I’m going to be honest with you straight up – I have not been the biggest fan of either hire car or taxi drivers and so when UBER came along I not only thought how great it was to now have an alternative I saw it as being a potential disruptor to an industry in long need of reform and often back ended by a handful of major players.
Firstly to understand my dislike of taxi and hire car drivers you have to understand that as a frequent traveller my experience is not locked into a single location. In New York I had the experience of watching a driver play with the meter right in front of me even though I clearly stated I had caught him out – he was attempting to add another $20 to the fare. Then in Sydney there is the trip from Redfern to Sydney International airport which normally costs between $35 - $40 so how was it that it all of a sudden cost me $55? Apparently the driver said it was down to an increase in airport taxes – which I knew to be complete nonsense. Then there is LA where the price variance for a cab ride between downtown and Hollywood varies by between 10 and 60% irrespective of traffic. There are of course the filthy cabs, the questionable road worthiness of some cabs and don’t get me started about all of the tricks to slow down just before the lights.
But to give stick to drivers is actually a little unfair as I have been discovering with my use of Uber drivers across six different countries with the most frightening being my most recent encounter here in Australia. Sure, the fare was relatively cheap compared to a regular taxi trip between Melbourne’s airport and Burwood some distance way but the driving skills of the driver, the fact we nearly ran off the road as he tried to drive faster than the devil were it for me. I asked if he had insurance and the answer was a clear no and, further, I got the sneaky suspicion he was either driving with a suspended license.
So, I decided to look into what was happening with the UBER caper and what I discovered caused me to re-think my decision to give taxi’s a miss. First of all UBER has been a darling of some capital raising markets because they, like me, saw it as a disruptor of an industry in need of reform. In essence that disruption can be short-lived as a company trying to grow has missed some pretty important steps along the way to secure both its brand and its popularity.
What are those things? Well first of all its the legal framework through which the taxi and hire car industry more generally are regulated. There are rules and regulations that all drivers must abide by from insurance and registration through to the road worthiness of the vehicle itself. Importantly they have to display information about rules and regulations as well as where to complain. In Australia, as in Europe and the United States, government or independent bodies oversee the industry in order to maintain a balance. UBER may not understand what that balance is and this is where it is going to run into difficulties.
Oliva Nuzzi recently wrote about an incident she had with an UBER driver in New York where she felt that not only had she been potentially sexually harassed the level of private information drivers were provided about a customer left her reeling. That bought up the question of both the safety of passengers who use the service and just how far the UBER drivers were being vetted – it also raised the important question of whether or not UBER had the systems in place to protect the data it stores in its systems.
This is the challenge for a company that has grown to more than 34 countries since 2009. As Olivia reported in her article UBER has not been short of its own PR challenges. In March 2013, a 20-year-old passenger in D.C. accused an Uber driver of rape. In April, prosecutors dropped the investigation.
In November 2013, a San Francisco man alleged that he was physically and verbally abused by an Uber driver.
In January 2014, a driver hit and killed a six year old girl. The driver, Uber said, was not working for Uber at the time of the incident, sparking something of a debate about what "working for Uber" really means. Being "on the clock," various Uber drivers have explained to me, means that they are logged on to the app. If they are not logged on to the app, they are not, technically, "working for" Uber at that moment, even if they are in their vehicles and driving around. Uber received blowback for not taking responsibility for the accident.
Regulators often take time to catch-up to industry disruptors because as first they just don’t know how to deal with them. In Australia the Sydney Morning Herald reported that “Uber claims that its low-cost UberX service will offer customers up to a 20 per cent discount on standard hire car fees. But not requiring hire car drivers to be properly licensed is in breach of the passenger transport act. The maximum penalty is a $110,000 fine.” With “The NSW Minister for Transport, Gladys Berejiklian, warned that hire car drivers who were not licensed appropriately would face the consequences. “
"It is currently illegal for drivers in NSW to participate in what we call 'ride-sharing' activities like UberX," she said.
"The Roads and Maritime Service has already issued several fines of thousands of dollars for those breaking the law.
"My main concern at this stage is the safety of customers."
Forbes recently wrote about the integrity of the business models of both Air B’N’B and UBER with a focus on how as they grew they would need to rethink in order to maintain a competitive advantage over smaller more agile clients – but we think that the problem is deeper than that – in order to survive they need to get a lot of Quality Assurance and security built into the business model otherwise – lawsuits have a habit of killing companies.
As for my view of taxi and hire car drivers – my faith was restored recently when, in Dubai, I left my iPhone on the back seat. Thankfully I had the receipt for payment and the hotel contacted the taxi company who attempted to get in touch with the driver. But, it was too late – the driver had already returned to the hotel came to reception saw me and quietly put it into my hand. iPhone home, taxi driver honest, perspective changed.
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