the lead...

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