Posted on 12/02/2015 4:44:12 PM PST by Kaslin
Editor's Note: This article was co-authored by Danni Ondraskova and Justin Haskins.
Many people are already familiar with Uber, the highly lauded and criticized San Francisco-based company that offers its customers a car-share service through an eponymous app. Uber touts its service as a legitimate alternative to city taxis and other transportation services. Its website promises consumers the chance to "share experiences, woo the moment, and create an escape."
Uber's opponents—usually controlled-obsessed regulatory zealots or competing taxi companies—question the safety of Uber's business model and point to alleged fluctuations in its service quality as signals of the service's inherent unreliability, but any fair-minded person who has taken the time to investigate ride-sharing companies such as Uber would acknowledge the service in generally very safe and much more cost-efficient.
Uber's meteoric ascent is no secret (or surprise). A mere five years after its inception, Uber is earning several billion dollars in annual revenue and serves 42 countries and 200 cities. The rise of car-sharing companies such as Uber and Lyft coincides with a decrease in the taxi industry’s revenue in cities where both types of transportation services are allowed to operate freely. These related trajectories beg the question of how such a fledgling company could begin to break down the long-held monopoly of the taxi industry on transportation services.
One plausible response is Uber simply capitalized on the deeply-rooted dissatisfaction of many taxi riders by offering them a cheaper, more reliable, and more comfortable means of transportation. Consequentially, customers have been returning in droves. Despite Uber's occasional hiccups, the service is best described by its affordable fare, typically friendly and punctual drivers, and comfortable experience.
In 2014, Business Insider compared taxi rates with Uber rates in major U.S. cities, and in the 21 cities examined, Uber beat taxi rates in 18 markets without taxi tips and in all 21 cities when even very small tips were included in the calculations. In Boston, a rider traveling 5 miles at an average speed of 30 mph would save more than $8 per trip using Uber instead of a taxi. In Los Angeles and San Diego, the savings are more than $10 per trip.
Critics of Uber and Lyft often question the safety of such loosely regulated businesses, but overall, all the data show Uber is at least as safe as most taxi companies. Crimes committed by Uber drivers on their customers, such as a San Francisco driver's assault on passenger James Alva in 2014, are tragic and well documented. However, these incidents do not constitute evidence of Uber being less safe than other services. One can easily find examples of crimes being committed by taxi drivers.
To reduce the inevitable risk of interacting with strangers, car-sharing users can prudently apply the very same policy they use when riding public transportation and taxis: travel with a trusted friend. To hold drivers accountable, Uber relies on an anonymous user rating system, regularly inspects its driver-provided vehicles, and offers up to $1 million in insurance "for those injured by a negligent driver," while many states mandate much less. For instance, Massachusetts requires $20,000.
Uber opponents insist that the service is operating in many cities without licenses, but the sad fact is many American cities are engaging in discriminatory practices that relegate legitimate services such as Uber to the "illegal taxicab industry." In New York City, the medallion system reserves a limited amount of licenses for taxis. Since Uber is not a taxi service, it is illegal for the company to collect fares in the city.
Other cities refuse to grant Uber licenses despite the fact the company's regulations on drivers and vehicles are comparable to that of most taxi companies. The grim truth is many governments refuse to legalize Uber and other car-sharing companies because of lobbying efforts by taxi companies and a desire to maintain the status quo. Profiting from an outdated taxi-dominated industry is more important to the government than letting the transportation market become competitive and benefit society through lower prices and increased service.
Uber, Lyft, and other ride-sharing companies provide many additional benefits to riders. Fares can be easily split between two people, and no cash or tips are required for Uber services. All fees are sent to a user's credit card account after the trip, which makes payment easier than the methods allowed by most taxis. Ride-sharing apps also allow customers to track the path of approaching drivers and to order different kinds of vehicles based on their transportation needs.
Uber and other similar transportation companies offer a reliable service that helps ensure there are fewer vehicles roaming the roads, guzzling gas, and polluting our environment.
Americans everywhere should regard the emergence of this innovative service as a boon and help convince cities and governments around the world Uber is the gateway to the future of transportation and should be supported rather than opposed. In virtually every case, city or state officials that ban ride-sharing services such as Uber ultimately do so in order to prop up the failing taxi industry and appeal to special-interest groups, rather than the citizens who elected them.
Uber is great. And its even better because liberals hate it.
Another plausible explanation is that Uber put together the perfect business model:
1. They generate revenue from drivers who don't work for Uber.
2. The company takes on no risk, and has no "fleet" to maintain as assets.
3. When you factor in the cost of fuel, operating/maintenance costs, and depreciation of vehicles, you'll find that most Uber drivers probably earn less than the minimum wage.
Uber is basically an app for gypsy cabs. I think it's a great business model while it lasts. I don't think it's going to last very long.
New York City is a great example of how these ride-sharing services work once they get established and are on the "inside" of a crony capitalist arrangement. Uber is now a partner of the NYC Taxi & Limousine Commission, and is working with the TLC to outlaw Lyft in New York City.
All of this means the cab companies hate Uber and have been trying to drive the company away. No luck. This is capitalism and free enterprise at its finest.
I have to say the cab companies do have a point that it’s unfair competition. They have to deal with city licenses and regulation schemes, OSHA, the EPA, etc. that Uber doesn’t. Not that the solution is to clamp down on Uber, but to ease up on taxi companies.
That's what I've been saying since Uber started.
” 3. When you factor in the cost of fuel, operating/maintenance costs, and depreciation of vehicles, you’ll find that most Uber drivers probably earn less than the minimum wage. “
Could you cite your source for this info.
“Uber is basically an app for gypsy cabs
That’s what I’ve been saying since Uber started. “
So, you’re saying that when you hail a “Gypsy Cab” you know in advance the driver’s name, license number, and have proof that he has a valid license, registration, and insurance (the way you do with Uber?)
Uber and Lyft have become hugely popular in cities where people have to call a cab company by phone in order to request a car.
This makes a lot of sense. What they're finding is that Uber isn't doing a ton of business in New York City ... they've captured maybe 6% of the taxi/limousine market. The author's point is that Uber and Lyft work best when they don't have to compete against a system where you just stand on a corner, wait for a cab to come along, and hop in.
Uber and Lyft have become hugely popular in cities where people have to call a cab company by phone in order to request a car.
This makes a lot of sense. What they're finding is that Uber isn't doing a ton of business in New York City ... they've captured maybe 6% of the taxi/limousine market. The author's point is that Uber and Lyft work best when they don't have to compete against a system where you just stand on a corner, wait for a cab to come along, and hop in.
I live in a distressed neighborhood. Cabs often won't come to my end of town. Uber is at my door a few minutes after I place the order.
And it is cheaper and no tips.
So the gypsy cabs went high tech. So what.
So you’re talking thru your hat.
Illegal taxicabs, sometimes known as gypsy cabs, are taxicabs and other for-hire vehicles that are not duly licensed or permitted by the jurisdiction in which they operate.
I guess you don't know what a gypsy cap is.
Don’t worry...the DOT will regulate it out of business. That is their specialty.
Ever taken an Uber ride? Ever talked to an Uber driver? I take them all the time. The drivers are by and large very happy with Uber, and make good money. Not enough to live on, but solid supplements to their income.
But Uber aims to be much more than a glorified cab company. Think forward. Companies are seeing customers go more and more to ecommerce, and they are figuring out how to deliver orders faster and faster. Why not use Uber drivers? You order something from the Target website, and 30 minutes later its delivered by Uber. UPS and Fedex can’t do that.
Uber isn’t going anywhere anytime soon.
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