An Uber Success

Since 2009, Uber (https://www.uber.com/?hero=b) has become one of the most successful startups in the modern era, now worth an approximately $50 Billion as of early 2015. It’s innovative work by integrating smartphone usage into the taxi/limousine experience has completely altered the transport-for-hire industry, transforming the way much of the world travels. In the article I have chosen to discuss here (http://www.shortlist.com/instant-improver/cab-wars), the author Jon Axworthy discusses some of the main innovations and controversies surrounding both the Uber services and the modern day taxi providers in their ‘war’ to monopolise a sustained market. It discusses how Uber manages to essentially ‘invade’ cities, crippling the monopoly that taxi drivers once held over the market by skirting pre-existing regulation and licensing. Today, the topic of whether Uber should be legal is hotly debated as many question both the legality and safety of such programs. Others however, suggest that Uber not only refines the car-for-hire experience, but cuts licensing costs to divers, provides job opportunities to otherwise busy individuals, and creates safer roads by providing intoxicated individuals a safe journey at the touch of a button.

The Uber startup has experienced a number of issues when attacking new markets with their service. The main ones remain: government and taxi regulation, as well as competitive start-ups. To combat the initial problem of globalisation, the executives at uber developed an essentially ‘blitzkrieg-like’ plan. When approaching a new market/city, they would begin by sending a ‘launcher (a motivated member of the marketing team)’ to assist the local executives in establishing a large amount of providers (drivers) in a very short period of time. Their thinking behind this was that government interference could be severely weakened if the service was at a noticeably influential level within the region before it drew notice. The problem came from allowing this to occur despite Uber’s odd choice of word-of-mouth advertising as its main source of customer-grabbing. However, through constructing unique region-based business models (focusing on the requirements of the populous such as safety, convenience etc.) this problem was soon negligible. Stemming from this, many taxi providers felt rightfully threatened by this competition that entered their networks so suddenly. Unfortunately for them, many people are quite against the idea of the old system of transport-for-hire as the monopolisation of select providers promote expensive fares, poor service, and an overall worse experience than the one that Uber provides its patrons.  

The second problem was the increased amount of similar startups that began as a result of Uber’s success in much of the world. In Asia particularly, many similar startups have convened towards this new mode of transport, backed by several large Chinese companies/investment groups. Thus it became apparent that a need for innovation was present should Uber wish to expand into these markets. This meant streamlining their calling app, adding a greater level of safety by providing both the passenger and driver with more information about the other participant, as well as ensuring the map system is kept up to date, and structuring their program to allow for drivers to operate within their own hours without being restricted by daily/weekly minimums etc.

If I were to suggest one solution towards fixing the reception of Uber to new communities it would need to be heard by both parties. It is well known that many countries gain significant income from taxi-licence holders through tax and registration fees. However this system allows for select companies to monopolise the market and drive the services into providing dis-satisfactory standards. Uber provides a solution to this with its innovative and reliable driver rating system, however the company and their drivers do not currently pay any fees to the local governments who rely upon that income. Hence it would be in both parties best interest to allow for governments to acquire a reasonable percentage profits from the drivers at the expense of allowing Uber to continue to grow within their cities.