Taxi services, chauffeured transportation companies, and other players in ground transportation, are attempting to exorcise a demon: Uber. This San Francisco-based network company makes mobile applications that connect passengers with drivers of vehicles for hire and ridesharing services. Taxi drivers have protested recently in Los Angeles, London, and Milan, Italy; they’re furious that Uber drivers don’t have to pay the steep prices for taxi licenses that taxi drivers end up paying off over several years. Chauffeured transportation companies are upset that Uber is entering major metro markets without complying with long-standing regulations, which can allow for undercutting of prices while using substandard practices for passenger safety and customer service.
Ride-sharing mobile apps are becoming more popular through Uber, Lyft, and Sidecar. This is happening during a time when carsharing services provided by Zipcar, Car2Go, City CarShare, and DriveNow, are gaining traction and subscribers throughout the US and Europe. Ground transportation companies – taxis, limousines, livery, shuttles, and buses – would love to see these companies go away or have their market presence reduced. Uber represents a new business model that could steal business from traditional ground transportation options.
Using the mobile apps is taking off because it’s cheaper than taxi rides and you can do it all on your smartphone or tablet. It’s hot enough for Uber to recently have raised $1.2 billion in venture capital in a deal that valued the company at $18.2 billion.
Uber doesn’t own any cars and has no drivers as employees. It matches up a driver/car with a customer looking for a ride and takes a percentage of the trip fare. Uber says that its value comes from screening its drivers, its pricing/payment system where customers can choose their service level and vehicle (ranging from a car to an SUV), and convenience. Customers can track the car on their phone and get a good idea of when pickup will be taking place.
Taxi companies and other transportation providers would like to see governments address the issue of driver background checks and insurance coverage for their drivers. Not long ago, an Uber driver was arrested in Southern California on suspicion of kidnapping a woman and taking her to a Panorama City motel. Prosecutors ended up dropping the case, but Uber did ban the driver.
The North Carolina Limousine Association (NCLA) and several other chauffeured transportation associations, would like to see governments crack down on Uber and other ridesharing apps. Uber has showed up recently to compete for passenger transportation in the Raleigh/Durham area. NCLA members are concerned about “rogue apps” and drivers hurting their markets. Uber doesn’t have to comply with long-standing regulations, which can allow for undercutting of prices while using substandard practices for passenger safety, limousine operators say.
The solution would be regulatory agencies enforcing insurance coverage rules, says Mark Mazza of HUB International, a chauffeured transportation company. Several cities, including Seattle and Miami, have removed Uber and similar providers from their areas using this approach, Mazza said.
4 thoughts on “Uber is public enemy No. 1 for taxis and other ground transportation companies”
writing an app that undercuts a business model and takes advantage of all that conservatives get accused of doing to screw someone and make money doing it can hardly be termed ” making a mobile application that connect passengers with drivers of vehicles for hire and ridesharing services” which sounds so benign and nice one can hardly find fault with the motivation. UBER is cheating plain and simple. so lets call a spade a spade. it will take some time but someone is going to get killed and the real UBER will then become obvious to the consumer, and that should be the end of it. but likely not until that happens …
Why would anybody “get killed?” Any driver can get in a traffic “accident”, any driver that is careless, reckless or gets in an “accident” is not going to last long in any transportation business. How is UBER cheating? By developing and delivering a better service, UBER is evolving the industry. Entrenched business practices that are too stubborn to change with the times and instead cry out “fowl” for someone else doing a better job than them and then trying to block the new business with undue regulation instead of improving their own product is despicable, Rockefeller mentality business practices. The old TAXI companies should go out of business if they can not improve their product. Competition is not a sin. By trying to eliminate their competition through regulation though is a sin. UBER is providing a service, in the free market, where the consumer wins. By asking the government to get involved and “control” the situation, we will all get less and have to pay more for it. Allow the free market to prosper and End the FED!
Much of this information is false. I drove my Air Cleaning Monster Truck, the INTERGALACTIC Space Cruzer with UBER during the Sundance Film Festival in Park City this January. To become an UBER driver you have to pass a background check. A driver must also have a business license, which mine is with Park City as a TAXI cab license. To go to the airport in Salt Lake, a vehicle must pass the safety and appearance inspection to get an airport license and again, a driver undergoes a background check to get a badge to be allowed to be a transportation provider at the airport. Both the city of Park City and the airport require insurance to get their licenses in addition, UBER will not let you drive with an UBER phone without insurance.
TAXI and Limo companies hate UBER because it is better, more efficient and serves the customer how they want instead of the old model of waiting on a cab, with UBER, the customer is in control and they like it.
UBER does offer different rates on different class of vehicles. However only one category, UBER-X is predominantly less expensive than a cab. My normal in-town Park City cab fare is $12 plus tip. With UBER it was a minimum $25, tip included, yet during “surge” pricing, when demand is high, the rate can be up to 3x the standard fare, so, many around town rides I gave during Sundance on the busy Friday and Saturday were $75!!!!!!
That is not undercutting existing TAXI fares, this is providing a premium service. Some customers want this and are willing to pay more for immediate service. The people that want to get a ride for less $ just have to wait and wait for a cab to roll by, or call a dispatch and hope that a car is sent their way.
With UBER, the customer can see where the available cars are in relation to them on the app map and an estimated arrival time whichis usually only a minute a two away with a focus on all pick ups being less than 10 minutes form time of “calling” on an UBER.
Now this was a special use situation. There is not the volume to drive UBER in Park City year round. In addition, the laws for the city of Salt Lake prevent UBER from starting business there. In Salt Lake, the law for a TAXI reservation states that reservations, or calling for a cab can only be made for 30 minutes or more in the future. With UBER’s business model to pick up all passengers within 10 minutes of being called does not work and thus UBER is not in business in Salt Lake until the law is changed.
I dont know about other locations, but I would imagine that anybody trying to run a business without a license will get ticketed and or shut down. LYFT, with the pink mustaches on their cars tried operating at Sundance in Park City this year, but without a license, every car got pulled over by the police and either ticketed or a warning given and they were completely shut down within 2 days~
At first I did not like giving up 40% of each fare to UBER as I only got 60% of all my fares with UBER compared to 100% of my own fares. Yet, it soon became apparent that I could make more money with UBER than running as just a TAXI as I have done in years past for the Festival. With my hard work and good driving, I was able to be the top grossing UBER driver for the 12 days of the 2014 Sundance Film Festival in Park City, UT. Luckily I also Drive Clean & Save Green with my Multi-Fuel vehicle. Although the exhaust out the tailpipe of my Suburban is cleaner than the ambient air in Salt Lake when my truck is running on cleaner, safer, less expensive, local CNG, the huge benefit is the cost per mile. A Subruban driving on toxic gasoline cost about 38 cents per mile, while my Suburban only costs less than 6 cents per mile on compressed Natural Gas, (CNG). So, while most SUV TAXI and LIMOs that drive the Park City area spend more than $100 a day on toxic fuel that gets their oil dirty and wears the engines, I can drive all day for about $20, while keeping the engine oil clean longer and extending the life of my engine dramatically.
I am glad that I had the opportunity to drive UBER in Park City. I look forward to doing it again. Next time I wont feel so bad about the high prices that the customers are charged though, as they do have options and they are choosing the option that works best for them. I look forward to the laws in Salt Lake City being changed to allow the evolution of the for hire transportation business to provide the same level of service to customers there that UBER can provide in other locations that are more accepting of technology and allowing it to benefit the consumer.
Tai W. Robinson
Drive Clean = Save Green!
UBER is number one. Taxi companies are public enemy number one.