Just last month Uber, the mobile app that connects drivers to passengers in cities across the world, launched its more affordable option, UberX, in Kuala Lumpur, promising rates that are 15 per cent lower than a budget taxi.
This is just one example of the growth in Asia of ‘sharing economy’ businesses, which enable consumers to rent or share items and services for a profit or, in the case of Uber, benefit from a more cost-effective version of an existing service. Other such businesses making inroads into Asia include accommodation provider Airbnb and Grab Taxi, which operates a similar business model to Uber.
But if the experience of these models in other continents is anything to go by — Uber, for one, has sparked riots in Europe with disgruntled cab drivers claiming their livelihood is under threat — those operating in Asia-Pacific are likely to run foul of local laws and court controversy at every turn.
This begs the question of whether PR agencies in Asia are starting to develop practices to enable these ‘shared economy’ companies to navigate the regulatory landscape, or whether these brands are developing the capability in-house. It’s an issue that, for the present time, appears to be dividing the industry from both sides. Uber communications manager Evelyn Tay says that the company does not currently use PR agencies in Asia except on an ad hoc basis and for "special projects". Agency APCO Worldwide says that lobbying for these types of ‘shared economy’ models in Asia is a growing segment of the agency’s business, with Stephen Liew, executive director for Asia-Pacific, saying the agency fully intends to position itself to capture more of this market.
Several other PR firms approached about lobbying said they had existing or potential relationships with clients in the ‘sharing economy’ area but they were not prepared to elaborate further on this at the present time. It would seem, therefore, that efforts directed at lobbying on behalf of these firms appear to be, at best, at the very early stages.
One reason for this is that the model of the ‘shared economy’ in Asia is still at an early stage, depending on which local market you look at. In Malaysia for example, the idea of the ‘shared economy’ has existed for some time, but in Indonesia, the notion is still very new with Uber, for example, having just recently launched in Jakarta. It’s no surprise then that local governments, for the most part, have not yet implemented corresponding regulatory policies and that markets as a whole haven’t yet fully responded to the potential disruption to existing models.
"A lack of lobbying in Asia is mainly down to the fact that the concept around these companies is relatively new so consumer demand for change is still low as take-up and understanding of the technology is only just at the beginning stage," says Stephen Lock, chief executive of Edelman Indonesia and head of public affairs, Southeast Asia. "Despite this, however, the industry has a better rate of success by trying to start the conversation and initiating discussion around a best-practice model for regulation rather than ignoring the issue."
Lock adds that hoping regulation will never come is never a smart business strategy — it is better to demonstrate the reputable and sustainable benefits of the business model and it also avoids inevitable brand contamination issues if things go wrong.
Another challenge facing PR agencies working with ‘shared economy’ brands is coming to grips not only with these new business models but the technology they employ. The majority of these ‘shared economy’ companies operate in the internet space but many of the more established agency directors are not digital natives.
"In order to clinch one of these accounts, it is important for an agency to have people who embrace these new technologies and who are fervent fans of these new companies," says Liew. "We have not seen too many competitors which are doing that and even if competitors can get to grips with the new business model and technology, a more difficult mindset change is to move as fast as these disruptive companies do".
The key to any start-up’s success is to "scale-up" as quickly as possible. This means moving at lightning speed and going live with initiatives that may not have been fully tested.
Add to this is the fact that in different Asian markets, governments have varying attitudes towards lobbying. In mature democracies, such as Australia and New Zealand, says Liew, lobbying is accepted and even welcomed as the governments there look to the industry’s inputs to better shape laws.
Napoleon Biggs, partner and commercial director at strategic planning business Bolei Digital was previously senior vice-president, head of digital integration, Asia Pacific at Fleishman-Hillard. He notes that Uber is registered as a ‘travel agency’ in Japan, which he says must have required some kind of "behind the scenes" lobbying.
