In fact it's such an important problem, that there were already a lot of people addressing it.
Before Uber I had to use my phone and call a number and talk to a computer that would dispatch a cab to me. Now I use my phone and use an app to talk to a computer that would dispatch a cab to me. Yes, the app is better, but I'm not being "given mobility", I'm being given the freedom to save a couple seconds of effort. Which is, you know, nice. But no, it doesn't have a drastically positive impact on anyone or anything.
(And since Uber launched in my area, some of the local taxi companies have launched very credible apps, so even that advantage turned out to be fleeting.)
The premise is similar - you use it to hail cabs and you have a maps screen that shows where cars are, how long they'll take to get you, taxi drivers number etc.
But the business model is crucially different: Instead of trying to eat the whole cake Hailo just acts as a go-between customers and extant independent taxi drivers.
It really is a non-zero sum for everybody involved. Customers get to "Uberify" their existing taxi service; Existing qualified experienced cabbies have a new conduit through which to access customers. Hailo themselves take a commision on each fare the driver books.
To me this is a far better proposition: A technology that improves the lot of everybody involved. Not just - and I use the term hesitantly - "scabbing" existing drivers.
It seems to me that much of Uber's growth and success is not just based on the technology but also on the gaming of employment regulations, bypassing regulations, and a smidgin of exploitation.
Many make the case that regulation is a barrier to improving services and only serves to protect vested interests and this may well be the case in places where Uber has flourished and Uber may in fact provide better employment terms in some cases. I don't know, but in many cases the taxi regulations exist to protect the customer .. to which Hailo is simply a welcome augmentation - rather than a replacement.
As a result, Black Cabs are expensive. The drivers also have a famous tendency for racist rants and their captive audience.
Hailo doesn't do anything to make travel more affordable.
That is a fair point.
With regards to drivers having to have "the knowledge" I consider that more a feature than a bug. I've gotten a few taxis in the last while with drivers relying solely on GPS - including a couple of Hailo drivers - who ended up taking hopelessly circuitous routes, or even got lost altogether.
Agree that the artificial limit of taxis and cost of licence is an issue. You should try getting a taxi in Dublin where there was wholesale deregulation about 15 years ago. You can get a taxi in minutes! Sucked for the drivers at the time though.
I believe in London you also have the option of the "minicab" (here they're called "hackey" cabs) - which is what the Uber business model really augments. All it takes is for those guys to catch up with technology and Uber becomes irrelevant once more. I'd be fairly sure they're up-to-date on the dubious labour practices though /s
In a market like Dublin, Hailo is an ultra-efficient dispatch service. I call for a cab to a destination, and the drivers decide if they want that business. Of the ~7 weeks I was there, I only had one trip where it took me an extra 10 minutes to get a cab, and that was because it was pouring down rain.
At busy times it will cost you more, though not too different at the end of the day from Uber's "surge pricing" though.
Most places in the US don't have a taxi system, they have scammers driving around in cars willing to gouge you for a ride.
In London in use Uber because it is cheaper + fare splitting but this habit has actually cost me money. When I went to a smaller UK city recently I ordered an Uber instead of just hailing a cab on the street like I used to. It cost me 4x what I usually pay and the driver had no idea where he was going.
So I guess my point is that both have their uses and in some cases cab companies can be better than Uber.
Depending on how they pivot to be profitable, Uber could actually cause disruption by creating mobility and then taking it away once the cash runs out.
"Yeah, I'll get the Uber. Ugh, 3x surge? Let me check Lyft. Sweet, $5 cheaper. It's coming in 5 minutes."
Drivers are already running both apps. When the subsidies run out we will all be fine, drivers included.
If Lyft is still subsidised they'll replace Uber, sure. What happens when the VC subsidy moves away from the category entirely though?
Once the cash runs out then the supply will return to previous market levels.
There is a real opportunity here to push cabs out of the market. The efficiency of driving a cab around and picking up at random is certainly less than an UberPool-style service that is basically constantly giving rides. I'd believe a 20-50% in efficiency.
If you don't believe their reports of profitability, that's fine. I don't know how to convince you otherwise.
http://www.businessinsider.com/uber-says-its-profitable-in-t...
This isn't how taxi cabs typically operate, except maybe in very dense neighborhoods. It's common in low to medium density areas to see cabbies waiting (often in the same parking lot) for a call from their dispatcher rather than driving around at random waiting for a hail. And in dense neighborhoods with enough riders, such as Manhattan, taxi cab occupancy comfortably exceeds 50%, at least at peak hours.
From the 2014 NYC Taxicab Fact book (which actually seems to cover the whole city, not just Manhattan) [1]:
Aside from these spikes, other areas of high occupancy occur mostly at peak travel times. For weekday AM rush hours (between 8AM and 9AM), the average occupancy is around 56%. For the PM rush hours following the shift change (between 6PM and 7PM), the average occupancy is around 62%. On Friday and Saturday nights, peaks occur around midnight and again at 4AM, when bars close in NYC. At midnight on weekends, 56% of available taxis are occupied, on average, and at 4AM, about 49% of available taxis are occupied.
[1]: http://www.nyc.gov/html/tlc/downloads/pdf/2014_taxicab_fact_...
