Government prepares to legalize ride-hailing companies

The government is preparing to legalize and regulate ride-hailing companies by March 2020, which should help transportation system in the Kingdom and spur digital innovation as some ‘super apps’ in the region were built on ride-sharing applications.

“We have to look at what is possible within the law to give choice to the public,” said Jirut Wisarnjit, Deputy Permanent Secretary at the Ministry of Transport.

Ride-sharing services powered by mobile apps have become extremely popular in Thailand due to convenience, although some of them are not registered to acquire the right “taxi” license plate.

Even though the services are generally more expensive than taxis, passengers favor them because they could be picked up from heavy-traffic areas, their rides could be tracked, and the driver’s identity is systematically recorded.

The Ministry of Transport said that once the services are legalized, it would require private service vehicles to be registered and equipped with a GPS. Also, ride-hailing firms must verify the identities of drivers and operate a 24-hour complaint center.

While the news may please passengers, it also has ramifications for Thailand’s digital economy and startup ecosystem. Singapore-based Grab and Indonesia-based Gojek began as ride-hailing apps.

Their initial success inspired them to expand into other services such as food delivery and even virtual finance. They have become what are known as “super apps,” and have been able to draw billions of dollars in investments, making them what is known as ‘unicorns.’

Thailand has a vibrant startup scene but has yet to produce a unicorn. Easing regulations and restrictions could foster more innovation that could accelerate the Kingdom’s innovation and digital development.

Photo Courtesy of https://www.bloomberg.com/news/articles/2018-12-08/ride-sharing-titan-grab-sees-potential-boost-after-thai-election