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Uber to move regional headquarters to Hong Kong from Singapore

Amid city's tensions, ride-hailing company urges government to legalize services

Hong Kong taxi drivers have long lobbied against Uber's services in the city. The head of the Taxi Dealers and Owners Association says compensation should be made to drivers if the government legalizes the company's operations.   © Reuters

HONG KONG -- Uber Technologies, the U.S. ride-sharing company, said on Tuesday that it will move its Asia-Pacific headquarters to Hong Kong from Singapore despite regulatory and political uncertainties facing the city.

The decision comes after Uber earlier this month said that it will close 45 offices and lay off more than 3,000 workers globally amid economic weakness triggered by the coronavirus pandemic and renewed social unrest in Hong Kong over a Beijing-proposed national security law that critics believe will undermine the semi-autonomous city's freedoms.

"Like any other business, we are watching the situation closely. It's a bit early to speculate what may or may not happen," Estyn Chung, Uber's general manager for Hong Kong, said when asked at a news conference about whether the pending legislation will affect its decision to move.

During the annual session of China's top legislature, the National People's Congress, Beijing last week tabled a proposal that targets activities such as "splitting the country, subverting state power," as well as terrorism and foreign interference in Hong Kong. Beijing also announced plans to set up security agencies in the city.

Thousands of protesters took to the streets in an unauthorized protest on Sunday, and police fired tear gas and deployed water cannons to disperse the crowds.

Foreign businesses, including the American Chamber of Commerce in Hong Kong, warned that the legislation could have a chilling effect on business activities and increase risks for companies and professionals in Hong Kong.

Uber, however, is primarily concerned about the opaque regulatory framework of ride-sharing in Hong Kong, where taxi drivers have long lobbied against the shared-economy service.

Over the past six years since Uber entered Hong Kong, dozens of its drivers have been arrested and prosecuted for driving passengers without a car-hire permit. While about two million people have used Uber in Hong Kong since it began operations in the city, ride-sharing remains in a legal gray area with little progress made in regulatory policy.

Despite Tuesday's announcement on relocating to Hong Kong, it appears that Uber has not secured a green light from the government. Chung made it clear that the relocation will not happen if the government fails to legalize its ride-hailing services.

"It's simply not possible for Uber to make such significant investments without our core business being able to operate to its full potential in a regulated framework," he said.

"We are asking the government and community leaders to sit down with us -- to hear our vision and investment plan for Hong Kong," Chung said, adding that the company can create jobs and help Hong Kong's economy recover from the pandemic and nearly a year of protests.

Richard Willder, head of public policy and government affairs at Uber, said: "We had very encouraging private discussions [with the government] over the past couple of months."

Ng Kwan-shing, president of the Taxi Dealers and Owners Association in Hong Kong, said compensation should be made to taxi drivers if the government legalizes Uber's operations.

"No matter where Uber moves its headquarters, it needs to comply with the local laws to be fair to others," Ng said. "It wouldn't make sense if our drivers can't make a living by playing by the rules," he said, adding that the association will follow up with the government regarding ride-sharing regulations.

Among the Asia-Pacific markets where Uber has operations, Hong Kong is one of the fastest recovering from the pandemic.

Chung said that its business has rebounded more than 70% from precrisis levels. "We are very optimistic about Hong Kong, but yet again, we need the government to show they want ride-sharing here."

Elsewhere in the region, Uber continues to cut costs to weather the impact of the global pandemic.

In India, Uber on Tuesday said it is laying off 600 full-time employees due to "the impact of COVID-19 and the unpredictable nature of the recovery."

"Today is an incredibly sad day for colleagues leaving the Uber family and all of us at the company," Pradeep Parameswaran, president of Uber India and South Asia, said in a statement. "We made the decision now so we can look to the future with confidence," he said.

A Transport and Housing Bureau spokesperson said Uber’s intention to establish regional headquarters in Hong Kong had been noted, but insisted that a valid hire car permit is required to drive passengers.

“For passenger transport services, any person or organisation intending to arrange for a private car for the carriage of passengers for hire or reward must hold a valid hire car permit (“HCP”) in respect of the vehicle concerned according to the Road Traffic Ordinance,” the spokesperson said.

The current regulatory regime was there to “protect the interest and safety of passengers, and to ensure the effective use of roads as well as the efficient, reliable and long-term healthy development of the public transport system."

Additional reporting by Kiran Sharma in New Delhi.

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