Uber: The Transportation Game Changer
Today, in a never-ending swarm of paradigm shifts, the arrival of the car-hire service is changing how we view and use twenty-first century transportation.
Uber in a Nutshell
Most people heard about Uber before they knew of the sharing economy it represents. The car service seemed to arrive out of nowhere and addressed a very contemporary problem: while people still need to travel and get places, the desire to own and drive a car is waning. Empty-nesters are migrating to walkable cities, a driver’s license is no longer a rite of passage, and most agree that reducing America’s carbon footprint is a worthy goal. Millennials especially view car ownership as an option, not a must.
One of the biggest appeals of Uber is the ease of use: simply create an account on its website or app with your name, phone number, and credit card. Via the app or text, you can then request a driver, view their name and picture, the type of car, and ratings by other passengers. A car is sent to your location and your card is billed once you reach your destination.
The Big Bang, Uber Style
For an operation that’s becoming a well-studied business model, Uber began as anything but. Co-founder and CEO Travis Kalanick and Garrett Camp, entrepreneurs in their early thirties who found success in web start-ups, were attending the LeWeb conference in Paris in 2008. Over wine, the two tossed around ideas. At one point, Camp ranted about the inconvenience of taxis, especially in cities like San Francisco.
An idea formed to create a limo-esque service, splitting the cost of a driver, a Mercedes S Class, and a parking spot in a garage, all through an app. The idea clicked and had customer appeal. Moreover, the idea of a timeshare type of private transportation was fresh, and just the kind of challenge both men were looking for. Soon the idea morphed into a side project, with Camp working on the app. In January 2010, Uber launched its first test, with three cars operating south of midtown Manhattan.
Explosive Growth, Explosive Pushback
Unlike a majority of start-ups that run in the red for years, Uber hit the black fast. In 2015, just five years after its few car tests, the company was valued at approximately $40 billion. Thanks to lots of big-name investors jumping in early, it became available in almost sixty countries worldwide and expanded to urban areas and smaller cities like Madison, Wisconsin, and Waco, Texas.
Uber’s explosive growth has triggered tremendous pushback. Its most strident opponents are taxi and limousine services that license and control the industry. In New York and other cities, where cabs must have a medallion to legally operate, the financial stakes are especially high. Critics chide the company for putting taxis out of business and monopolizing the market. Another worry surrounds the investment of medallion owners. Some cities have successfully suppressed Uber because of local regulations on all car services. Many believe that this is the direction Uber is headed.
For Riders, Uber is a Win
Another plus is the variability in choosing the level of vehicle you want to pay for. Currently, Uber offers five types of ride:
Taxi: If you want a metered taxi, you can still use your Uber app instead of hailing one from the curb.
UberBlack: More expensive than UberX, UberBlack promises a high-end sedan.
SUV: For larger groups, Uber SUVs will accommodate up to six people.
Lux: Uber’s top-of-the-line vehicle option. Prestigious cars for those who want a luxurious ride.
Why Drive an Uber?
Most Uber drivers do not work full-time for the company and love the flexibility. Most are college students wanting to make extra cash on their free nights and retirees looking to supplement their incomes on a temporary basis. Uber accommodates that desire, letting them set their own work hours without a fixed schedule.
Uber and the Future
Whether Uber is leading the sharing economy, or simply a breakout success story, there’s no doubt that collaborative consumption is already expanding. Airbnb, VRBO (Vacation Rentals By Owner), EatWith (which offers a family dining experience), and DogVacay, (where dog lovers board your pooch in their homes) are among the newest and most popular.
Uber is continuing to evolve at break-neck speed. In April 2015, it was rumored Uber planned to expand to a merchant delivery service, delivering customer’s purchases from online stores. The expansion makes it a disruptive force that’s hard to match. By his own admission CEO Kalanick likes nothing better than a good brawl with the ancien régime.
1. How do I pay my driver?
When you create your online Uber account, there are three payment options: credit card, debit card, or digital wallet linked to your bank account.
2. What about tipping?
A ten-percent tip is built into the ride’s cost. However, this is below the fifteen percent considered standard for drivers.
3. Is Uber cheaper than a taxi?
Depends on your location. Some articles claim Uber is more expensive in certain cities like New York. However, based on our Big Apple experience, UberX is break-even if you add to the ten percent built-in tip, and less if you don’t.
4. Are there advantages beyond cost to using Uber?
Perhaps the biggest difference between Uber and traditional taxis is that, as with a car service, you can request a specific level of vehicle. Although cars vary from driver to driver, most passengers find private vehicles preferable to cabs. At the end of your drive, you can rate your driver. Likewise, the driver can also rate you.
5. Will the driver make stops along the way?
Passengers can pick up friends along the way, or run into a store for a quick errand. Most drivers are happy to accommodate for an extra fee, which driver and rider negotiate beforehand.
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