Is Uber changing the taxi industry?

Recently my friend and I were walking home from a bar at 3AM. We thought about getting a cab, but then we decided that we’d be safe walking home that night. But we ended up getting some very unwanted attention from some men. Perhaps we could have taken a cab home to prevent something like this from happening?

The problem was that the cab we reserved to pick us up never showed up. And we couldn’t flag any cabs down. We had to walk.

Then I heard about Uber, a passenger transport company using GPS and mobile tech to provide low-end luxury car transportation.

How Uber works

Uber

Here’s how Uber works from a passenger’s point of view: You install the Uber app on your smartphone and enter your credit card information. When you need a cab, you open up the app and set a pickup location. Then a driver will pick you up, drop you off, and automatically charge your credit card.

It’s a bit more expensive than a cab, but for me it’s more than worth the price. The car is clean, the drivers are nice, and most importantly, the service is reliable.

Uber and taxi politics

However, there are others who do not like Uber. For example, there’s this article on TechCrunch.com explaining some recent issues with Uber’s presence in Washington DC. To sum it up, Ron Linton, the head of Washington DC’s Taxi Commission, claims that Uber “is operating illegally…we plan to take steps against them.”  [Source 1; below]

Uber posted this in their blog in response:

“We launched in Washington last month confident that we are compliant with the rules and regulations with the District. Prior to launching we had conversations with representatives of the taxi commission that helped us understand the regulatory landscape and convinced us that the Uber transportation alternative was legal in the city of Washington, DC.” [Source 2; below]

How Uber could change the taxi industry

Perhaps Washington DC and taxi companies are feeling threatened by Uber? Uber’s beginning to change the passenger transport industry. For example:

– New technology: Uber uses smartphones and GPS, not expensive consoles you might typically see in a cab. This new technology is relatively inexpensive and extremely accessible. Efficient, affordable technology could cut some of the costs within a taxi company.

– Increased service expectations: Uber is raising service expectations within the taxi industry. Customers now expect to be able to book a cab on their phone, and for the cab to show up in 5 minutes. Customers are also expecting to be able to rate their driver,  the car, and the entire service.

– Pricing: For now Uber is more expensive than a typical taxicab. But this could change in the long run. Taxi companies might fear that, as the demand for Uber increases, the supply of Uber services will increase to a point that actually reduces the price of Uber services. Then Uber would offer a better taxi service for the same (or lower) price than a typical taxi. This could take a lot of business away from a general taxicab company.

Perhaps taxi companies need to start adopting some of Uber’s strategies regarding technology and customer service?

Sources:

1. http://techcrunch.com/2012/01/11/uberalles/

2. http://blog.uber.com/2012/01/11/uberdc-needs-you/

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