November 7, 2014

Uber Alles: Does technology trump regulation?

While the City and Province have so far kept Vancouver Uber-less, the ride-sharing service based in San Francisco is now in over 200 cities and clearly intends to expand into this territory.
Your attitude towards Uber and its ilk I suspect depends on your self-interest.  If you hold one of the licences to operate – a taxi ‘plate’- you have something worth up to a million dollars, but it’s near valueless if anyone can enter the market.  If you’re one of the drivers who only earns a few hundred a night, it’s a definite threat – and an unfair one at that.  But from a customer’s point of view, the competition is terrific because the product is so much better.
How much better?
Here’s an example from last night, where my partner used Uber in San Francisco after he had downloaded the app onto his smartphone for the first time.  He put in the address where he was heading, the app told him the estimated time and price, and after a confirming click, a car was there in minutes, with the licence and driver’s name already identified.
No money exchanged hands.  Instead, after the trip, he received the transaction notice via email:




A taxi equivalent would have been about $15, plus tip, and there would have been no convenient record in his inbox. No wonder that After Uber, San Francisco Has Seen a 65-Percent Decline in Cab Use

Lessons for Vancouver?

While the regulatory playing field should be fair, the end of taxi dominance is probable – even if it isn’t brought to an end by Uber.  There are too many other ways for it to happen, and too much obvious benefit for both parties on either side of the transaction.

The question is: Why can’t taxis provide a similar-quality service if they want to survive?

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  1. Yellow Cab is apparently taking Uber to court in Vancouver.
    While researching another matter on BC Online’s Court Services, I discovered that there are three actions in play that were filed Nov 4, 2014. All are Yellow Cab vs. Uber BV (head office), Uber Canada Ltd., and Uber Technologies.
    I’m too cheap to pony up $6 each to get a look at the filings, but perhaps some crackerjack journo can get their boss to spring for it. My wild-ass speculative guess is that the filings deal with the common problems that cities and established cab companies have with the emergence of Uber and its brethren.
    ” She added that the drivers don’t hold city-issued licenses, haven’t taken city-mandated training, haven’t put their cars through a city-mandated mechanical inspection, may lack safety equipment like cameras and may be inadequately insured.” City of Toronto, Tracey Cook, executive director of Municipal Licensing and Standards.
    In my opinion, technology and society march onward, and fighting a rear-guard action is an expensive and losing proposition.

  2. Stagnant industries will try to play catch up, but it is near impossible for them because old habits die hard and they are stuck into a certain way of thinking.
    A more sad reality is that these cab companies have zero expertise in building complex software like Uber. Getting it to their level of polish takes extremely good talent hunting, product management and software experience. The cab companies do not have any of this, and they are up against a well funded giant that does.
    It’s safe to say they don’t have a chance in hell of surviving, unless they recognize the crisis they’re facing, become more vertically integrated and unite under an app with a similarly good experience such as Hailo.

  3. About time taxis get some competition as their service is poor today and low tech. Many taxis do not even have a card reader to pay. It is hard to get one, cars are dirty and drivers often smelly.
    Taxi firms that embrace Uber will thrive, others will suffer !

  4. If taxi plates go for up to $1M such as in New York, it shows me that cab fares are too high and that drivers are underpaid, ie significant room for more cab-like cars with more money making opportunities for opportunistic drivers.
    A great example of better technology improving customer services and wages, at the expense of establishments. It’s like forbidding cars as we threaten the horse and carriage industry 100 years ago, or forbidding jets as we threaten the propeller plane industry, or forbidding the Internet as we threaten the TV and radio industry.
    Yes, cars need to be safe, and drivers need to have appropriate insurance, but why not let the student or the part-time working mom make a few extra dollars per week if they like to drive people, for cash, from A to B.
    Professional independent cab drivers will find they can make more money as the overhead of existing firms, like Checkers or Yellow Cab, does not really benefit them but the taxi plate holder only !

    1. Exactly. Another revenue generator by the cities that hand out these licenses. Vancouver’s licenses are far below that figure though.

      1. Thomas, it isn’t a fee, the city doesn’t get a dime.
        It’s the going rate in the secondary market for an existing taxi license. You can’t get a new one from the city for any amount of money, you have to buy one from someone who’s selling and that’s the going rate. The city isn’t getting your million dollars, the former license owner is.
        The going rate is high because they are so few and the number is inky rarely increased.

    1. Vancouver has some of the highest taxi license fees in the world – and Vancouver is the ONLY city on earth that Uber has pulled out of after entering. That alone shows the strength of the local taxi cartel.

    2. I see. Why so high ? because there aren’t enough cabs ? Because BC is so unionized ? Because of a city-cab union cartel ?

      1. This isn’t a “fee”, it’s the going rate in the secondary market for an existing taxi license. You can’t get a new one, you have to buy one from someone who’s selling and that’s the going rate. The city isn’t getting your million dollars, the former license owner is.
        The going rate is high because they are so few and the number is inky rarely increased.

  5. The media and taxi co’s focus on the price is a shame. All the other app features would be very welcome, and would save the oligopoly some PR flack, in order of importance to the user experience:
    1. automatic payment, tip and emailed receipt
    2. automatic pick-up location identification, and tracking of the arriving taxi
    3. driver AND PASSENGER rating (why wouldn’t taxicos want the latter? or indeed both?)
    Go ahead and charge your $16 instead of $9 but give us the rest.
    Or maybe you know your days are numbered, so litigation has a better ROI than R&D…?

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