In another setback for mega-app Uber, five of its drivers were arrested in Hong Kong on Monday after giving rides to undercover police officers. That was only the beginning of Uber’s troubles as, following the arrests, Hong Kong officials then raided Uber’s office confiscating documents and computers as evidence. The arrests and raid are the latest hiccups for San Francisco-based Uber, as it faces numerous legal and regulatory challenges across the globe.
The sting involved police officers using Uber’s mobile app to hire cars from five different places to travel to Perth Street in Ho Man Tin. The officers then paid by credit card, revealed their true identities and arrested the drivers upon arrival at the destination. Traffic chief inspector Bruce Hung Hin-kau stated that the arrested drivers, aged 28 to 65, were officially charged with illegally carrying passengers for reward and not having the required third party risks insurance.
Regulators and traditional taxi drivers everywhere are continually angered by Uber’s business practices. Uber is a transportation company that provides on demand services similar to those of metered taxis. The difference: users of the Uber app submit a trip request and its “independent contractors” provide the service with their own vehicles. The company is criticized for skirting the law and avoiding certain taxes and regulations that traditional taxis must adhere to, thereby creating unfair competition. They claim Uber drivers are often untrained and not subject to background checks. Taxi companies urge governments everywhere to impose upon Uber the same regulations and taxes imposed upon traditional for-hire car services.
The latest issues in Hong Kong follow the raid of the Uber offices in Sydney by Australian officials. The Australian government insists that Uber’s 12,000 local drivers must collect and pay the country’s 10% services and goods tax, retroactive to August 1st. In April, police in mainland China raided Uber’s officer in Guangzhou, seizing computers and phones. The Chinese government has accused the company of running an illegal car business. Also recently in California, a judge ruled that an Uber driver was in fact an employee of Uber, as opposed to an independent contractor. By using independent contractors instead of hiring employees, Uber avoids significant costs by not having to provide workers’ compensation insurance, etc.
In response to the Hong Kong raid, Uber released a statement that, “Uber ensures that all rides are covered by insurance and all drivers on the platform undergo an extensive background check. We stand by our driver-partners 100 per cent and welcome the opportunity to work closely with the authorities towards updated regulations that put the safety and interests of riders and drivers first.”
As for now, Hong Kong officials are warning the public not to take rides from unlicensed services.