In our previous blog, we discussed the ridesharing company Uber. The American firm has been described by those in the traditional taxi business as “unprofessional”, “dangerous”, and “damaging”. Not exactly glowing reviews.
So what, precisely, is Uber doing to provoke such responses? Are they really the devil incarnate, as most taxi firms make them out to be? Or have taxi cabs got the knives out for a business that they know threatens their livelihood greatly?
Well here is our definitive guide to everything you need to know about Uber.
The Basics
Uber was founded in March 2009, based on the idea of combining the institution of taxi driving with the world of apps. It began in San Francisco, launching the first version of the app in 2011. It expanded in New York, Chicago and Washington DC that same year, and has subsequently spread worldwide. They now operate in 58 countries (covering all 6 continents), with 300 cities currently included in the app’s scope.
In the UK, the company currently operates in Birmingham, Bristol, Leeds, London, Manchester, Liverpool, Newcastle and Sheffield.
As of mid 2015, Uber was estimated to be worth $50 Billion.
How does it work?
The commonly held belief is that “anyone can be an Uber driver”. This is wide of the mark, but not by much. If a potential driver can pass a background and DVLA check, and own (and insure) a 4 door car that is 10 years old or less, they can be an Uber driver.
Each driver is given a company iPhone. They are alerted to anyone wanting to use the service nearby via the Uber app, and then agree to the job (the app will notify the driver on the anticipated journey before they accept). The customer will be given a rough estimate of the cost of the trip before they set off, but they don’t pay until the end (via a registered debit or credit card stored on the app). Users also have a choice of car in some cities, with varying prices. Pay less and you’ll get a run of the mill car. Go more expensive, and you can have SUVs picking you up.
The advantages
As with most customer driven businesses, the real reason Uber has excelled is the belief that it is, on average, cheaper. Taxi companies have to worry about such things as insurances, training, maintenance, and licensing – all things that Uber does not. They are essentially middlemen, connecting users to drivers and taking a share. None of the drivers are Uber employees – they are simply users (albeit ones with company iPhones). These savings are passed on to the customers.
There is also the convenience. Instead of phoning a taxi company, being given a rough time of arrival, and then left waiting for the horn honking when they are outside, Uber users can track their incoming ride. Plus, as an off-shoot of Uber’s set-up, the service has gained popularity due to the social network that has sprung up around it. You could be sharing a ride with anyone!
The disadvantages
. . . Or to put that another way, you could be sharing a ride with anyone. The vast, vast majority of Uber drivers are ordinary people just trying to earn some money. The checks aren’t exactly thorough – as long as users have no priors, they can be Uber drivers. There is no interview protest, and a car merely has to pass a “test” by another, more experienced Uber driver, who examines it for cleanliness and condition.
This is the main point of opposition taxi drivers have with Uber. There is no training involved, so customers could be climbing into the car of a dangerous driver, or worse. And unlike taxi companies, Uber takes little to no responsibility for the actions of their drivers, as they aren’t employees.
Uber has also found criticism for a practice they use called “price surges”. Rates increase during times of heavy app usage – a recent American blizzard brought around an eight fold increase in fares. This has been described as price gouging, but Uber maintains that it is simply working on a supply and demand model. They have since said they will drop the surge pricing for natural occurrences like snowfall, but times like New Years Eve and Halloween can see huge spikes in costs.
