In this ever-changing technological world, it's surprising that the taxi industry had remained relatively unchanged for decades since its inception. That is, until the introduction of Uber in 2009. This seemingly basic idea for a company quickly took the world by storm, establishing its place in the taxi industry after only being in business for a few years. The company really became a sensation starting in late 2015 leading up to the present day. But now in the year 2017, 8 years after Uber was founded, does it still hold up as a rival to traditional taxi companies, or has its popularity faded away like any other fad?
We'll begin with Uber's unique business practices. Originating as a software company, Uber put a lot of focus into their apps and online capabilities. This idea paid off in spades as Uber's mobile app trounced any existing mobile taxi services on the market due to its quality, polish, and extremely user-friendly design and functionality. Not only that, but Uber is famous for it's ability to make practically any driver into a paid employee completely through the use of their app. Never before has a taxi company considered this idea of converting users into employees.
It's not just all talk either, this revolutionary business practice has also had a huge effect on the taxi industry since it was introduced. Statistics suggest that Uber's influence on the market resulted in a 50% increase in the number of self-employed drivers in various cities across North America. Records also show that this shared economy business strategy resulted in a 10% decrease to the average income of traditional taxi drivers as recently as January of this year.
This outbreak of success has caused much strife between Uber and traditional taxi companies. Many protests have taken place, most of which depicting taxi companies arguing against Uber's shared economy tactic. To give a more local example, the city of Toronto announced in August of 2016 that Uber had been officially licensed as a Private Transportation Company (PTC). This sparked a mass outrage from dozens of ordinary taxi drivers who claimed that the city was ‘kicking taxi drivers to the curb in favor of Uber.’ Whether or not these statements have any truth to them is frankly irrelevant; the point is that Uber is having a notable effect on the taxi industry as a whole.
This particular protest did bring an important issue to the table however, that being whether or not Uber drivers are properly background-checked. One driver present at the demonstration was quoted saying: “If Uber is going to operate as a PTC, it shouldn't be using drivers who haven't had their backgrounds checked out by the city.” Regardless of where you stand in this debate, I think most people would agree that employing drivers who haven’t been properly background-checked is a fair argument against Uber running as a Private Transportation Company. Uber was quick to respond to this statement soon-after the protest by announcing that they would indeed be putting their drivers through a background check. The city was expected to issue some 12,000 licenses as part of the plan, so it’s anyone’s best guess as to whether or not Uber went through the trouble of actually licensing all of their drivers.
Another significant feature that separates Uber from traditional taxi companies is a focus on customer service. In fact, many people have cited this as the main reason that they prefer Uber over ordinary taxi services. This is tied primarily to the rating function of the Uber app. For those unaware, customers using Uber have the ability to rate their experience out of five every time they use the service. This is an incredibly smart business tactic as it not only helps the company keep track of the quality of their working drivers, but it also encourages drivers to provide an overall superior customer experience.
You’d think that this superior level of service would demand a higher fare, but Uber challenges the system by charging significantly less than their competitors. In fact, statistics suggest that Uber’s fare undercuts that of traditional taxis by 50% in the city of Toronto. When you consider this focus on customer service combined with significantly cheaper rates, it’s unsurprising that modern society tends to favor private taxi companies like Uber or Lyft.
In the end, it’s become quite clear that private taxi companies are the way of the future. Companies like Uber have simply put far more effort into customer satisfaction and have utilized the evolving technology to their advantage. That’s what traditional taxi companies need to take away from this feud. If they wish to survive in this industry, they need to understand that doing the bare minimum is no longer acceptable in the field of transportation. Instead of protesting and demanding change, taxi companies have to adapt to the changing market and actually work to improve their service.