The Stack Archive

Uber overwrought at obstacles to operating in India

Mon 1 Dec 2014

With an almost pathological determination to remain in controversial headlines, crowd-sourcing taxi-service giant Uber’s latest rift is with India, whose insistence on two-factor authentication for payment from casual passengers to casual drivers, has irked the company.

Though the Reserve Bank of India (RBI) is technically the aggressor in this negotiation to let the company operate in India under stricter rules than Uber must submit to elsewhere, the pressure behind the scenes has come from the Meru central cab-booking organisation, which covers the Indian cities of Mumbai, Delhi, Hyderabad, Bengaluru, Jaipur, Ahmedabad, Chennai, Vadodara, Surat, Pune, Kolkata, Chandigarh and Visakhapatnam.

Meru’s joint representation to the RBI led to the Uber receiving a deadline of close of October this year to initiate a system of two-factor authentication – the same kind of safeguard used by many online banking systems and by Google and other secure digital companies in order to recover lost passwords or re-secure the identity of a someone requesting a service that does not follow their usual purchasing pattern.

Not unreasonably, considering the extent of implementing such technology securely, Uber sought and obtained an extension until 30th November, furiously implementing the Paytm digital wallet system, which was launched by mobile tech company One97 Communications in February of this year, after being licensed by the RBI in 2013. The system has the same kind of Escrow-factor as an Oyster card, since money put into it cannot be returned into cash, but only into payments via approved and participating vendors and providers.

From Uber’s point of view, the ease-of-use factor drops dramatically when customers cannot simply install an app and use their existing, familiar payment methods, but it has had to capitulate, albeit with bad grace – the company’s blog on the matter is rather acid, even going so far as to suggest that the additional Indian restriction is bad for the local job market:

“Today, Uber has complied with the RBI August 22, 2014 circular requiring every credit card transaction made with an Indian credit card to include two-factor authentication. While we believe this requirement is unnecessary and burdensome, we have engaged in constructive discussions with the RBI and are committed to working with the Indian government to advance regulations that support innovation and job creation.”

To generate goodwill and familiarity with the service, Uber has given Indian passengers a week of free rides leading up to the 30th November deadline, and asked for an additional 45 days to fully implement the two-factor system, arguing that it needs to protect its drovers from loss of income and to campaign for increased adoption of the PAYT wallet.

Perhaps London’s Black Cab drivers regret not having taken this more subtle approach regarding Uber’s threat to their long-standing livelihood.

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Asia business India sharing Uber
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