Uber Faces Uphill Battle To Control Taxis In China

American taxi service application Uber reportedly is seeking to fill several new job positions in Asia Pacific cities such as Seoul, Beijing, Shanghai, Hong Kong, Taipei, and Bangalore, representing the company’s intention to vigorously expand into international markets.

According to reports in Chinese local media, recruitment information shows that Uber is currently hiring operations and logistics managers in China, South Korea, and New Zealand. In February 2013, Uber launched its services in Singapore. Based on the position description at Uber, operations and logistics managers are responsible for signing and promoting taxi drivers to join the team of Uber; monitoring the driving conditions of Uber’s motorcade; and providing the location information of drivers on the demands of users, so as to ensure the best service quality.

Uber previously did not express intentions to enter these markets, but its website has had a contact form for Beijing for quite some time. ChinaTechNews.com contacted Uber a month ago about its Beijing operations, but the company was unresponsive. But on Twitter, the company said it would implement international expansion. At present, Uber has established an account for its services in Taipei, which is like the account in Singapore.

Hailo, Uber’s competitor, has announced plans to enter the Tokyo market. Uber is still undergoing the initial stage of development, but the large scale recruitment is a sign of serious business expansion. To make Uber the first taxi service choice for global users, the company needs to enter more major markets as soon as possible.

As a venture-funded startup company based in San Francisco, California, Uber has a mobile application that connects passengers with drivers of luxury vehicles for hire. Cars are reserved by sending a text message or by using a mobile app. By using the apps, customers can track their reserved car’s location.

Uber’s problems in China are potentially multifold. First, Chinese localities have a history of shutting down both ride-share and taxi services that are not related to licensed taxi companies. Ten years ago during the SARS outbreak, nascent ride-share services were outlawed and “black” or illegal taxis were shunned from the streets of some Chinese cities.

Next, most major taxi companies operating in China’s largest cities already have well-publicized means by which passengers can hail taxis from their phones via either special toll-free numbers or through “private secretary” VIP services. Even foreign visitors to cities like Beijing and Shanghai can phone toll-free numbers for travel assistance around the cities.

Then it is unclear how Uber could be licensed as a business in China. Perhaps they could be a travel consulting service, but then the process of processing invoices and collecting taxes via cab drivers may be problematic.

Finally, “black” unmetered taxis are largely illegal in China, so Uber would need to work via taxi companies who already control large fleets of vehicles. This creates a competitive conundrum, and the local firms may do as well or better without working with Uber.