Thursday, December 01, 2016

Letter To Taxi Leaks : Uber Has Become A Global Haemorrhoid For The Legitimate Car-Hire Business.


We certainly share a view of Uber, et al.  It has become a global haemorrhoid for the legitimate car-hire business.

One of the biggest problems has been the patently rotten job that has been done in terms of defining the issues for the public and as those issues have been presented to various courts in a number of places.  Please indulge me the opportunity to help everybody see the forest for the freakin' trees.

(Yes, I believe I do indeed have the definitive analysis--read on and tell me how I could possibly be wrong.)

Everybody is focused on the hype and crap, and nobody is digging in and looking at what's really happening.  Uber's "app" is nothing more than a gimmick if you don't pair it up with a large number of cars to "network."  Yes, people like being able to hail a ride without talking to anybody, and there would undoubtedly be a contingency that would swim upstream and keep using Uber, even if the company weren't providing superior service (as in faster response time to service requests).  But, in the long run, people will choose the service provider who gives them the quickest response--that's been central to the car-hire industry since jump.

The point is, if you look at those places where Uber has grabbed a major share of the local car-hire market, you'll see that they are invariably running many more cars at any given time than any of the "competing" traditional taxis.  That is the key to their success, not the app or their future vision, ad nauseum.

All Uber is really doing is enabling customers to place orders and have them transmitted to drivers via a cellphone.  (That's new?)

Here in the U. S., we have a divergence of legal decisions on whether or not taxis and TNCs are in reality doing the same thing. In local legal jargon, it's whether or not they are "similarly situated parties."  A judge in Boston said they clearly are, another judge in Chicago has decided that the way Uber dispatches ride requests makes them "different" from traditional taxis.  The matter may eventually land with the Supreme Court, although the issue to most sensible people is much simpler and more clear-cut than to justify the highest court in the land needing to make the final call.

Look at the number of vehicles and the cost per vehicle if you want to illuminate the real source of Uber's advantage over traditional taxis.  It's about economics and physical logistics, not technology.

As far as Uber being a "technology company" rather than a car-hire operator, that might play fine if it weren't necessary for drivers to establish their status through Uber--i.e., if all the drivers were in fact completely independent and autonomous, Uber could possibly claim all they do is offer dispatching service.  But, even if they don't own the cars, they pretty much own the drivers, and that to most logical people should make it clear that Uber is indeed in the transportation business.  In the same vein, if taxis start using all the same methods as Uber, can they then claim to be "technology companies," too?

Tom Edwards
Owner/Manager
Uptown Taxi
Chico, California

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