MANILA (Reuters) – The Philippines’ transport regulator on Tuesday denied an appeal by Uber Technologies against its order suspending the ride-hailing firm’s services for a month in the Southeast Asian nation.
The Land Transportation Franchising and Regulatory Board late on Monday halted the service over what it said was Uber’s violation of a directive to cease accepting new driver applications.
Uber appealed the order on Tuesday, and restarted its operations after briefly suspending it. But the company later said in a Facebook posting that it will comply with the regulator’s suspension order after its appeal was denied.
The Philippines suspension is the latest setback this year to Uber, one of the most valuable startups in the world with a valuation upwards of $60 billion, which is struggling to recover from a series of scandals and is hiring a new leader.
Uber is already facing regulatory scrutiny in several Asian markets, including in South Korea and Japan. The firm said last month it is suspending its services in the Chinese-ruled territory of Macau from July 22.
Any Uber-registered cars that defies the suspension order will be fined and impounded, lawyer Aileen Lizada, a member of the transportation board, told Reuters in a text message.
“All these cases involving Uber and for that matter anyone involved in public transportation system has to understand that we need to be in some level of regulation,” board chairman Martin Delgra told reporters at a briefing on Tuesday.
Uber is hugely popular in the Philippines and is regarded by its users as more reliable and competitive than the country’s outdated public transport services.
The suspension led to an outpouring of anger by Filipinos on social media. Uber issued an email to users informing them of the suspension, entitled “we’ll be serving you again soon”.
The Philippines was the first Southeast Asian nation to regulate app-based car-hailing operations after drawing up rules in 2015.
Last year the regulator suspended the acceptance and processing of applications for all ride-sharing services, including Uber, to study further how to regulate the industry.
Uber said it continued to accept new applications for drivers amid strong demand for the service, but did not process them.
A five-page suspension order of the regulator made available on Tuesday said it was due to the “irresponsible” behavior of Uber in “unduly challenging the limit of fair regulation” by continuing to accept driver applications.
The regulator stood by its argument in denying Uber’s appeal in a separate order.
At a congressional hearing this month, Uber told lawmakers there were nearly 67,000 drivers registered with the company in the Philippines.
Grace Poe, a senator and prominent advocate for improving the Philippines’ notoriously shoddy transport services, said the regulator’s order was “cruel and absurd”.
In a statement, she said stopping Uber “further exacerbates the problem of having an utter lack of safe, reliable and convenient transportation options for our people.”
But President Rodrigo Duterte’s spokesman Ernesto Abella said a balance must be struck “between innovation and laws and regulations that the (regulator) has to implement as part of its administrative function”.
(By Manolo Serapio Jr; Additional reporting by Martin Petty; Editing by Muralikumar Anantharaman and Susan Thomas)