Mobile Apps on the Roads – Disruption Uber Alles?

Taxi Image

Mobile app provider Uber has hit the headlines on both sides of the Atlantic, causing taxi driver strikes in London and Paris and becoming the subject of lawsuits in Berlin, Brussels and San Francisco.  You may have read that London cabbies are planning protest action against Uber next month.   This could include as many as 10,000 taxi drivers and bring London to gridlock (spot the difference!).  For more details, you might like to read the Guardian story here:

 http://www.theguardian.com/technology/2014/may/17/uber-smartphone-app-cab-taxi.

The legal suit in San Francisco concerns a tragic incident.  An Uber driver was using their app to respond to a passenger request when his car hit and killed a six-year-old girl in December.  The family contend that the requirement to use the app to fulfil that journey (in a competitive, time critical market) distracted the driver.  Whether Uber's defence, that the driver wasn't carrying a passenger at the time, has any bearing remains to be seen.  It appears to be at odds with their position that they provide an app, rather than a private hire service.

Uber is not an uninteresting company.  It is certainly offers a disruptive technology, as many of the most notable firms of the last 20 years have been.  The likes of Google, Napster, Apple, Facebook and Twitter have changed their industries permanently .

It is currently valued around $4Bn and has an impressive list of investors, including Goldman Sachs and Google Ventures.   Bloomberg has reported that it is looking at a further round of funding with a $10Bn valuation.

That which we call a rose....

The BBC has referred to Uber as a car sharing (or lift sharing) company:

http://www.bbc.co.uk/news/technology-25927132

http://www.bbc.co.uk/news/technology-27141129

The BBC is categorically wrong.  Uber is not a car sharing provider.  This isn't a matter of opinion, a legal challenge to Uber in California gave rise to a new classification of transportation network company (TNC).

Car sharing is the process of a driver taking a passenger on a journey they're already making.  It has the capacity to reduce the congestion, cut carbon emissions, ease demand for parking, save fuel and other motoring costs.

Uber doesn't do that at all.  Car owners sign up with Uber to act in a similar role to private vehicles for hire.  Journeys are priced at or above the rate for a regular taxi.  The drivers therefore are earning an income from offering a service.  This is not car sharing.  Those looking for a car share lift might expect to make a contribution of around 10 pence a mile, to cover the driver’s fuel costs; with Uber they’ll need to pay a base fare of £3, then £1.75 a mile for a basic car, up to a heady £5 plus £4 a mile for a luxury vehicle.

In 2012 the company CEO, Travis Kalanick, indicated that they intend to branch into ridesharing (the American term for 2+ car sharing).  He may well still harbour such intentions, but Uber offers no such service at present.

It's difficult to see how they would blend drivers looking to charge taxi rates, which they'd have to declare as income, with those who are offering to share for more altruistic or convenience reasons.

The company already experienced discontent from its high-end drivers when they were undercut by a budget category.  Undercutting both with free or "fuel cost only" journeys would surely disenfranchise both, not to mention confusing the brand.

All Hail the Cab

HailoUber's business seems closer to Hailo, the mobile app for taxi booking.  However, rather than linking to a black cab, each journey request is advertised to drivers who have registered with Uber.  Their claim is that theirs is a superior service (it carries a premium price) as they send you details of the driver, the route to be taken and enable user feedback.

Hailo might well counter that most of these features are also available with their app, which links to a larger database of licensed taxi drivers, who have all passed "the knowledge" to demonstrate their intimacy with London's road network, and have access to bus lanes.

The Future's Mobile

Whilst I couldn't describe Uber as having any claim to be a Sustainable Travel solution, or even related to 2+ car sharing, its disruptive technology gives us at least two lessons.Travel Green Pin Stuck In A Mobile

The first is that the future of 2+ car sharing lies in mobile apps far more than in traditional websites.

The second is that this must be implemented with careful consideration.  After all, we'd prefer to be disrupters like Apple or Google, rather than the likes of Napster, whose most popular incarnation was forced out of business in the law courts.

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3 Comments

June 30, 2014 10:06

Andrew Barker

I'm not sure why taxi drivers feel the right to strike over Uber. It's just market forces and new technology. They either need to be able to adapt and compete or they'll just become obsolete. Ultimately not many companies compete with Google and come out on top!
May 31, 2014 02:14

Dave B

Uber is featured in the Guardian today:

http://www.theguardian.com/uk-news/2014/may/30/comparing-uber-and-traditional-uk-black-cabs

I'm in two minds about it. The comparison with a Black Cab comes out quite well, but that's just one test.
May 23, 2014 10:19

Rachel Davies

I've used Hailo and it rocks!

Why would you ever pay those rates to book an Uber driver who isn't even employed by them? Looks closer to an unlicensed minicab than a taxi and at a premium price.