Uber: Technological Advance Faces Entrenched Incumbents

For those unfamiliar with the service, Uber is an app one can get on his/her smartphone that allows an individual to request a vehicle to their location for a ride.  A bit more in depth, Uber has several different vehicle options of which most are luxury vehicles ranging from Lincoln town cars to escalades.  Uber has even begun offering helicopter and jet services in certain locations and sometimes-pending time of the year.  The nice thing about Uber is that it pulls up a GPS screen with the location of its cars all around a person and the estimated time it will take said car to come pick up a person.  Furthermore, users of Uber have the app synced with their credit card, which means that physical cash payment is not needed and the tip is included in the charge to the user’s card.  The service Uber provides is offered in large cities across the globe, and as a user myself I find the company to be excellent particularly with respect to customer service.

 

The issue that has drawn large-scale antipathy towards Uber deals with its penetration into the taxicab market.  The particular matter within this issue stems from the fact that Uber does not register itself as a driver service, which thereby lets its slip by the domestic and foreign laws requiring taxicabs to be licensed and register by government.  Uber is able to pull this off (as explained in the article) by claiming that it is actually a middleman that connects those in need of a ride with those capable of doing so.  None of the cars driven under Uber are actually owned by Uber, and Uber does not use the same fare service system as normal cabs (the equipment is not connected to the vehicle itself not too mention the “employees of Uber” are in fact “self-employed”).  The increasing usage of this non-taxi service has lead many metropolitan taxi companies to raise up in arms, looking towards local government to intervene on their behalf.  London cabbies are in fact planning on going on strike against Uber as they see it as an unfair threat to their income and livelihood.  I see the movement towards Uber as the simple adoption of better and more efficient technology, but then again I am not having my livelihood threatened.

 

http://www.theguardian.com/world/shortcuts/2014/may/11/taxi-drivers-uber-london-black-cab-gridlock

3 comments to Uber: Technological Advance Faces Entrenched Incumbents

  • Jier Qiu

    I used uber once in NYC and unfortunately it did not work out very well. In busy hours/On holidays, uber charges a higher rate due to the high volume of cab requests. However, when I used the app to call in a cab, it does not show up in a significant place. Instead, I had to click a button to check the fare. I do think the surge pricing policy of uber is extremely profitable (as a middleman) and no wonder the taxi service is being threatened by it.

  • Louisa Ortiz

    Travis Kalanick, Uber’s CEO was recently named one of Time’s 100 Most Influential people. In this interview with Financial Times Kalanick addresses the taxi drivers’ discontent and regulations that have prevented Uber from setting up shop in some cities. Kalanick is pretty adamant that these regulations only benefit the drivers and not the customers. In addition the article brings up a potential rival, Lyft, suggesting that this market is rapidly growing.

    http://www.ft.com/intl/cms/s/2/9b83cbe8-d5da-11e3-83b2-00144feabdc0.html#axzz31YFpmZQp

  • Zachary Durkin

    I can’t see this app really expanding too far past its size right now. Public transportation is getting a lot of funding in large cities as climate change becomes more of a concern. With more funding, we’ll get better public transportation. Also, as I’ve seen, public transportation is much cheaper than Uber. It’s a good idea, but one I see only succeeding in a small market.

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