10th August 2015

Local taxis vs. Uber – The online taxi service spreads

After taking the US by storm, the online taxi booking service Uber has branched across the globe, coming into prominence in the UK over the last year or so.

The service, currently active in 8 British cities – including London, Manchester and most recently Liverpool – seems to have become a big hit for passengers. However, underneath all the hype and flashy technology, Uber hasn’t exactly gone without a few controversies in certain taxi circles.

So, what’s all the fuss about?

In case you still didn’t know, Uber aims to streamline private car hire, allowing users to book drivers at the touch of a button. They simply download the app to their smartphone, request a car and off they go. On the face of it, the service is a revolution for passengers, but dig a little deeper and there are a few issues that start to raise a few eyebrows.

Previously described as a software that “eats taxis”, it’s left a lot of local taxi drivers seething wherever it’s spread. The service isn’t exactly its own taxi firm, though; it’s really all about the technology, existing as a booking platform bundled into a smartphone app.

Although seemingly a revolution in the States, the wider global spread of Uber has been met with quite a frosty reception. Licensed taxi drivers have come out in their hundreds, particularly across European cities, to protest the opposition from the startup business. But it’s not just the threat of competition that’s got drivers worried.

Driver criticisms

uber-contentAlthough passengers may find the app-based booking system convenient, the in-vehicle service is anything but uniform and could end up varying wildly. Concerns over passenger safety have even arisen in recent months, with question marks appearing over the drivers themselves.

It’s extremely easy for anyone to become an Uber driver. Background checking of new drivers is very basic with no requirement to be officially licensed for private hire. Drivers are effectively viewed as independent contractors, using their own vehicles. As a result, passengers could potentially be exposed to safety risks that simply wouldn’t occur with local taxi firms.

Some of the drivers signed up to the company have even criticised the service itself for the way new bookings are handled. All drivers need to keep the app open on their readily available smartphones, which could easily cause distractions. What’s more is that drivers are incentivised to respond to new bookings quickly. In fact, failure to respond within 15 seconds could even result in the driver being temporarily suspended.

The greatest concern comes from some passengers reportedly noting that their drivers appear distracted when tapping on their phones. This is unsettling news to hear, as continuous use of the app could mean drivers ultimately end up putting themselves, their passengers and even pedestrians at risk.

The problem with pricing

Uber’s business model involves users adding credit or debit card details to automatically settle payments via the app. While it can be convenient for passengers to not have to worry about carrying cash around, the fact that fares are instantly deducted from bank accounts feels a little bit dodgy. Additionally, a dynamic pricing structure allows fares to fluctuate without much warning given to passengers.

Charges are made similarly to standard meters, using base prices and measuring time or distance to increase fares. An automated algorithm is used to detect peaks and troughs in passenger demand, adjusting prices accordingly.

Sudden surges in pricing have angered passengers at times, ranging from peak holiday periods to any time the weather takes a nasty turn. The company even came under scrutiny after a hostage crisis at a Sydney café last year prompted the local pricing algorithm to increase charges four-fold.

What could it mean for our local taxis?

Since coming to the UK, the number of people training to be licensed taxi drivers has dropped considerably in cities where the service is active. This could be largely down to how quickly Uber drivers can start earning, compared to the costly and time-consuming studies required to become a licensed taxi driver.

As interest in becoming a taxi driver dwindles, Uber looks set to stomp all over the locals’ turf. With the service now kicking off in Liverpool, the city could easily see rapid declines in numbers of passengers using local firms and registered taxi drivers to transport them.

Despite the looming competition, there must surely be thousands of passengers who put their trust in local taxi firms with knowledge of the local geography. If being escorted around by an unlicensed, GPS-guided drone is the alternative, we know we’d prefer to stick with tradition.

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