Uber's business model simply cannot survive in sensibly regulated markets when they have to follow the regulations.
Uber could follow the regulations, charge approximately the same as a taxi, and still make a moderate profit. There's nothing about Uber's business model that says they have to be cheapest or have a monopoly. The only reason they choose not to do that is ambition (or greed if you're being less generous to them).
This is just Uber showing governments around the world that they're willing to leave a market entirely if they don't get their own way. Uber are betting on their customers becoming vocal opponents of the regulation and lobbying their government to change the law in order to allow Uber back without the rules, and for other governments to become fearful of enforcing their regulations in case they anger Uber's customers too. It might work. On the other hand, maybe people aren't actually that bothered about which particular ride company they use, and Uber's strategy won't work. It'll be interesting to see what happens.
> Uber could follow the regulations, charge approximately the same as a taxi, and still make a moderate profit.
That's what they're doing here in Berlin and I really wonder if they make a profit, especially when the competing apps are also funded by deep pockets that don't necessarily try to make direct profits.
That's the real problem - Uber has a load of investor money they can use to artificially keep a low price, establish their name, push competition out of the market by undercutting, etc. Until they start to want to make real money.
I wonder if the Walmart strategy of destroying your competition by undercutting prices can work for Uber.
Is the barrier to entry for an app-enabled personal transportation service that high?Therr are also many substitutions for the service suxh as driving one's own car, carpooling, actual ridesharing via a platform, mass transit, biking, etc. There are already open source implementations of this and ride sharing.
I apologize if this sounds misinformed, but as tech advances and platforms such as these become more mature, could we not use some of the principles established by blockchain to create a rating system that is open/transparent so that drivers and passengers can just directly transact with each other?
Personally, I like Uber/Lyft's service but I dont find the price to be a. bargain. As it is, I primarily use it for transportation if there's is a chance that I may be drinking alcohol or when parking is going to close to thr cost of a ride
Unfortunately they're going to have to do a lot of establishing to change the associations with that name, now. Short of Kalanick being struck by a freak bolt of lightning, that seems unlikely to happen. Far from it, a place that toxic is going to keep bleeding over time.
Only the tech elite even know who that person is. Everyone I know loves Uber and we use it everywhere we go, especially when on vacation in other countries as it's easy and reliable with no need to spend an hour researching and setting up local apps and services.
Between Applebaum, Waymo, and the crash that got the Waymo suit mentioned in every article about the crash for a couple of days... well, maybe they'll hear about it sooner or later. Certainly any Uber competitors must be sitting in a room with their marketing departments and thinking about how to capitalize on this, once they're past the "Hand them lots of rope and give them space," phase.
You may be right, but I don't think this is all as obscure as some people would like to think. That's an article that seems to recognize that many of its readers will be familiar with what I'm talking about.
> Uber are betting on their customers becoming vocal opponents of the regulation and lobbying their government to change the law in order to allow Uber back without the rules, and for other governments to become fearful of enforcing their regulations in case they anger Uber's customers too.
And I suppose that certain markets are really going to be the driver of the customer's rallying cry. I have seen posts from different locales (typically major US cities) where people have said that hailing a cab is almost impossible. You call dispatch, and one might show up within the next hour. The cab driver could have stopped to pick up another fare while on the way to you.
Then there are places like my locale where Uber is present, but there isn't a need for it. My city is markedly not walkable. The surrounding neighborhoods are not walk/bike friendly. I used to live 20 minutes away from my office via bike, but I wouldn't dare attempt to ride a bike in from that house. No bike lanes, no sidewalks, so few grassy shoulders for when traffic gets up to 50 mph. The only feasibly way to bike to the city was to take an additional 15 minutes by cutting through neighborhoods. Public transportation is a joke. There aren't a ton of people here, and everyone has cars for the above reason - even if it's a late 80s junker with 300k miles. Calling a cab is not a gamble here. It just shows up.
In the other areas I first mentioned, I think Uber really did disrupt the cab industry in those markets. Cab companies had to give up their monopoly to compete with a mostly unregulated ride-sharing service.It was either fix your issues or lose to Uber. I don't think Uber has the worldwide (or even US nationwide) support to rely on it's customers. It's possible that some hubs will have champions for their cause, but I don't think Uber has that vocal customer base that it needs.
From a UK perspective, Uber has really sorted out a lot of problems with the taxi market.
Prior to Uber, getting a taxi involved phoning a dispatcher of your preferred firm and usually get told "it will be about 30 minutes". Then ringing back after 40 minutes had passed to enquire about it and then it turns up another 10 minutes later. And then paying about £15 for a journey that costs £5-8 with Uber nowadays, depending on traffic and surge.
Nowadays taxi firms are much better about actually getting to you quickly (and when they say they will, roughly) and charging about half as much. They're still not as cheap or quick as Uber but it has definitely improved.
Nevermind problems with only accepting cash and somehow never having change...
That's exactly what I meant in both instances. Uber is one of the few companies that actually disrupted a market where the main player had to make a major change or lose out (probably not full elimination) big time.
On the other hand, it seems like Uber's necessity is confined to hubs. I use the US as an example since both I live here and the markets are very disparate. People do use Uber here. However, there was nothing to really disrupt. I still see (as far as I can tell) just as many taxis as before. It feels more like Uber is supplementing hailing services than replacing it here. And in a lot of smaller markets like mine, I feel that it is similar.
How many markets can Uber realistically snub before it starts to become an issue?
"Uber are betting on their customers becoming vocal opponents of the regulation and lobbying their government to change the law in order to allow Uber back without the rules, and for other governments to become fearful of enforcing their regulations in case they anger Uber's customers too."
