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With entry of Grab and Uber, Yangon’s taxi start-ups fight for turf

YANGON — Local taxi start-ups are working to fend off competition from foreign competitors Grab and Uber, as the entry of ride-hailing services shakes up Yangon’s taxi industry.

City taxis are seen among the traffic in central Yangon, Myanmar. Reuters file photo

City taxis are seen among the traffic in central Yangon, Myanmar. Reuters file photo

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YANGON — Local taxi start-ups are working to fend off competition from foreign competitors Grab and Uber, as the entry of ride-hailing services shakes up Yangon’s taxi industry.

Since last year, two local companies — Hello Cab and Oway Ride — have allowed passengers to hire their taxis through their mobile phones, Facebook accounts, company websites and call centres.

The new services have been a breath of fresh air to weary Yangon commuters — about 20 per cent of whom use taxies regularly — who have long had to tolerate bad service, such as haggling over fares and drivers refusing to take them to their destinations during traffic jams and the monsoon season.

Clearly seeing a market opportunity, foreign companies Uber and Grab also entered the market earlier this year, pitting their marketing and technological might against the local start-ups’ market familiarity and cheaper prices.

“Hello Cab and Oway Ride taxi services are already familiar with passengers. It has been over one year and we invested millions of dollars,” said Mr Aung Win, executive director of Hello Cab.

The popular Hello Cab taxi service now has over 900 taxis, offering cars with air-conditioning and pleasant drivers. The company takes between 9 and 12 per cent commission.

Meanwhile, Oway Ride has some 1,000 drivers and aims to increase that to 5,000 by the end of this year.

“We mainly focus on service and polite drivers who can offer good service to passengers. Using our application, drivers can make more money and save time,” said Mr Kyaw Min Swe, the company’s executive director.

RELYING ON TAXIS

Taxis are one of the commonly used modes of transport in Yangon, alongside commuter trains and public buses. But taxi service in the country’s commercial capital centre can be haphazard.

For one, most of the estimated 60,000 taxis plying the streets are operated by individual owners and taxi fees depend on haggling between the driver and the prospective passenger. The taxis do not use fare meters.

This process can be tedious for passengers who just want to reach their destination as soon as possible. The situation becomes more unbearable in the monsoon season.

Moreover, most drivers are not well-trained to provide a professional service to passengers, nor do they use a tracking system via GPS if problems arise.

At night, taxi drivers will usually refuse to accept long-distance destinations. During rush hours, drivers will also refuse passengers if there is traffic jam. However, if they do agree to take passengers during rush hours, they charge exorbitant fares.

Yet 20 per cent of Yangon’s two million commuters use taxis, according to a report by the Japan International Cooperation Agency (JICA). For years, Yangon taxi-riders have endured these inconveniences.

FOREIGN RIVALS

Earlier this year, two international transport service companies — Uber and Grab — began operations in Yangon.

The Malaysia-based Grab taxi service, which already operates in Singapore, Indonesia, the Philippines, Malaysia, Thailand and Vietnam, came to Yangon in March.

Currently, Grab is only operating with a few taxis, and depending on the feedback from users, they will extend their service, said Ms Cheryl Goh, vice-president of marketing for Grab.

“We are very glad to get the chance to help in the Yangon Region government’s plan to reduce traffic congestion,” she said.

Grab takes a percentage for finding passengers for taxi drivers, and plans to roll out a mobile payment system. But for now, passengers pay cash.

The San Francisco-based ride service Uber launched in Yangon last month.

“As far as I know, there were a total of 70,000 taxis in Yangon and we are sure that hundreds of taxis will cooperate with Uber. In South-east Asia, Uber has already been providing service,” said Mr Sam Bool, Uber’s expansion general manager in South-east Asia.

Uber started back in 2010 in San Francisco and now operates in more than 450 cities. Myanmar is the 76th country where the firm operates.

“Yangon is a big city and most people rely on taxis. So Yangon is a crucial market to us. Many drivers and passengers are using mobile phones and we think that they can use our application easily,” he said.

Passengers download the app and sign up using their phone number or email. Passengers who request a ride receive the contact information of the driver and the licence plate number of the car. Waiting time is usually 15 to 20 minutes.

Passengers can track the location of the driver through the app and also share details about the trip with friends and family, to let them know they are getting home safe.

While many passengers said that the Uber application is easy to navigate, the taxi fare is expensive.

Compared with ordinary taxis – which require the skills in negotiation – it costs on average 1,500 kyat (S$1.50) to 2,000 kyat more, a passenger observed.

“Uber is easy to use but expensive,” said Mr Ko Myint Mo Han from North Dagon township.

CAB ECONOMICS

In other countries, local taxis do not like app-run taxi services because they push down cab fares. Local taxis often cannot compete with an international taxi service. But in Myanmar, Uber is more expensive than ordinary taxis, so Uber should rethink their strategy, said Mr Ma Ei Ei Khin from Kyauk Mayuang, Tarmwe township.

Chief Minister Phyo Min Thein said that individual taxi operators in Yangon can join any of those companies and improve services overall for passengers.

“We will allow all taxi service groups to join our market economy. We will not favour or oppress any groups. But I hope that Uber can create a safe and reliable service for passengers in our country,” he said. MYANMAR TIMES

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