It’s been 13 days since Uber was forced to stop operating in the Philippines for violating a regulatory order. How are you holding up so far?
Ride-hailing apps haven’t been around all that long, but their impact on consumers has been so consequential that the debate – not to mention the uproar – surrounding Uber’s suspension continues to rage. And if you take note of the arguments against the suspension, most (if not all) of them cite the inconvenience to the riding public to make their case.
The fact is, many Filipinos have come to rely on these ride-hailing companies – a relatively new business model in the local transport industry – to get them from point A to point B, so any disruption to the service is likely to be met with resistance, even anger. And here’s another point to consider: ride-sharing is just the tip of the iceberg when it comes to innovations in mobility. Great strides, for example, have already been made in autonomous vehicles. How will regulatory bodies react if somebody decides to bring that technology to the country?
Deloitte has been closely monitoring developments in the mobility ecosystem because transportation affects so much of a country’s economy and touches nearly every person’s life. Of late, those developments – in technology and in social attitudes – seem to point to a transportation revolution based on driverless ridesharing and seamless multimodal travel.These could pave the way to an ecosystem that moves people, goods and services more efficiently and safely. But as experience is now showing us, we can’t get there without government.
As policymaker and regulator, the government plays a big part in shaping the future of mobility. Finnish law, for example, does not require vehicles on public roads to have a driver, which is probably why the capital of Helsinki feels bold enough to aim to make car ownership pointless. Later this year, the city will debut an autonomous bus service that it hopes will solve the last-mile issue for users of public transport. It would be the equivalent of, say, having a driverless bus that is small enough to navigate Metro Manila’s inner streets take you from an MRT station to your home any time of the day.
In Shanghai, the government backed the development of a 100-square kilometer closed course where researchers can test autonomous vehicles. Columbus, Ohio received $40 million in federal funding to transform itself into a smart city, using technology to, among other things, address road congestion and reduce vehicular accidents.
The transportation environment is moving fast, and countries that welcome innovation and experimentation in mobility stand to gain, not just in terms of convenience for the riding public, but also in terms of attracting investment and talent – which brings us back to the issue of Uber.
Perhaps one positive takeaway from this situation is that the relevant stakeholders are now talking about how to properly regulate ride-sharing companies. This is an important first step to maximizing the potential of this service, while at the same time, acknowledging the policymaker’s responsibility to ensure public safety and security, as well as to mitigate risk.
Here are other steps we can take now to ensure that we’re better prepared for the coming transportation revolution:
Make regulations flexible. Now more than ever, it is important to stay agile as technology advances with alarming speed and disruptions can come from anywhere. Even before the Uber issue has been settled, another ride-hailing company is already looking to start operating in the Philippines, but the concerned regulatory body has already stopped it in its tracks.
Revisit and refine often. A “one and done” approach to rulemaking in the transportation ecosystem is incompatible with the innovative and disruptive technology that now marks that sector. Agencies should review and refresh regulations frequently, focusing on outcomes rather than process or product form.
Convene the ecosystem. As I said earlier, transportation affects nearly every person’s life, so why not involve all the stakeholders in the conversation? Academic institutions, national and local governments, a host of private sector players (such as insurers, telecom companies, and health care providers), and the riding public all have a stake in the crafting of smart, agile regulations. Opening up the discussion to these parties will allow the government to get relevant feedback and tap a wide range of expertise so that we can have a better chance of covering all the issues and crafting the appropriate regulatory checks.
Contentious as the debate has gotten on how to properly police ride-hailing companies, it is a necessary exercise if we are to arrive at a regulatory framework that encourages progress and, at the same time, protects consumers. The future of mobility is a promising one, so hang in there. This is just the beginning.
The author is the Tax & Corporate Services Leader of Navarro Amper & Co., the local member firm of Deloitte Southeast Asia Ltd. – a member firm of Deloitte Touche Tohmatsu Limited – comprising Deloitte practices operating in Brunei, Cambodia, Guam, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.