Is Uber a good alternative to a taxi?

For those who haven’t heard yet, Uber is a new smartphone-based system for providing an alternative personal transport to a traditional taxi service. It first appeared in America in 2010 and has since spread to 53 countries and more than 200 cities worldwide, including Sydney, Melbourne, Brisbane Adelaide and Perth.

So how does Uber differ from a regular taxi?
Unlike regular taxis, Uber drivers are just ordinary folk who have joined the Uber network to offer transport using their own cars. They don’t have the expense or regulation of owning or leasing a taxi licence and so can generally offer a lower cost (with some exceptions explained later).

The main attraction of Uber is in the booking system. With a traditional taxi service you ring up, talk to an automated answering system to make a booking and then hope that it turns up. While most of the time the cab will arrive on time, they can sometimes be late or may not turn up at all and getting information on a late cab can be difficult.

Uber offers a different booking model, based around a smartphone app. Once you register on the app you simply make a request for pick up and indicate your destination. The app immediately identifies your position on a map and shows the location of all Uber drivers in that area. You then receive a message from the car that has accepted your booking and an ETA. You can actually track the car’s movement on the map toward the pickup point, so that you know exactly when it will arrive.

Uber also offers users a choice of car types in a tiered system which includes luxury car and SUV options, with an increased rate on those options.

Payment is smooth and simple
When you register with Uber you provide credit card details and when you book a ride the time and distance of your journey is tracked and the relevant cost deducted from your card. You don’t need to interact with the driver at all on payment – it’s totally automated and cashless.

The amount for the trip is sent to your phone along with an invitation to rate the experience on a 1 to 5 star system, with an option to make comments. Interestingly, the driver also gets to rate the customer too. The thinking behind this is that both parties have an incentive to achieve a good rating, so that drivers can improve their chances of gaining work and passengers improve their chances of being offered a ride more readily!

How are the taxi industry and regulators responding?
As you can imagine, the well regulated taxi industry is up in arms over the advent of Uber. They claim that the Uber drivers are not licensed as taxi drivers and so are not subject to the same safety and suitability checks. They say this puts liability in question in the event of an incident. Uber has countered this by claiming that drivers are subject to criminal and driving history checks and are required to carry comprehensive and third party insurance. Uber also state that they hold public liability insurance on their drivers too.

While Uber is not breaking any laws in operating its business in Australia, the drivers are at risk of fines if they are caught providing the service because they are technically not licenced to transport fare paying passengers. To date, this has not deterred many drivers from continuing to offer the services and it continues to grow in popularity.

So is there any downside to using Uber?
The Uber offering has a lot of appeal for those frustrated by taxi experiences, but there are some important issues to be aware of. Cost-wise, Uber normally works out a bit cheaper than a taxi, but unlike taxis the Uber rate is variable based on demand at the time of booking. For example, if you are caught in a public transport breakdown in the city the rate per kilometre with Uber is likely to escalate markedly because there will be several other people in your vicinity who are booking at the same time. Taxis on the other hand offer the same fare structure regardless of demand.

Geographical coverage is another limitation, as Uber currently only operates in major cities and only covers a limited area within those cities – usually centred on the CBD. In Sydney, for example, Uber only covers the city centre, inner west suburbs and eastern suburbs, leaving the majority of the city, including the vast northern and western suburbs unserviced.

The safety and security aspect is another area that is called into question by the pro-taxi side of the argument. While the driver/passenger rating system and the criminal and driving checks give some level of confidence to users, critics claim anecdotal evidence of passengers being harassed or property left in an Uber car not being returned. On the other hand, cab drivers have also been known to get up to no good too, so it is really up to passengers to use common sense and discretion for either method.

Will Uber survive?
While the business continues to thrive across the world and it appears to be a victory for the liberating effects of new technology, Uber continues to be under assault from regulators and taxi industry bodies, which casts some doubt over its long term future. Balancing that is the undoubted popularity and consumer sentiment that is behind it. This together with the backing of corporate giants like Google suggests that perhaps Uber may be around for some time to come.

Image credit: ABC