26 Apr 2019 Taiwan Legal Update: The New “Uber Clause” and The Increase of Domestic Gasoline Prices
Unfair competition and the Proposed Amendments to Article 103-1 of the Regulations for Automobile Transportation Operators
Close to 1000 Uber drivers protested the new “Uber Clause” in front of the Presidential Office on Sunday 21st April.
The contested amendments to Article 103 would prohibit drivers in cars from rental companies from “driving around” seeking passengers and scheduling shifts to accommodate customers calling for a ride. It also introduces a requirement for fares to be charged by the hour or by the day. The proposed amendment is scheduled to take effect on April 26.
Uber’s current business model emerged two years ago during talks between Uber and the MOTC. A new system was devised, allowing drivers to use cars from rental car companies and accept riders through Uber’s service. Uber Taiwan’s General Manager has cited this as the reason he was under the impression that the arrangement was “reasonable” and “legal'”.
This ongoing dispute dates back to when Uber’s standard hailing service was barred due to their refusal to abide by regulations applicable to transportation companies in Taiwan. Regulations for taxi and transportation services differ from the regulations set for communications services operating in Taiwan. Uber’s claim as a communications service , as opposed to a taxi service, has been rejected by the Ministry of Transportation and Communications. It was found that Uber is operating as a taxi service and is therefore in violation of the law.
On April 23, the MOTC urged Uber Taiwan to register as a taxi service provider if it wishes to maintain its current operation in the country. In order to register as a taxi service, Uber must pay NT$ 5 million (US$ 162,000). For security reasons, it must also ensure its 10,000 drivers operating in Taiwan obtain a taxi drivers’ license and a taxi service operation permit.
Taiwan is Uber’s most profitable in branch Asia. Uber charges drivers a commission fee of 25% of the total fare, per ride. Another suggestion from the MOTC encourages Uber to consider lowering their commission rate. This would result in an increase in the money being earnt by drivers and boost the local economy.
These proposals also aim to increase the competitiveness of local taxi services. In a statement, Uber called this move an “irresponsible” and “unreasonable” method of tackling the conflict between Uber and local industries. Similar to their 2016 dispute in Austin Texas, this new rule has the potential to threaten the livelihoods of 10,000 drivers.
Uber has previously clashed with regulators all over the world. Workers’ rights, safety and regulations are some of the key concerns. In a dispute with regulators in Denmark, Uber reaffirmed its commitment to “play by the rules”. However, it is inevitable that Uber will disrupt traditional markets. Regulations ought to be realistic and in line with automation. Uber concludes, ” this approach shows a refusal to recognize how our app works, how rental car drivers want to work, and how consumers want to commute”.
Increase of Domestic Gasoline Prices in Taiwan and Environmental Protection
On the 22nd of April, Taiwan’s CNPC increased the price of gasoline and diesel by NT$0.60 and NT$0.10, respectively. The adjusted retail prices now stand at:
- NT$28.50 (US$0.92) per litre for 92 octanes unleaded
- NT$30.00 per litre for 95 octanes unleaded
- NT$32.00 per litre for 98 octane unleaded,
- NT$26.80 per litre for super diesel
Fuel prices are adjusted based on weekly changes in the price of international crude oil. The state-run oil refiner CPC Corp., Taiwan uses a weighting of 70 per cent Dubai crude and 30 per cent Brent crude. On the basis of this formula and the appreciation of the Taiwan dollar, domestic prices of gasoline and diesel were set to raised by NT$ 0.90 and NT $0.10 per litre, respectively. However, the lowest price of sub-contenders is the upper limit. Therefore, the gasoline increased by 0.6 and the remainder to be absorbed by Taiwanese oil.
The key factors which contributed to the continued rise in international oil prices were the decline of crude oil production in Venezuela and OPEC and Russia’s gradual implementation of the production reduction agreement. The price of oil is adjusted weekly, based on international factors. The magnitude of the fluctuation depends entirely on the calculation of the oil price formula. Another contributing factor to this fluctuation trend is that almost all of China’s oil sources are imported from abroad.
Consequently, the CNPC has urged consumers to recognize the limited nature of oil reserves, observe consumption and contribute to global environmental protection. Consumers are also urged to pay special attention to the performance of “fuel consumption” when purchasing vehicles. The Energy Bureau of the Ministry of Economic Affairs cited “correct driving habits and regular maintenance” as a means of reducing carbon dioxide emissions and saving fuel.
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