I found a video on my old phone that I'd filmed to show how the system works:
http://www.taxiwars.org/p/electronic-taxi-dispatch-v1.html
Usually I'd make it to the address in about 7 minutes. Sometimes I was parked at the pickup address already (convenience store). I think there are two diaries titled 'instant taxi' on my site...
Uber is only profitable if you only look at SF, and ignore taxes paid, interest expenses, and equity issued. So no, by that definition I don't consider Uber to be profitable for a company that lost $1.2B in the same timeframe.
SF is also arguably one of the best public transportation markets, so I'm not sure how much Uber contributed to mobility there either.
The whole surge pricing thing was pretty innovative. A regular cab driver shoots to meet their daily quota. If it's raining, they hit that much sooner, and call it a day. There really are fewer cabs when the weather sucks. Or, more accurately, there are many more riders than drivers available.
The innovation is in having a flexible workforce. Surge pricing is mostly price gouging. Having plenty of passengers wanting to go places is incentive enough to get extra drivers on the road.
I've met a few 'ride share' drivers who only go out during the times they can expect to get a surge fare. One of them had graduated from an engineering program, and lived in Pittsburgh...
That sounds like it's working as intended, no? More people driving when there's more demand, less when there's less.
EBITA is a reasonable way to calculate profitability, which ignores taxes and interest. Equity-based compensation is a possible concern. Do you think that they're giving away so much of they're company to employees that they can't sustain that after they start paying pure-cashing (or cash + public equity) comp? (I'd honestly be surprised, but curious to know what you think.)
While I haven't extensively researched, what I did find was this:
""" Not thinking of depreciation as an expense is crazy. I can think of a few businesses where one could ignore depreciation charges, but not many. Even with our gas pipelines, depreciation is real — you have to maintain them and eventually they become worthless (though this may be 100 years).
It [depreciation] is reverse float — you lay out money before you get cash. Any management that doesn’t regards depreciation as an expense is living in a dream world, but they’re encouraged to do so by bankers. Many times, this comes close to a flim flam game.
People want to send me books with EBITDA and I say fine, as long as you pay cap ex. There are very few businesses that can spend a lot less than depreciation and maintain the health of the business.
This is nonsense. It couldn’t be worse. But a whole generation of investors have been taught this. It’s not a non-cash expense — it’s a cash expense but you spend it first. It’s a delayed recording of a cash expense.
We at Berkshire are going to spend more this year on cap ex than we depreciate. """
So tell me - what giant depreciation expense does uber have that is going to jive with this assessment?
Disclaimer: not really an uber fan.
It's a cab company that decided to ditch the cabs and to "contract" with "independent owner-operators" in an effort to circumvent the laws around cabs, and to avoid the hassles of actually having employees and capital expenditures. It's just the Web 2.0 business of plan of "let the users provide the content, and then sell it back to them", applied to physical objects.
You could already call taxis by phone (including your mobile), as you say. So you are creating something of a false dichotomy. At least where I live, there are also public devices (only in particular places, of course) you can use to hail a cab, in case you somehow don't own a mobile.
And apparently mytaxi was founded the same year as Uber, so Uber's idea wasn't quite that unique. I suppose it was just the right time for such services to spring into existence.
Uber appears to be the most successful, probably in no small part due to their ruthlessness.
I've never ordered a taxi in a small town, so I can't comment on what that process is like.
I'd guess I've called in for around 10 cab rides, and have had two experiences where a cab was requested, I was told it would come, and had it not come after waiting for much longer than was reasonable.
Uber doesn't actually show you where the drivers are before you request the ride. Those little animated icons just represent the density of available drivers, not actual car positions.
(It just sounds really dishonest for the app to do this)
It was neither difficult nor traumatic as the descriptions of the "problem" that Uber is solving that I see in these Uber threads. I've never driven a car in my 40 years of life, and therefore taken 1000 cabs in a dozen cities, but I've clearly only taken the best ones.
Maybe things have changed since the introduction of these ride sharing apps, but reliability of the Baltimore taxi system used to be atrocious outside of the 5 block radius of the Inner Harbor.
If you had said "black car service," I would have believed your story could be representative, but that is simply incongruent with every experience I've had in Baltimore. I tried the 3 major cab companies in Baltimore and had similar experiences with each.
I'm not alleging any moral shortcoming, it's just that there was no incentive to improve service to an acceptable level until Uber and Lyft arrived.
If a person's _primary_ concern is making mobility more accessible and affordable for _everyone_ especially the most needy then doing that by improving public transportation systems(buses and rail) and systems that are regulated by the governments(New York City Taxi and Limousine Commission). Those systems are obligated to serve the entire public.
FYI, you can call an Uber from the web or SMS.
http://www.forbes.com/sites/ellenhuet/2015/06/15/no-smartpho...
I still think my point that it requires upfront wealth and technical proficiency is still valid when related to public transportation systems.
Even though there may 2.32 billion people with smartphones there are large percentages of people who don't even in developed countries. For U.S.in 2015 folks who make less than $30k a year 50%. Folks older than 65 27%. Folks between 50-64 54%. Even if they own a smartphone that doesn't mean that Uber would be accessible to them.
Pew Research Poll from 2015 http://www.pewinternet.org/2015/04/01/chapter-one-a-portrait...
https://www.cdc.gov/healthywater/global/wash_statistics.html