Uber enters Myanmar with a licensed taxi service

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Uber has launched its service in Myanmar, the Southeast Asian country formerly known as Burma, over a month after going public with its expansion plan.

With a population of 50 million people and rapidly increasing internet adoption, Myanmar is seen by many tech firms as a market with much growth potential. Grab, Uber’s chief rival in Southeast Asia, entered the country’s capital Yangon in March with a beta launch, but Uber’s arrival in the city is notable because it comes with the backing of the national government. Principally, that’s because the service will only work with licensed drivers, Reuters reports, using the same model as Grab.

There’s plenty of logic behind that change of approach. Even after operating in Asia for four years, Uber’s service sits in a grey area that sometimes sees governments clamp down on ‘unlicensed’ drivers. In Myanmar, authorities are taking its arrival as an opportunity to advance its digitization since it doesn’t offer an immediate threat to existing taxis.

“I personally welcome Uber,” Phyo Min Thein, chief minister of the Yangon Region, said in a statement. “I believe Uber will help Myanmar becoming an ideal market in Southeast Asia by providing safety and improved services to our people and international tourists.”

U.S. ambassador Scot Marciel added that Uber can “improve urban mobility” and strengthen relations between the two countries.

The Myanmar launches marks the 57th country where the U.S. ride-sharing service is operational, but this market may just be its most intriguing. The internet was barely accessible in Myanmar before the country’s democratization in 2011, while cell phones and SIM cards were priced beyond almost all residents. Yet today, Myanmar has over 50 million registered SIM cards and an estimated 10-15 million Facebook users.

“The country has leapfrogged straight to the world of smartphones and data,” David Madden, who runs Phandeeyar, an innovation lab in Yangon that’s backed by Omidyar Network, told TechCrunch recently. “It’s only a matter of time before other international tech companies recognize the opportunity.”

It’s unclear when, or indeed whether, Uber will up the ante by introducing services like UberX, which enable anyone with a car to become a driver. Any such move would test its relationship with the government, which looks to be the pillar for this expansion.