Taxi Market in South East and South Asia

Gustavo Petro, Mayor of Bogota Columbia once said “A developed country is not a place where the poor have cars, its where the rich use public transportation”, whilemobility and public transportation is a complex puzzle for urban policy makers around the world, taxi services is the key missing piece. Taxi services complete the puzzle by providing the last mile connectivity with its individual, mostly door-to-door micro transit service.  

Despite being such a key component it has been one of the most ignored public transportation mode for the policymakers and users alike. The ignorance in the past has led to a disorganized industry with a huge potential of growth. Perhaps when the character of Travis Bickle in the movie “Taxi Driver” (1976) said “One of these days, I am gonna get organized” he meant it for the whole industry.

However very recently the industry experienced a paradigm shift around the world and both developed and developing countries went through the same transformation. The emergence of new technology players changed the dynamics of the industry and alarmed the policy makers about its importance and role in the public transportation puzzle.

South East Asia and South Asia region has a total population of 2.13 billion and 1.6 billion respectively making it around 50% of the total world population. The economy of these countries are in different stages of development  some of the countries such as Singapore, South Korea, Japan, Taiwan and Hong Kong are developed economies, whereas some of the countries such as Vietnam, Cambodia, Laos, Pakistan and Bangladesh are still developing economies. The humongous population pressure and booming economies has led to an ever increasing demand for mobility in the region, leading to increased private vehicles in some countries and public transportation in some.

A quick status check on the existing modes of public transport in each country is gives a snapshot as below:

A deep dive into the taxi industry in these countries based on the available information shows that there are around 13.7 million taxis (including limousines and private hire vehicles) in South East Asia and South Asia Region ( not including Laos and Bangladesh), of which around 12.3 million taxis are registered in only India and China.

Number of People (in Countries) per Taxi 

Gross numbers however can be deceptive and a closer look at the available data indicates that Singapore has highest per capita taxi availability with one taxi for every 86 inhabitants. China is a close second and with such a huge population to support it is emerging as the fastest growing market for taxi services in the world with 136 taxis per capita. As the data indicates developed countries have better per capita availability of taxi vehicles, except for Japan whose strong railway network and lower wage levels justifies for the taxi inadequacy.

The region has shown mixed reactions to the technology driven taxi applications (apps or app companies), some of the countries have accepted them with open arms, while some have been rigid and have given no different treatment than their existing taxi network.  A comprehensive look at the status of policies and regulations related to ride-selling app (also called ride-sharing app or e-hailing app or transport network companies or cab aggregators or third-party online booking platform) is as follows:

Country	Status	Regulatory Framework
Singapore	Legalised	LTA Singapore has introduced “Third Party Taxi Booking Service Providers Act” with effect from 1 September 2015
Malaysia	Legalised	SPAD Malaysia has issued Taxi Industry Transformation Programme (TITP) to reform the taxi industry, including legalizing e-hailing operators
South Korea	Not allowed	There is no separate regulation and policy for ride-sharing companies and app companies required to follow same regulation applicable to taxi companies
Thailand	No Separate Policy	There is no specific regulation in Thailand for ride-selling apps. Taxi companies need to register with the department
Indonesia	Legalised	The Ministry of Transportation (MoT) officially issued rules for transport services-based applications in April 2016
Philippines	Legalised	Philippines was the first country in South-east Asia to legalize ride-sharing companies (also called as Transport Network Companies) in May 2015
Vietnam	Legalised	In April 2014, the government released the guidelines for ride-selling application. Technology players are required to sign contracts with local transport companies
Cambodia	No Separate Policy	Traditional taxi companies obtain a license from the government and City Hall to operate a taxi service
Laos	No Separate Policy	Taxi market in Laos is very small and unorganized in Laos. There are metered taxis in Vientiane
Japan	Not allowed	There is no separate regulation for ride-hailing companies in Japan. The operators need to follow the same rules and regulations, applicable for conventional taxis
Taiwan	Not allowed	Taxi companies must be domestically owned and operated. The government has refused to propose a separate act for technology firms
China	Legalised	The Chinese government released the Interim Measures for the Administration of Online Car-hailing Operations and Services in July 2016
Hong Kong	No Separate Policy	There is no separate regulation for ride-hailing services in Hong Kong
India	Legalised	Ministry of Road Transport and Highway (MoRTH) has released new Taxi Guidelines in December 2016
Sri Lanka	No Separate Policy	There is no taxi regulation in Sri Lanka. Thus no regulation has been is prepared for app companies
Pakistan	No Separate Policy	There is no regulation for app based companies. Taxi market in Pakistan is in a nascent stage only so there is no resistance from the local taxi companies
Bangladesh	No Separate Policy	There is no separate policy for ride-hailing companies. A company needs BRTA permission for running taxi services

Of the 17 countries in the region, 7 countries has accepted the existence of the technology driven taxi applications and  legalised ride-selling companies, whereas, 3 countries (South Korea, Japan and Taiwan) has put legal hurdles for  these technology players. The app based technology driven companies, such as Uber, are facing huge resistance from the local governments as well as the existing taxi drivers and operators of those markets.

There is a plethora of local taxi related apps available in different countries. With presence in 14 countries (Singapore, Malaysia, South Korea, Thailand, Indonesia, Philippines, Vietnam, Japan, Taiwan, Hong  Kong, India, Sri Lanka, Pakistan, Bangladesh) Uber is the largest app in the region, followed by Grab with presence in 6 countries (Singapore, Malaysia, Thailand, Indonesia, Philippines, Vietnam). However, when it comes to highest number of riders per day China based Didi Chuxing is the largest app in the region. Some of the apps are dominant in their respective countries such as Ola in India, Kanko Taxi in South Korea, Line Taxi in Japan, and Careem in Pakistan.

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