Unless you’ve been living under a rock for the last three years, you might have noticed that there’s a battle going on in the taxi and private hire industry. On the one side you have licensed passenger transport providers, such as limousine and chauffeur companies, taxi firms, minicab and livery operators. On the other are P2P taxi apps, which cut out the middle man. These have raised astronomical amounts of investment; UBER, Lyft, Easy Taxi, Hailo, Gett… the list goes on. Each of them offer an on-demand service with sleek user experience and simple payment – probably why they’re so highly adopted.
Taxi Apps Takeover
Of course, not all of these taxi apps can be lumped into the same category, just as different types of transport providers each have their own benefits. Let’s break it down and see where they stand with traditional transport fleets, with Uber as our main example.
By far the biggest player of the private driver apps, Uber have raised around $1.5 billion to date, with a whopping valuation of $18 billion. They claim to be adding 20,000 new drivers per month around the world and are operating in 45 countries (so far).
An interesting piece of information is that in 2012, the total addressable market in San Francisco was reported to be $120 million. But in 2014, Uber have already made $400 million in San Francisco only! That means that their winning combination of easy usability, optimal user experience and fast, professional service has increased the total market size almost x4 in just 2 years. Impressive.
So, why such a backlash? Uber have full support of the tech world’s early adopters and are backed by massive names like Google. But many argue that Uber have not played fairly; their blatant disregard for local regulations in private hire transport seriously upsets those who have been playing by the rules for decades past.
One example is in New York. Here, taxi drivers must have commercial insurance, undergo drug tests and pay up to $1,000,000 for the medallion required to drive a taxi. They also need a special license. The only requirement for Uber drivers is a nice car and a clean driver’s license. On the one hand, this has created thousands of new jobs for those who had previously struggled to make ends meet. On the other, many professional, licensed drivers have lost their jobs, since work has dried up with the new bounty of available drivers on the streets.
Despite making the news headlines daily, Uber do not seem to have any qualms about upsetting local transport authorities; they have been challenged with countless lawsuits, sometimes resulting in a complete ban. In the last week, Germany declared their operations illegal and completely banned Uber drivers from the country. For Uber, this is just a slight bump in the road.
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