In my country, Uber doesn't have a good reputation at all. People like the convenience, but that's about it. No way people are going to lobby for them.
I'm from Copenhagen, and I'd say that's the case here too. I know lots of people who've never used Uber in Denmark, and those who have do it for the price. Taxis are easy to come by and they have waaay better service and more comfortable cars.
There's nothing about Uber's business model that says they have to be cheapest or have a monopoly. The only reason they choose not to do that is ambition (or greed if you're being less generous to them).
Except that greed isn't just a complicating factor to their business model; it is their business model, basically. Or more specifically -- as has been widely noted by observers; and may even be present in their own statements -- the (perceived) paramount need to obtain a globally dominant market share -- or slip quickly into irrelevance.
It's even in their name, after all: über alles. And if a few rules need to be broken -- or employees' careers/and or personal lives severely hobbled along the way -- so be it.
† A position that historically has been difficult to obtain in similar service sectors, even locally, without corruption and/or a state-enforced monopoly. But for Uber, apparently, has become a life-or-death mission to attain.
> On the other hand, maybe people aren't actually that bothered about which particular ride company they use
Which is indeed the case here. Why people would prefer one to another? Cheaper, or more drivers or both. Brand? Simply don't care, and Uber at this point has a notorious one. If there is demand (from both drivers and riders), I guess it take several months short to fill in the void Uber has left there.
I think ride-hailing service is meant for local companies to excel(public relations, better communication with government and compliance with regulator), Uber simply cannot enjoy the level of monopoly Google and Facebook have, because at its heart, it is not a tech-driven business.
I use national ride-sharing services like Uber or Lyft as a traveling consultant for the same reason my grandma eats at McDonalds when she goes on vacation: I know exactly what I'm getting every time I make the call. Every city has different taxi regulations; can I step into the street and hail one? Do I have to call one? Which company should I call? Can I trust them? The locals might know the answer to this, but who can I trust to ask at the airport?
I also have moderate social anxiety when I'm on the phone, which is doubled when the other person is impatient or rude. And the few times I've had to call a taxi, the dispatcher has not made me feel very welcome. It's a lot nicer to be able to call a cab and not have to talk to anyone.
Ride-hailing services going back to being locally restricted companies would destroy all of that, so I'm hoping that won't be the case. I don't want to have to guess who to call, I want to put in an order and have it delivered to me. Just because Uber is a shitty company doesn't mean national ride-hailing services won't and can't work.
> It's a lot nicer to be able to call a cab and not have to talk to anyone
That's not limited to Uber. Plenty taxi companies in the EU offer that exact service through their app. All it takes is 5 minutes of web search to figure that out. It's probably a good idea to prepare a bit before entering a country you're foreign to regardless, transportation would be the first thing I'd search for.
> Just because Uber is a shitty company doesn't mean national ride-hailing services won't and can't work.
And the legislation put in place isn't preventing any of that.
>All it takes is 5 minutes of web search to figure that out. It's probably a good idea to prepare a bit before entering a country you're foreign to regardless, transportation would be the first thing I'd search for.
This is why I use Uber. I don't have to do any of that. No stress. Just land in a country and get an Uber to my hotel. Walk out of a museum and get an Uber to my restaurant. It's easy. No thinking. THAT is why Uber is successful and those local apps can't replace that.
Except you won't be able to do that in Denmark anymore per the article that this thread is about. And there's a number of other places in the world where Uber does not have coverage. Uber doesn't even tell you where they are, so you get to find that out when you get off a plane.
There's an inflection point where the "no stress" mentality goes away, and Uber might be headed there. It certainly isn't headed away from it.
Uber seems to be adding far more cities than subtracting. Just 2 years ago you couldn't use it as a world-traveling app, and now it's the closest thing to a universal taxi the world has.
You've to download the app and then hope that they are in English. If they are indeed in English you've to create an account and add your credit card information before you can call a cab.
I was in Germany recently and compared the fares quoted by both Uber and mytaxi apps and Uber came out to be cheaper by at least 5 euros on multiple occasions.
Actually I mean just within my own country. Taxi services in Madison are a lot different than ones in NYC, which is a lot different from Nashville. I wasn't even considering a language barrier.
> Uber could follow the regulations, charge approximately the same as a taxi, and still make a moderate profit.
Really? Because every analysis I've seen has suggested that Uber is basically subsidizing rides with VC money until some new element (the main hope seems to be self-driving vehicles) let's them transform their business into something that could be profitable.
If you look at how a taxi works, I request a taxi and I pay the driver directly. Who the money I pay the driver is split is then a private deal I nor the government know nothing about nor care,
If I order an uber (for reference, I never have for I've never been anywhere that doesn't have an equally good or better taxi service) you don't pay the driver you pay uber. Uber then pays the driver and many European governments regard that relationship as one of employer and employee.
How would they get seat sensors and fare meters into the cars?
I'm on board with things that are actually done for sensible reasons (e.g. background checks for drivers in Austin) but this is too much. I'm an adult, I can choose if I want to trust Uber or not to charge fairly.
Uber could follow the regulations, charge approximately the same as a taxi, and still make a moderate profit. There's nothing about Uber's business model that says they have to be cheapest or have a monopoly. The only reason they choose not to do that is ambition (or greed if you're being less generous to them).
This is just Uber showing governments around the world that they're willing to leave a market entirely if they don't get their own way. Uber are betting on their customers becoming vocal opponents of the regulation and lobbying their government to change the law in order to allow Uber back without the rules, and for other governments to become fearful of enforcing their regulations in case they anger Uber's customers too. It might work. On the other hand, maybe people aren't actually that bothered about which particular ride company they use, and Uber's strategy won't work. It'll be interesting to see what happens.