Uber Malaysia views challenges as opportunities

KUALA LUMPUR: Uber Malaysia Sdn Bhd, a fully-owned subsidiary of Uber Technologies Inc, is confident that regulations will move in favour of technology that facilitates competition, lowers barriers to entrepreneurship and more choices for consumers.
Uber is not new to controversies and is the subject of ongoing protests and legal action from taxi drivers, taxi companies and governments around the world. The legality of Uber has been challenged and is an ongoing debate in Malaysia.
Uber Malaysia general manager Leon Foong (pix) said from a policy and regulatory standpoint, it wants to work actively with the government to help achieve the goal of encouraging more Malaysians to use public transport.
He said the Land Public Transport Commission (SPAD) is looking at reforming the taxi industry and improving the quality of service, and these are values that Uber and the government share.
"Key to that is having close relationship and using technology and data that we have to assist in any way possible," Foong told SunBiz in an interview recently.
Uber was launched in Malaysia in January 2014 with the premium offering Uber Black and subsequently low-cost option Uber X, introduced in August 2014. It now has over 20,000 active driver partners and 200,000 unique riders, the majority of which are in the Klang Valley.
"In any market that we operate in, we're bound to face regulatory-related issues and questions. In fact, whenever we plan our strategy and business, we take these issues into consideration. But we don't see these regulatory challenges as issues. We see them as opportunities.
"We're actually solving a huge problem that we both want to solve together. We can offer our technology and they also have their know-how as regulators and we can work together," said Foong.
He said the issue is not so much about SPAD, Uber or other ride-sharing business models but how to encourage more Malaysians to use public transport, and to make it more reliable and affordable.
"We're in over 350 markets now and we realised that when on-demand transport becomes reliable, when you can get a car under five minutes consistently, and when it's constantly cheaper than other options, people naturally would want the cheapest, most convenient way of getting around. All these things help to grow the market."
Canberra (Australia) and the Philippines are jurisdictions where ride-sharing has been officially recognised.
Meanwhile, Foong disclosed that there are Malaysian investors who have invested in the global company, but not on the local level, as all investments are directed into its global headquarters in San Francisco, California.
"We always value investors who can bring additional strategic value to us, like an understanding of the local market and business environment. With all these strategic investors that come onboard, being able to leverage on key learning is something that we always seek. We try to localise as much as we can and learn to best operate in this market," said Foong.
Uber Malaysia targets three to five times growth in revenue every year and, historically, the company has either met or exceeded its target.
"We always want to grow in a sustainable manner. We want to allow tens of thousands of driver partners to join our platform and to enjoy the flexibility and earning opportunities. We need to do it in a way that allows us to make sufficient money for us to invest back into the business, and to create a better experience for both riders and drivers."
Foong said the majority of its driver partners drive lessthan 40 hours a week, and are considered part-timers. Drivers keep 80% of the fare, while Uber takes 20%.
"For every new driver partner that comes onboard, they need to be profitable even on a per driver basis. That's what we focus on, to make the highest ROI (return on investment) on every single dollar spent.
"We're not afraid to invest in profitability and creating bigger market share but eventually, every single dollar needs to translate into profitability."
In line with the government targeting 40% urban population utilising public transport by 2020, from 19% now, Uber is focused on making the city more efficient with its ride-sharing app.
"With key projects such as the MRT coming up, we see last mile transportation as a fast growing sector. As a technology company, we want to use our technology to participate in the fast-growing industry," said Foong.
Uber is currently available in the Klang Valley, Selangor, Penang and Johor Baru.
Foong said it is looking at the possibility of introducing Uber in Malacca or East Malaysia by the first quarter this year, as these are popular tourist destinations and natural markets for the company to extend its service to.