Southeast Asia's has a notorious taxi market with inefficient cartels and obnoxious prices. However, an app called Uber has caused the market to be brought back into the equation give some control over price back to the consumer.
Uber is a mobile booking application which allows a customer to hail taxis via their smartphone. Payment is made by credit card and across the world this has resulted in more competitive pricing fending off legal and regulatory challenges.
San Francisco based Uber was founded in 2009 by Google Ventures. it now operates in Malaysia, Indonesia, Thailand, the Philippines and Vietnam after first entering Southeast Asia in Singapore last year.
Uber is worth $18.2 billion and it uses smartphone and satellite technology to match the supply and demand of taxis.
Jakarta, Kuala Lumpur, Manila, Phnom Penh and Bangkok are amongst the top ten worst cities to hail a taxi according to a list comiled by tourism-review.com in March.
Before Uber came to Singapore, taxis would disappear during peak hours. Cab drivers would refuse to pick up roadside passengers and the system relied on phone bookings. The problem across the region was also high fares, especially during off peak timings, when taxis were scarce and during rain and flood.
Now not only does Uber encourage price competition in the transport industry but other apps are cropping up too giving Uber competition. Uber executives however say that they encourage competition. "As long as people are giving people options, that's a good thing," said Michael Brown, Uber's Southeast Asia general manager, to AFP in an interview.
Other applications that are becoming popular are locally based. They include Malaysia-based GrabTaxi, Indonesian Blue Bird and Easy Taxi which is backed by the German startup, Rocket Internet.
"What makes Uber bristle is when special interests try to protect monopolies and keep new entrants and new competitors out," said Brown, speaking of the cartelisation of the market.
With technology on their side the monopolies might be over. Traditionally it is the responsibility of governments to ensure that markets operate freely and suppliers do not take advantage of consumers in their price setting. Most countries have stringent laws against monopoly interests but enforcement is either weak or the system is corrupt and allows this to happen. Uber is one unique case of the market stepping back in without any political or legal intervention; not because it made sense because the system was unfair but because as a product, Uber makes economic sense.