Newspaper article China Post

Startups Need the Law to Keep Pace with Innovation

Newspaper article China Post

Startups Need the Law to Keep Pace with Innovation

Article excerpt

Uber Asia Pacific General Manager Mike Brown published an open letter to President Tsai Ing-wen last week, calling out her administration for its latest crackdown on the market-disrupting ride-booking giant. Brown said the government's actions threatened the interests of over a million Taiwanese citizens and sent "a clear message to would-be startups to steer clear of Taiwan, deterring both local entrepreneurs and foreign investment."

The letter comes after the Directorate General of Highways called for the removal of Uber's app from mobile app stores, and while the Legislature began considering amendments to raise fines on Uber drivers from NT$150,000 to NT$25,000,000, the highest anywhere in the world.

Taiwan's law has yet to catch up with technology, and there is a regulatory void with respect to transport booking apps. For some time, Uber did business totally unfettered, until the government finally took notice and began a belated crackdown that could spell the company's doomsday in Taiwan.

Legal hurdles can be discouraging and even fatal to small and mid-sized enterprises. Each year, the World Bank releases the results of its Doing Business survey, which assesses the ease of conducting business in various countries. In the latest report, Taiwan dropped from 10th to 11th place among the 190 countries covered.

National rankings are based on performance in 10 categories, which include "starting a business" and "dealing with construction permits." Taiwan has made striking progress over the years - climbing from number 33 in 2011 - but has found it difficult to reach the very top rungs.

According to the report, the area in which Taiwan needs the most improvement in is "getting credit": Taiwan performed poorly when judged based on the legal rights granted to lenders and borrowers under collateral and bankruptcy laws.

Many of Taiwan's business laws were developed during the industrial era and were designed to cater to the needs of the then-booming manufacturing industry. It is time to revise outdated laws and to make them more flexible to change in order to unlock economic opportunities and reinvigorate the economy. …

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