Lebanon News

Uber Beirut to be shut down unless it plays by rules

Uber Taxi.

BEIRUT: The mobile application driven Uber taxi service is operating illegally in Lebanon and will be shut down in a few days if it does not comply with local regulations, a member of the Taxi Companies Syndicate said Sunday.

“Uber is working in Lebanon in an illegal way,” said Charles Abou Harb, president of the Taxi Syndicate and general manager of Beirut’s Charlie Taxi service. “They are working without the proper license and the red [license] plates that are required for a taxi driver or company.”

Abou Harb said Uber was informed by authorities at the tail end of last week that it had 15 days to comply with local regulations or it would face legal repercussions which include a shutdown in operations.

Uber is a cashless taxi service that works via mobile application. The user downloads the application and puts in a credit card number which is charged each time the service is used. With Uber, cash never changes hands.

Uber, however, claimed it was not violating any local regulations. “It is important to recognize that as a technology company we do not employ drivers or own cars, and are fully compliant with local structures in place,” an Uber representative told The Daily Star.

“What we do is match riders to the nearest licensed driver via our smartphone application, bringing safety and transparency to the current supply,” Uber Beirut’s General Manager Sebastian Wakim told The Daily Star. “Before partner drivers join our platform, we check all their documents and interview each one personally.”

According to Wakim, riders see the driver’s photo, name and license plate and can share their route and arrival time with friends and family.

In cities around the world, Uber has made a massive impact on the local taxi market. Taxi drivers have recently complained and protested against Uber in Washington and Paris. In Lebanon, however, the service has had a minimal impact.

The fact that Uber does not utilize cash has driven it forward in many Western markets. But Lebanese taxi services said the same feature has held it back with the local market.

“The credit card idea in Lebanon is still growing and not everyone trusts to pay by credit card,” said Chadi Tannous, operations manager of Lebanese taxi service Allo Taxi.

“In Lebanon we don’t like the credit card for something as simple as using a taxi,” said Mohammad Nsouli, an employee at one of Beirut’s oldest taxi services – Lebanon Taxi.

Many taxi companies allow clients to pay with cash or credit or debit card and also give them the option to open a tab that will be settled at the end of each month.

“Lebanon has a totally different way of working and no application can ever apply here,” Lebanon Taxi’s Nsouli said.

“Never,” he added for emphasis.

While the idea of a cashless system has still not taken off in Lebanon, other taxi services countered Nsouli’s claim that the mobile application taxi option would fail.

For example, Tannous said that Uber’s strategy of using a mobile application as an option – and not the sole means of ordering, as is the case with Uber – has helped his company’s business exponentially.

“We have doubled business with the application,” he said. “The youth use it instead of calling, and booking via app saves credit and time.”

Abou Harb said that Charlie Taxi was also planning on launching a “very technological” mobile application in the new year and predicted that the popularity of mobile applications would skyrocket over the next few months.

“Our business in Beirut is doing great,” the Uber representative said, though he added that company policy did not allow him to discuss revenue figures. “Riders love the fact they can get a safe, stylish ride at the tap of a button and our partner drivers enjoy the flexibility and efficiency the technology provides them.”

Business practices aside, customers who have used Uber said that while their first impressions were bright, a lack of consistency in car quality made them revert back to their trusted taxi services.

“The first time I took Uber I thought the cars were amazing,” said Fady Mansour, a social media strategist. “But the last time I took it was a very poor [quality] car.”

Mansour said Uber’s problem was that it lacked consistency and that while the price for value was fair, other companies were cheaper and provided more consistent service.

“Their niche is small and the service is more expensive than others,” Mansour told The Daily Star. “If they want to survive they have to realize that if you are paying ‘x’ amount then you should get a certain standard.”

 
This article was amended on Tuesday, November 11 2014

In reference to the article titled “Uber Beirut to be shut down unless it plays by rules” published in print and online on Nov. 4, 2014, The Daily Star received the following response from UBER’s general manager:
Uber is running business as usual and innovating within the framework of the law. We are in constructive dialogue with policymakers about how our technology works. We know by the demand we see for Uber services that Beirut recognizes the benefits of new and innovative services that are safe, reliable and convenient and at an affordable cost.
The title of the article has explicitly expressed a highly speculative matter presented as a fact rather than a quoted opinion of Charles Abou Harb, general manager of Charlie Taxi and president of the Taxi Companies Syndicate. As the opinion was not factual, the title should have been in quotes and attributed to Mr. Abou Harb. As you know, only the government authorities can say what is legal and illegal and what consequences should be imposed if found illegal.
Such statements are quite irresponsible and presumptuous, if not malicious.
We reiterate that Uber is a smartphone app company that connects riders and drivers. We neither operate nor own taxis nor employ drivers. We are a law-abiding technology company prioritizing safety and transparency for the greater service of the people of Lebanon.
We ask your publication to clarify this matter in the interest of balanced and fair reporting.
Yours truly,
Sebastian Wakim
General Manger
Uber Beirut

A version of this article appeared in the print edition of The Daily Star on November 04, 2014, on page 4.

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