Why are Uber taxi drivers so unprofessional
What is Uber and why is it threatening traditional taxi services?
The London taxi driver is an institution with its distinctive LTI black cabs and drivers that can take you anywhere in the vast bulk of the English capital without even looking at a GPS system.
It is hard to imagine London without taxis. But last month they went on strike blocking the city and making some parts of central London absolutely impassable which was to cost the London economy nearly £ 125 million.
Why? Because Uber rented a car with Uber and MyTaxi in most of the world's major cities. Rent a car in most major cities using Uber and MyTaxi. You would now expect taxis to be hired with an app on your fancy GPS enabled device. Driving your location would be a daily event, right? Not correct. Read More And some might say not entirely for the better.
But what's that Uber thing ???
Let's make something clear. Uber is not a taxi service. No, Travis Kalanick - the founder of Uber - wouldn't say that. You would likely describe the service as a service that connects passengers with willing drivers. Granted, the line between this and traditional taxi services is incredibly blurred.
The way it works is pretty simple. A passenger calls for a car with a smartphone running the Uber app. An Uber driver will then be called to the passenger's location, who will then take them to their destination. No cash is exchanged - the passenger's debit card is paid for automatically - and no tip is required.
When demand starts to exceed supply - for example after a sporting event or on New Years Day or even after extreme weather - the price starts to rise sharply. This is known as "surge pricing", whereby the cost of a trip is often multiplied by a factor of nine. This means that Uber's affordability can vary widely.
It's also worth noting that Uber isn't a novel or unique concept. Sino-British startup Texxi launched a similar service prior to the launch of the iPhone in 2006. Lately, Uber has seen competition from the likes of Lyft and Sidecar, although these companies haven't had the same level of success as Uber.
What does it take to become a taxi driver?
First, a disclaimer. I will be talking about the Uber / Taxi conflict with a focus on London and the UK taxi industry. However, what I write about the taxi industry is going to be of paramount importance around the world.
But have you ever thought about what it takes to become a taxi driver? It's a long, tedious, and costly process. Before you even think about picking up a passenger, you'll need a full, clean driver's license. It also helps if you don't have criminal convictions, even if it's not strictly necessary.
The first step is a tight, reliable car. With a few exceptions, a majority of taxi drivers own their cars while some rent the car from the taxi company they connect with.
The second step is to get insurance that is ridiculously expensive. According to the 2013 Insuretaxi Taxi Driver Survey, the majority of taxi drivers spend more than £ 1,000 a year on insurance. 10% of respondents say they spend over £ 3,000 a year.
Finally, a taxi driver must be registered with a local authority. This alone can be quite expensive, with annual fees typically around the £ 200 mark. When a driver chooses a taxi company, he also has to pay an annual rent for a taximeter and radio, which often cost around 500 euros.
All in all, a taxi driver is expensive. According to the taxi driver survey mentioned earlier, the average takeaway rate for a taxi driver is £ 300 and £ 500 per week. This results in an average monthly wage between £ 15,600 and £ 26,000 per year.
It's not much better outside of the UK. In 2011, New York Taxi and Limousine sold two taxi licenses up for auction for $ 705,000, with the average price for licensed driver admissions tripling since 2002. By 2013, the cost of becoming a licensed taxi driver in New York had risen to $ 1,000,000.
Let's compare that to Uber.
You don't need special taxi driver insurance. You do not need to be registered with a local authority. The upfront costs are comparatively low.
In addition, the cost of operating as an Uber driver is completely proportional to the amount of work. There are no monthly fees and no membership fees. Uber only receives a small commission from the driver's earnings.
This has - perhaps rightly - irritated traditional taxi drivers, who view Uber as a circumvention of regulations that ensure that only qualified, safe drivers carry passengers.
It also means that taxi drivers are directly fighting for limited business with those who have bypassed the long, expensive and tedious process of taxi driver evasion.
The Uber experience
Perhaps the biggest threat to the traditional taxi doesn't come from the massive increase in competition, but from the fact that the Uber experience is actually pretty good.
All you need is a smartphone and the Uber app. Press a button and a car will pick you up. You don't even have to go to an ATM - it just charges your credit card.
Compare that to a traditional taxi company. Unless you are calling a cab from the street, you will need to call a shipping office. When you find yourself in a foreign country where you do not speak the language, this can be an immeasurable challenge.
Then you need to be able to position yourself where you are. When you are in an unfamiliar location, this can be difficult.
And let's not forget that you need to have cash on hand. Many taxis do not accept credit cards, and those that generally charge a substantial surcharge.
Put simply, Uber created an automated, consistent process for booking trips. This process works in every city that the passenger looks after, is cashless and does not require any language skills. For consumers, this is an incredibly tempting proposition.
What does Uber mean for the traditional taxi industry?
Uber has already won the rideshare race. The LED displays that identify the cars operated by the company have spread to Europe, South Africa, Australia and even the industrial powers of China. They are everywhere and they don't go away.
For the taxi drivers, Uber is a great opportunity to free themselves from the bureaucracy of taxi companies and local authorities and to cut business costs significantly. This means more money in the drivers' pockets.
They pose a very real and current threat to local authorities and most city-based taxi companies. Uber is and will continue to poach both customers and drivers until Uber is legislated or the incumbents offer a service, which is comparable to Uber in experience. To defend the taxi industry, they agreed to and worked together on apps that compete with Uber, like MyTaxi, which we previously reviewed in most major cities with Uber and MyTaxi Hire A Car in most major cities around the world with Uber and MyTaxi You'd be expecting taxis to rent with an app on your fancy GPS enabled device to say your location is an everyday occurrence, right? Not correct. Continue reading .
For the consumer, Uber offers a consistent and beautiful taxi service, but it is not without its problems. Uber drivers have been embroiled in a number of major scandals, including an attempted kidnapping and a tragic incident in which a young girl was dead. Despite the security measures in place by Uber, they are not entirely comparable to the controls traditional taxi drivers have to go through. There are even mobile apps that can be used to easily report unprofessional taxi drivers.
As always, I'm curious to hear what you think. Are you a taxi driver who saw Uber invade your lawn? Do you drive an Uber car? I would love to hear your story. Comment box is below.
Photo credits: Angry Businessman Boxer Via Shutterstock, protest against Uber taxi in London (David Holt), Uber Bogota (Alexander Torrenegra), taxi? (Beverley Goodwin), Taxi, Taxi! (David Morys), Uber (acanyi)
Find out more about: Travel, Uber.
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