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August 11, 2015

Uber offices raided after Hong Kong police sting

Five drivers arrested in licensing and insurance dispute.

By Jimmy Nicholls

Uber’s offices in Hong Kong were raided by police in connection with a sting that led to the arrest of five drivers, in the latest regulatory woe for the taxi app firm.

Undercover police are alleged to have found drivers without the right permits or insurance accepting fares, according to local media reports, with two luxury saloons and three people carriers seized as part of the sting.

Responding to the raid in a statement, Uber Hong Kong said: "Uber ensures that all rides are covered by insurance and all drivers on the platform undergo an extensive background check.

"We stand by our driver-partners 100% and welcome the opportunity to work closely with the authorities towards updated regulations that put the safety and interests of riders and drivers first."

The raid follows a similar operation in April by police in Guangzhou, a city on the southern coast of China, and comes as Uber faces stiff competition from Didi Kuaidi, a Chinese rival that raised $2bn (£1.3bn) in July.

Unlike other markets, where Uber has often beaten competitors on cost, Hong Kong’s cheap local taxis have forced the ride-hailing app to position itself as a premium product, with fares being up to twice as expensive as local taxi charges.

Outside of Asia the company has courted widespread legal pressure, with many jurisdictions questioning the safety of the service, which often is more lightly regulated than local taxis, whose drivers resent what they claim is unfair competition.

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In California Uber has also courted controversy over a court case which could see it forced to treat its drivers as full employers rather than contractors, which would ramp up costs for the firm.

Last week leaked documents also revealed the company was losing millions of dollars a quarter, with the firm responding that it was investing so that it could later turn a profit.

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