Tag Archives: uber taxi

Tech company is shaking up the taxi industry

8 Dec
The Uber.com web site (screen grab above) offers more information about their services, and the company’s apps can be downloaded on iTunes.

The Uber.com web site (screen grab above) offers more information about their services, and the company’s apps can be downloaded on iTunes.

December 8, 2014 – Perhaps you haven’t heard of Uber yet. If not, that will certainly change in 2015, as the company continues to expand into Canada – and quite possibly into Newfoundland.

Uber.com is a smartphone app and a taxi company rolled into one, in which private citizens turn their cars into unmarked taxis. Passengers download the free Uber app, enter a name, password and credit card number, and they’re ready to ride. Drivers download their own app, which has a built in meter for calculating fares.

When you hail a cab with the app, it locates your position instantly using the phone’s built-in GPS. The app then locates the Uber driver nearest you, showing that person’s rating (out of five stars) and you accept or reject the offer. You can see exactly where the driver is on a map, and observe their progress as your ride gets closer. The fees are lower than regular taxis and there is no cash transaction – fares are charged automatically to your credit card.

Uber is not a small start-up trying to gain traction, it is a global super-company with active operations in 250 cities in 21 countries and a market valuation of $40 billion.

Not surprisingly, the “old school” taxi companies don’t like Uber at all for a carload of reasons, most of them quite valid.

Uber taxis are available now in three Canadian cities – Montreal, Ottawa and Toronto – but their arrival was greeted with controversy and legal problems.

The key issue with Uber is the company’s refusal to comply with regulations governing the taxi industry in cities where they operate. The drivers are not screened as thoroughly as commercial taxi drivers, their training is sketchy at best and they have much less insurance coverage. There are also questions about safety: Are the cars inspected for mechanical condition? Is it wise to get into an unmarked car with a stranger?

In Ottawa, undercover enforcement officials have been hailing the cabs and handing out $650 tickets to the drivers – a penalty that is sure to make many think twice about staying on the road. Toronto has challenged Uber’s legality in court and the mayor of Montreal has declared the cabs illegal.

And really, who can blame them? Existing taxi drivers charge fares that in many cases are regulated, their cars undergo frequent inspections and their insurance costs are through the roof. Uber is ignoring all those regulations and under-cutting existing taxi companies.

Uber defends itself by saying they are not a taxi company, they are a technology company. Yes, indeed. Which is like saying that Domino’s is not a restaurant because you can order a pizza online. With this line, Uber is being too cute by half. They are a taxi company no matter how you slice it.

Uber’s expansion strategy focuses mainly on large cities with populations in the millions, but there are smaller cities there as well; cities like Burlington, Vermont with a population of about 200,000. It is quite conceivable that the company will move into St. John’s at some point. If that happens, how will the city react? I put that question to St. John’s City Councillor, Tom Hann, who sits on the city’s taxi committee.

“I took a quick look at it and I also asked our legal people to have a look at it,” Hann said, in an interview. “We haven’t heard anything about it coming to the city and want to learn a lot more about it, how it operates and so on. I asked them to look at other Canadian jurisdictions where (Uber) has happened…. We’re trying to figure out what’s going on in the rest of the country and taking a look at Uber’s setup and so on, and then figure out what to do. Because I think it would have a major impact on the taxi industry here.”

Hann has a number of concerns with how the company operates, safety of passenger and driver being chief among them.

“What kind of impact would it have on the lives of taxi drivers who put themselves out there every day servicing all demographics of the population? And how do you vet people so that they are safe and how do you know people who use the service are in a safe environment while they get from point A to point B? Technology or not, they are providing the same services that the taxi industry is doing but without the constraints and regulation that the taxi industry has. It’s going to be a complicated issue that the city had better be prepared for.”

The core of the issue is regulation. If Uber does get a foothold in this market, would the city consider deregulation of the taxi industry to level the playing field?

“The city would have to review its by laws if Uber should happen. It would create a situation for sure… But I don’t think deregulation would happen.”

Hann said he will raise the matter with the taxi committee at their next meeting.

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