What happened: The Kabu Ride app has been offline since September, when its parent company applied for a licence to operate as a ride-hailing service in B.C.
Why it matters: The CEO says the long wait to get a licence from the province has been a strain on the company and its former riders
Ride hailing still awaits local streets and one made-in-B.C. service previously operating in the grey market says the waiting period to get licensed is putting riders and its business at risk.
Gokabu Group Holdings Inc. disabled its ride-hailing app, Kabu Ride, on September 16 to comply with long-awaited provincial regulations that went into effect last month, according to CEO Austin Zhang.
The Richmond-based company is now in the midst of applying for a licence.
It’s a process the provincial agency that reviews the applications, the Passenger Transportation Board (PTB), estimated would take six to eight weeks.
“We usually have 3,000 rides a day, so that will impact our income,” Zhang told Business in Vancouver, adding the lack of revenue puts the jobs of Gokabu’s in-house employees at risk.
“Around 2,000 drivers just lost a job. They can’t earn any money through the app.”
Of those 3,000 daily rides, Zhang said most are international students who need services in their own native languages.
Those riders are now shifting over to what Zhang describes as “offshore” operators that “don’t respect the local regulations” and hire drivers that would not qualify to drive for Kabu Ride.
The CEO said he wasn’t concerned about losing business to potential competitors, as he believes riders will eventually return to Kabu Ride once the company receives a licence.
But in the meantime, Zhang said, the company is losing money, and its former clients may be depending on unsafe rides.
In January 2019 the B.C. Ministry of Transportation named Gokabu, along with ride-hailing services Longmao, Udi Kuaiche, U Drop, RaccoonGo, Dingdang Carpool and AO Rideshare, in a statement aimed at highlighting passenger and driver safety concerns.
“These companies have been recruiting drivers to operate their personal vehicles as commercial passenger-directed vehicles on the Lower Mainland … It is the driver, not the app companies, that are operating illegally and are subject to penalties and fines of $1,150,” the ministry said.
“Passengers must know that when they hail a ride in a vehicle through these apps, they are choosing to take a trip in a vehicle that has not been licensed to operate legally in British Columbia.”
Zhang acknowledged his company had been operating for years in the grey market prior to the province introducing regulations last month.
He said election promises from the major parties during the spring 2016 provincial campaign led him to believe ride-hailing would be approved for B.C. roads much sooner.
“When [co-founder] Billy [Xiong] and I started this company, we never planned to break the law first … But our company growth didn’t wait. We started with a handful of employees and a $60,000 investment. And right now today we have 60 full-time staff and 20 part-time staff,” Zhang said, referring to Kabu’s origins as a social app.
“Our story isn’t unique. Both Uber [Technologies Inc. (Nasdaq:UBER)] and Airbnb [Inc.] had similar origin stories.”