Uber Meets an Unfulfilled Need

Uber is the posterchild for all kinds of criticism, some valid and others not. But the existing cab systems have themselves to blame for the rise of Uber too:
-         Artificial constraints on the number of cabs put by regulations;
-         Cab fleet owners didn’t care about their drivers;
-         Cab drivers didn’t care about their passengers, because where was the repeat business with any particular driver?
-         No guarantees of even a booked cab even showing up;
-         Next to impossible to find a cab on the fly when you wanted it.
Software companies had tried to work with the cab companies to fix these problems. They never got far, as Brad Stone explains in his book, Upstarts:
“No technology could solve for the fact that there was resistance among cab companies and drivers for this very basic change to the way they ran their business.”

This background is key to understanding why Uber, the next software company that tried to fix the problem, went about it the way they did, effectively killing off the traditional cab industry in city after city. And so the cab industry fights back the only way it can, not on the merit of its argument but by citing regulations that Uber violates:
-         Cabs can operate only based on licenses issued by governments, where is Uber’s license to operate? Uber argues saying it’s a ride sharing company, not a cab company.
-         Cabs need to have meters certified by the government whereas Uber decides price based on demand and supply.
-         In Western countries, drivers need to have passed tests to prove they know the streets. In the age of the smartphone and Google Maps, this is meaningless but as long as the regulation is there, the cab fleets are technically right in citing its violation. The law may be an ass, but it still needs to be followed.

The British government did not renew Uber’s license to operate in London. Weird since the government didn’t even try to fix the problem that led to the rise of Uber. The cab industry lobbyists won this round. Unfortunately, in the Brexit phase, it sends out a message that Britain isn’t your open-to-tech country. And it means that the 40,000 Uber drivers in London lost their jobs. Unlike the US, India and China, small countries like Britain don’ t have alternatives to Uber anyway; so customers will suffer. What were they thinking?!

Singapore announced it will stop increasing the number of vehicles on its roads come February, citing land constraints and congestion. As a wag said, this would have made life very difficult in a pre-Uber era.

Uber, like all tech, is the butterfly that flapped its wings. It is impossible to predict all the consequences: some of them will be bad, but others will be good.

Comments

  1. Ramiah KumarNovember 3, 2017 at 1:38 PM

    This blog covers some points in the context.

    One thing we the auto-rickshaw dependent people noticed. Before Uber and Ola came into the scene, very often the auto-rickshaw drivers would demand on a fixed rate and not go by the meter, so as to get more than the right amount. After Uber/Ola entry, the auto people realized that they are not competing with other autos but with taxis! These days, autos come without pre-demands; we can take it for granted that the meter will be turned on after we get in! Not bad.

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