"My personal opinion is that they won’t lobby until they need to and, so far, in Southeast Asia and Greater China that need hasn’t come up," he says. "In China’s case, I’d expect some form of kick back or restriction to come when the local clones start to make some noise, especially if they have backing from Tencent, Baidu or Alibaba."
When it comes to lobbying efforts, APCO Worldwide’s Liew believes that the smarter companies will build their own dedicated in-house capabilities supported by a network of local experts. In places where governments are not elected, there may be less willingness to listen to voices that are not from within the "ruling elites".
"Every market [in Asia] is different and no company can afford to place an in-house resource in every single market in which they operate or plan to enter," he says. "A combination of in-house and external lobbying capabilities is required. The key is to find the right balance in the in-house and external capabilities."
One starting point for this new breed of ‘shared economy’ businesses is to engage with the public and key stakeholders about the services they provide and why this can bring positive benefits for consumers.
"Creating a compelling narrative with a compelling message is needed to build awareness," says Edelman’s Lock. "Only then can any PR campaign that aims to change regulations be truly effective — people need to know why they should care first."
With local governments yet to implement corresponding regulatory policies, it would make sense for brands to take a more preventive approach towards educating the public and key influencers on the benefits of the model.
"If the ‘shared economy’ is here to stay, we should be seeing how to better work with the governments and industry leaders so that it not only benefits the individual business owners, but also protects the rights of the consumers and fellow workers in the long run as well," says Natalie Hoffman, managing director, Asia Pacific at The Hoffman Agency.
In this phase, she adds, any PR approach should focus more on education: showing the public, key stakeholders and government leaders that the shared economy builds trust and more effectively allocates resources in our economy.
With the continued proliferation of start-ups looking to take advantage of the growth of the ‘shared economy’ model, public awareness and campaigns for regulatory change will almost certainly grow in the future, particularly as technology and demand develops and grows. While it seems that some PR agencies are making bigger efforts to support this area than others, it might only be a matter of time before their role in helping to lobby for regulatory reform grows alongside that of consumer concerns and demand.
AGENCY COMMENT: Bob Pickard, APAC chairman, Huntsworth
In most Asian-markets there is no such thing as lobbying as it is understood in Western countries. Or, it might mean different things in different markets that are often not favourable. Lobbying can come across as "influence peddling" or imply inappropriate methods of government manipulation.
The standard-setting PR agencies in most Asian countries are often the ones that have established a public affairs and government relations capability, which includes monitoring and intelligence-gathering, policy analysis, community relations, issues management and stakeholder relationship management. This might be "lobbying by another name" in some cases, but in general this is broad spectrum public affairs and government relations work.
Asian markets range from one-party states to parliamentary monarchies to so-called "managed democracies". Most have an authoritarian bent amplified and enabled by traditional hierarchical approaches. But it is those countries with a freer press where we see much more government relations activity, such as India, Japan and South Korea.
In the future, I just don’t see PR agencies directly lobbying governments in Asia. But I do think they will be more active in helping clients understand and navigate governments’ decision-making processes.
CLIENT COMMENT: Cheryl Goh, regional marketing head, GrabTaxi
GrabTaxi isn’t necessarily changing regulations wherever we go, as we try to work within regulations and not to cause unnecessary disruption if it can be avoided. Our main goal is to work with regulatory boards to ensure we comply with the existing system so that we can create real positive social change with the support of local stakeholders.
That being said, some of our work does create change and we like to think of that as being positive for the markets we’re in.
PR plays a role by letting the communities and authorities know that we are making a positive change that benefits everyone and in helping us relate to existing regulators more clearly, as there will always be people who are initially sceptical of the work we do.
We work closely with our communication partners across the region and have a strong relationship with regulatory boards in all our markets. We spend a lot of time building those relationships and with the support of our PR partners we are able to maintain that relationship by proving our worth to the communities.
While traditional lobbying is commonplace in certain markets, in Asia there are sensitivities and cultural norms that need to be respected. This is why GrabTaxi remains a local company in every market we’re in. This gives us an edge in understanding and adapting to every market.