Uber warned Taiwan today that it was scaring away foreign investors as the ride-hailing app faces a potentially massive hike in fines for operating illegally on the island.
The US company has been racking up fines since it entered the Taiwan market in 2013 for running a business without the proper registration to operate as a taxi service.
In the past Uber drivers have faced fines of around Taiwanese Dollar 50,000 (USD 1,570) but the cabinet this month proposed a maximum penalty of Taiwanese Dollar 25 million (USD 785,000) -- the highest in the world, according to the company's Taiwan general manager Likai Gu.
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Authorities have also asked Apple and Google to remove Uber's app from their platforms but the government has yet to impose an outright ban on the company.
The moves "send a clear message to would-be startups to steer clear of Taiwan, deterring both local entrepreneurs and foreign investment," Mike Brown, Uber's Asia Pacific general manager, wrote in an open letter to President Tsai Ing-wen, published today.
Brown said that existing regulations were a "poor fit for new technologies and business models".
Since taking office in May, Tsai has outlined plans to kickstart Taiwan's economy, including making the island into an "Asian Silicon Valley" by encouraging and fostering start-up technologies.
"We felt like we were making progress," Uber's Gu told AFP in a phone interview, referring to the company's meetings with officials before the shock proposal to raise fines.
He declined to comment on local media reports that the National Taxation Bureau of Taipei has ordered the company to pay Taiwanese Dollar 135 million (USD 4.2 million) in back taxes and penalties.
Despite the hurdles, the San Francisco-based firm launched its food delivery service UberEats in Taiwan on Tuesday.
The US startup has expanded to more than 50 countries and is worth some USD 50 billion, but has faced multiple legal challenges and protests from traditional taxi drivers who feel they are being forced out of the market.
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