The world famous ride sharing company 'Uber' is preparing to enter the Nepali market

It is estimated that this American multinational company based in San Francisco will increase the competition in the ride-hailing market with the possible entry into Nepal. Uber has been providing various services like courier services, food delivery, material transportation and ride-hailing around the world. As one of the world's largest ride-sharing platforms, Uber has over 202 million monthly active users and 10 million active drivers and couriers. The company currently operates in 15,000 cities in about 70 countries.

At least four sources have confirmed the arrival of Uber in Nepal. According to the information received, the company plans to establish itself in the Nepali market within a month. A few weeks ago, Uber officials met with representatives of some ride-hailing platforms operating in Nepal and some local businessmen. In this meeting they said that the service can be started soon. A ride-hailing platform official said on condition of anonymity that 'Uber' has been trying to enter Nepal since 2016. However, due to frequent government changes and limited understanding of ride-hailing services, this was not possible in the past.

According to the prevailing laws of Nepal, foreign investment can be up to 70 percent of the total shares in ride-hailing services. Uber is looking for a Nepali partner as a minimum of 30 percent local investment is mandatory for the establishment of the company. According to the Industries Department, till Friday, Uber has not registered any application in this regard. Prashant Bohra, director of the Department of Industry, Foreign Investment and Technology Transfer Branch, said that they have also heard that Uber is coming to Nepal. In recent years, regulations have been relaxed to attract foreign investment in Nepal. Earlier, the minimum investment limit of Rs 5 crore has been reduced to Rs 2 crore. There is a provision to obtain business permission without minimum investment limit, especially for information technology (IT) projects.

However, although Uber's entry into Nepal is welcome, experts say that the ride-hailing market here is not relatively wide. An official of a ride-hailing company said that only three to four ride-hailing platforms can do sustainable business in a market like Kathmandu Valley. While this competition is good for consumers, business sustainability will remain a major challenge. There are currently around 30 ride-hailing services operating in Nepal, including cargo service providers. Due to the lack of reliable public transportation, the popularity of ride-sharing platforms is increasing in Nepal. The increase in the number of platforms in this sector has led to intense competition in terms of service, quality and pricing.

According to a government official, Uber has been studying the market for three to four months to enter the Nepali market. The government is preparing to implement interim standards for vehicle services in the context of the delay in the formulation of laws to regulate vehicle services. The Transport Management Department has prepared a draft of 'Digital Mobility Service Operation Standards 2082' and sent it to the Ministry of Physical Infrastructure and Transport for further discussion. Officials said that if these standards are approved, they can be implemented within the next two weeks.

After the Supreme Court ordered to regulate the ride-sharing business, the department started drafting the norms. According to Ganeshman Rai, information officer of the department, once the draft is approved by the ministry, it will be implemented through public notification. Despite the rapid growth in ride-hailing services, the government has been repeatedly delaying the creation of laws to regulate this sector. On 29 February 2076, the Patan High Court had ordered the government to bring ride-hailing services under the purview of regulation. After almost 6 years, some progress has been made. In January last year, the Supreme Court had pointed out the need for legislation to ensure regulation of the expanding ride-hailing companies.

Rai said the current transport laws cannot address this sector and the proposed standards aim to regulate and streamline these services. The proposed framework expands the traditional ride-sharing definition to include concepts such as ride-hiring and ride-pooling. It includes provisions like social security for the safety of passengers and drivers, mandatory CCTV system in four-wheelers and GPS tracking.

Ride-hailing services have grown rapidly in Nepal, especially in Kathmandu. According to various estimates, more than 2 lakh riders are active in the region. However, delays in policy implementation are also creating various obstacles. In the government policy and program of 2078-79, a commitment was made to introduce a ride-sharing law, but the Office of the Auditor General has mentioned in the report that this commitment has not been fulfilled. Currently, local services like 'ZumZum', 'Sajilo' and 'La Basam' are active in Nepal along with international platforms like 'Pathao', 'InDrive', 'Yango'. In 2073, a ride-hailing service was started for the first time in Nepal with the launch of the indigenous app 'Total'. The market expanded with the entry of 'Pathao' in 2074 and 'Indrive' entered the market in 2078. However, companies in this sector are facing various legal issues.