Local taxi operator Hello Cabs is suing Singapore ride-hailing app Grab for inappropriate use of data under the Competition Law, said U Aung Win, managing director of Dagon Logistic Co, which operates Hello Cabs.
Before Grab and its peer Uber came to market in Myanmar this year, Hello Cabs and Oway Ride were the only two local taxi operators providing ride-hailing mobile services in Yangon.
That all changed in September 2016, when, prior to it entering the market, Grab and Hello Cabs discussed potentially cooperating to provide mobile taxi services in Yangon. As part of the deal, Hello Cabs shared data related to its strategy and the Yangon taxi industry with Grab.
‘’We discussed cooperating with Grab in September. In October, we gave them the data after signing a Memorandum of Understanding. However, we did not receive any subsequent response from Grab and they did not return the data we shared with them. So we decided to sue,” said U Aung Win.
Hello Cabs first sued Grab in July 2017, three months after Grab launched its mobile ride-hailing taxi service in Yangon. In May, Grab was joined by US-based competitor Uber in the local market. The Singapore company has not responded to Hello Cabs since, said U Aung Win.
“When entering a new market, operators need data, which is very important. Grab took our data and is now operating in the market based on that information. We have already filed a complaint with the police,” U Aung Win said.
Under the Competition Law enacted in February 2015, a company cannot take or use data belonging to competitors. If guilty, the offence is punishable by a 2-year jail sentence or fine of no more than K10 million or both.
When contacted, a spokesperson for Grab said: “There is no basis for the allegation and we are collaborating fully with the authorities on this matter. Grab dose not engage in anti-competitive practices and believes in operating its business based on market forces.”
Since Grab and Uber started operating in Yangon, Hello Cabs and Oway Ride have urged the government to regulate the industry as soon as possible.
They point out that, according to the law, a business cannot compete for market share by selling below the market price. “But Grab and Uber have reduced their fares by too much and we are not able to compete,” said U Aung Win.
The way he tells it, “we were already running our business before they came. We have two years of experience in the Yangon market and we are also Myanmar nationals. If the industry is not regulated to ensure fair competition, we will shut down and Grab and Uber will monopolise the taxi industry,” he said.
In response, Grab’s spokesperson explained that under its pricing model, “fares fluctuate according to real-time market demand. We encourage all ride-hailing companies to strive to provide the best user experience for their customers.” The spokesperson declined to comment further.
To ensure fair competition between the 4 operators in the mobile ride-hailing space, the government has said it would work with the Yangon Region Transport Authority to implement new rules to regulate the sector.
Earlier this month, Daw Nilar Kyaw, Minister of Electricity, Industry, Transport and Communication said in the Yangon Parliament that regulations governing ride-hailing businesses would be set “soon.”
In 2015, there were 2,000 taxis using Hello Cabs mobile app. That number has since decreased, with Hello Cabs saying in mid-year that its app was outdated and would undergo a software upgrading process to become more user-friendly.
In comparison, Grab has recruited up to 6,000 taxi drivers in Yangon since launching in April. Nevertheless, the service was reported to have received a large volume of complaints from riders during its first few months in operation.
All four operators compete fiercely by lowering their fares through various promotions.
18 DEC 2017
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