Disruptive technologies have revolutionised the music and transport industries.
With the advent of Uber, many thought the days of haggling with demanding taxi drivers were over.
Uber, the somewhat revolutionary smartphone application connecting passengers with drivers of vehicles-for-hire with structured pricing, upset the global taxi service status quo so much that it was featured in an episode of the animation series South Park.
When Uber’s premium service UberBlack was launched in January in Kuala Lumpur, people loved the idea of an on-call luxury car service. You could ride in a Toyota Camry, Honda Accord or a Nissan Teana, provided you had a credit card, a smartphone and the Uber app.
UberBlack was the rich man’s form of public transportation with a base fare of RM3, and distance (RM1.15 per km) and time (35sen per minute) charges.
However, it was the lower-cost UberX that proved to be really popular and disruptive when it was launched in Kuala Lumpur in August — people could travel in style in a Nissan Almera, Toyota Vios, Honda City or Perodua MyVi, all at an affordable price.
The San Francisco-based company touted fares that were 15% cheaper than standard taxis, with a base UberX fare of RM1.50. After that, the time and distance charges are 55sen per km plus 20sen per minute.
A similar Uber service, simply called Uber, was also officially launched in Johor Baru in October with the same base fare, followed by 60sen per km and 20sen per minute after that.
By comparison, the base fare for a budget taxi in Johor Baru or Kuala Lumpur is RM3. The taxis have a distance charge of 87sen per km and a time charge of 10sen every 21 seconds. But then, of course, there are rogue taxis who refuse to use meters.
With the prospect of an upcoming recommended price hike between 30% and 40% for taxi and bus fares, it’s small wonder that consumers have flocked to Uber’s lower fares. Uber’s regional manager Mike Brown explained to The Star that Uber could charge lower prices because drivers spend less time idle and more time actually driving people around.
However, Uber’s growing popularity has not gone unchallenged — disgruntled taxi drivers, complaining that Uber’s lower fares have affected their livelihood, claimed its vehicles were not registered with SPAD (the Land Public Transport Commission), the Malaysian body that regulates public transportation.
They also argued that Uber’s cars (unlike metered taxis) did not have passenger liability insurance. However, Brown counters this argument by saying every Uber ride is covered by insurance.
In September, SPAD decided to crackdown on Uber because it claimed the drivers didn’t possess the required Public Service Vehicle licences to carry passengers.
However, Uber’s problems are not specific to Malaysia. Uber has suspended operations in Nevada, been banned in Berlin and Hamburg, Germany and more recently Denmark, and ran into legal trouble in cities like Oslo, San Francisco, New York, Frankfurt, and Paris, which ordered the company to pay €100,000 (RM430,000) in damages for presenting a paid transport service as carpooling. In London, the drivers of the iconic black cabs are vehemently protesting Uber’s “encroachment” into their territory.
In some cases, the backlash has been so severe there have even been incidents of Uber vehicle vandalism in Paris, France and threats of violence against Uber by taxi drivers in Barcelona, Spain.
Closer to home in Asia, Uber has driven into regulatory difficulties in cities like Jakarta and Seoul, where officials believe it should follow South Korean laws regulating taxi or rental car companies, while Singapore has said it will regulate the service more closely beginning 2015.
Currently Uber is still operating in Malaysia and claims it’s working with SPAD to resolve the issues.
Brown said, “We are in touch with SPAD and look forward to working closely with them and JPJ to encourage innovation, provide consumers with more choice, and to provide drivers with more economic opportunity while creating a safer public transportation environment for everyone.”
Owning music — whether it’s a CD or even a digital file — is considered old school in this day and age.
It’s the age of streaming, where services like Spotify and Deezer reign supreme, offering music fans millions of tracks (Spotify has 20 million while Deezer has 35 million) to listen to at a modest monthly subscription fee or even for free.
With these services around, who would want to fork out anywhere from 69cents (RM2.25) to US$1.29 (RM4.25) per track on iTunes?
The Wall Street Journal recently reported that music sales at the iTunes Store have dropped 14% since Jan 1. The Journal blamed free videos and US$10-per-month (RM34) unlimited subscription plans (streaming services) for iTunes’ slipping sales.
The Recording Industry Association of Malaysia chief executive officer Ramani Ramalingam said the music streaming culture is not here in full force yet but it is definitely gaining momentum.
“Malaysia is still pretty much a Ring Back Tone market. But music streaming is definitely making inroads. Streaming is a global trend which will eventually catch on in Malaysia,” he said.
Streaming services are gaining some traction here, although the main streaming services Spotify and Deezer have declined to reveal country specific figures. Spotify has 50 million users worldwide (12.5 million of which are paid), while Deezer has 16 million (five million of which are paid).
Sources say Spotify has 100,000 Malaysian subscribers (of which 15% are paid ones) since its launch in April 2013.
Music fans have a choice of paying RM14.90 per month for its standalone premium service while Maxis subscribers (whether postpaid or prepaid) can pay RM10 per month for Spotify’s premium service (launched in Oct 2013), where you can play songs on any mobile device. Premium service means there are no advertisements while streaming music.
Sources also say Deezer has 50,000 Malaysian subscribers (of which 20% are paid ones) since its launch in December 2012. If you want to subscribe to Deezer’s standalone Premium service, it costs RM8.90 a month.
Deezer has tied up with DiGi Telecommunications Sdn Bhd since April 2013, where selected DiGi Smart Plan and Postpaid Tablet Plan subscribers will be able to get the Premium+ service (where users can access up to three mobile devices) for free throughout their contract period while other subscribers need to pay only RM8 per month.
Jim Butcher, Spotify communications director of Asia Pacific said, “LPs lasted 50 years, CDs 20 years and MP3s 10 years. Streaming will bring back the golden era of music business profits,” he claimed.
He cited dance artiste/producer Calvin Harris. According to The Independent, Harris’ hits — including We Found Love with Rihanna — have been played one billion times on Spotify, with a per-stream royalty rate of 0.7cents (2sen). The cents add up as Harris has generated a whopping US$7mil (RM24mil) just on Spotify. However, what he actually earns depends on the agreement with his record label, Columbia.
Also, streaming services are ideal in the age of social media. Spotify and Deezer are Facebook friendly, making it easier to tell your 789 friends how cool you are by what you are listening to, although this may backfire spectacularly if you’re a closet Justin Bieber fan.