Uber is expanding the option of cash payments to another market in South East Asia, testing cash payments in Bandung, Indonesia. It now accepts cash payments in six countries globally, three of which are in South East Asia.
The Bandung rollout is a gradual one over the next few weeks, with Uber noting that not all riders in the city will see cash as a payment option right away as it’s testing “different groups and user preferences”.
The move follows earlier cash pilots in South East Asia, such as one in Hyderabad in India in May — followed by four more Indian cities in July. (It now offers a cash payments option in all 22 Indian cities where it operates.)
Earlier this year it also enabled cash payments in Nairobi, Kenya. Other cities where Uber users can pay cash currently are: Jeddah and Riyadh, in Saudi Arabia; Hanoi and Ho Chi Minh City in Vietnam; and Manila in the Philippines.
Uber’s push to grow in emerging markets is an obvious driver for it to expand a cash payment option — given cash remains the dominant payment option for many people in these markets.
But the more interesting acceleration here is Uber’s continued focus on seeking growth in emerging markets — regions where there may be less regulation standing in the way of how it typically operates its business.
Point being, regulatory and legal disputes continue to stymie Uber’s expansion in Europe, with various bans on aspects of its service in multiple European countries. And more potential changes on the horizon — in the U.K., for instance, Transport for London is currently consulting on changes to regulations for private hire vehicles which could impose significant limits on how Uber can operate in the city.
While in Germany, Uber’s business has traveled from launch in its first city (Berlin) at the start of January 2013 to adding four more cities by 2015, to generally stationary this year as it fought various legal challenges, and now forced into reverse — with the company pulling out of three German cities late last week. It pointed the finger of blame at a highly regulated taxi industry for retrenching in Germany. (Although local taxi industry associations point out that complying with those regulations is not a problem for the ~255,000 registered taxis in the country.)
So where is Uber expanding its business? It’s apparently gearing up to launch in Pakistan by the end of this year. And has rapidly built out its operational footprint in India — with the market becoming its second largest in terms of cities served after the U.S. this summer.
That’s not to say it faces a clear road to accelerate in Asia’s emerging markets either. It has recently collided with local authorities in Indonesia over how it operates aspects of its business, with Jakarta’s governor going on TV to say the company needs to register as an onshore entity to pay tax. And China is proposing strict new rules on how ride-sharing apps can operate which suggests serious roadblocks lie ahead for Uber (and others) seeking to tap that massive market.
But the Chinese market has always been more highly regulated than others in the region — so it’s by no means likely that other Asian countries will follow the Chinese lead on tightening regulation to control Uber’s growth.
And Uber complying with the tax requirements of specific emerging markets — and tweaking its playbook to local market conditions, such as by making cash payment available — may prove less of an obstacle to its modus operandi than meeting fine-grained consumer-safety centric regulations in mature Western markets that threaten to unpick its entire platform-based approach.