While unbeknownst to half the world, a war is erupting amongst ridesharing services and the taxicab industry. New ridesharing companies, Uber and Lyft, offer high quality services at a fraction of the cost of traditional taxicabs. Unlike those taxicabs, they are not heavily regulated and taxed, enabling them to undercut the competition. This has left longstanding taxicab companies screaming foul, as opposed to acknowledging the greater issue, stagnation.
Ridesharing on the Rise
Uber is now operating in more than 100 cities in 37 countries. Just last week it launched in Miami, Orlando and Austin, while in other areas the company openly defies orders to cease and desist. In most jurisdictions, the argument as to whether ridesharing companies should be regulated along with taxicabs, hinders upon whether they are considered a true ride pairing service or cars operating with meters. Uber’s position is that its app is simply an electronic means to hitch a ride, and that their vehicles do not classify as meter operated taxis because the smartphone running the app does not have to be attached to the vehicle. The opposing view is that Uber’s smartphone app operates as a meter and thus must be regulated under the same laws as other taxicabs. For now the debate continues; however, what we do know is that taxicab drivers are losing money and they want it fixed fast.
“We want something that’s fair to everybody,” said Parminder Cheema, a taxicab driver and elected member of the association’s leadership council. Taxi drivers frustration stems from the fact that they’ve had to abide by city rules — which include licensing fees, commercial insurance laws, and a bevy of other requirements — for decades, while Uber and others have come into town and conducted business in their own manner. The taxi medallion that permits one to operate a yellow cab in New York cost upwards of 1 million dollars.
Interestingly enough, while governments are moving swiftly to limit the expansion and growth of Uber and similar companies they are “tripping over themselves to lay down a legal framework for an impending wave of driverless cars—and autonomous car services would eliminate labor from transportation entirely.” This ongoing conundrum teaches a great lesson, at the expense of the taxicab industry. Never stop innovating. Never stop moving forward.
The Importance of Innovation
Stagnation of the taxicab industry is what created the opportunity for companies like Uber and Lyft to innovate and revitalize the industry. For many, the taxicab industry has been akin to a utility company for years – no real growth or improvement, but also no readily available alternative. The rise of Uber and Lyft has spawned new competition and left the taxicab industry scrambling.
Meanwhile, Uber continues to innovate and improve, safely simplifying necessities that were nearly impossible a short time ago. Recently, Uber began allowing riders to notify their previous driver if he or she accidentally left something in the vehicle. The driver can then read, and respond to the message directly within the app. Additionally, Uber often runs unique promotions that can be exciting for users. Offering brand new luxury cars to experience, as well as cars equipped with candy bars or breakfast bars for the rider to enjoy. This past winter, the company delivered Christmas Trees to customers upon request through the app. These innovative examples are what connects the users to the company and spark an instant relationship.
Protest Backfire – Uber Sign ups Spike 850%
This week’s recent protest in Europe left traffic all but immobile. Thousands of European cab drivers lined the streets with parked cars. The drivers feel that, “Uber and other similar companies are not competing on a level playing field.” While the protest made worldwide headlines, it may have ultimately done more harm than good. Since the protest, Uber’s sign ups have spiked 850%. This move has left many re-considering their recent statements that Uber’s valuation of 17 billion is too high – now many wonder if it is too low.
Uber isn’t the first company to challenge the status quo of an industry, and it certainly won’t be the last. Nonetheless, as pointed out here, at the center of every “new technology upsets an industry” story, the real change is driven by the people using that technology. It’s often the people’s disdain for the current system that perpetuates the new one. If the new system doesn’t deliver then the people won’t use it and not much change is caused at all. While it remains to be seen where things go from here, it appears that the taxicab industry may have won this week’s battle, but Uber and Lyft are winning the war.
Update: Septa workers in Philadelphia are currently on strike. Uber has taken advantage of the opportunity by offering users half price fares when fees are split between riders. Yet another move that shows the company’s true commitment to its users and an attempt to further humanize the industry.
- Article also appears on, LinkedIn