Wednesday, September 10, 2014

Uber being unfair to existing transporation companies?



If you aren't aware what Uber is, it's a ride sharing app that helps people find cheaper ways of transport, rather than relying on taxi companies. You can ride share, volunteer your car and work part time, and things like that, but is it unfair to currently existing companies due to its competitive price?


Uber has been taking the world by storm ever since it started its company back in 2009, and its growth has been huge because instead of spending maybe $35 to go to LAX from somewhere in Los Angeles via taxi, an UberX car can take the same person for around $10-$15. It's a huge price cut, and corporations are suffering because of it. And how are they trying to combat this? By enforcing regulation.

Around the world, different countries are trying to prevent the spread of Uber primarily due to not having the correct permits to operate as a business.

Here's the general gist of what's happened so far:

  • Germany: Banned due to not possessing the proper permits
  • Spain: Being contested by drivers, because the service is unregulated and private.
  • India: Uber is apparently violating foreign-exchange laws.
  • Brazil: Local government of Sao Paulo is pushing for the suspension of the service.
  • Vancouver: Claims that the service is illegal due to the unregulated taxi meter.
  • United States: Numerous cease and desist orders are being given out.
However, Linkedin featured an excellent article on this topic, making a point that laws are usually ruled in favor of stabilization. However, in the long run, technologies that leverage the 6 D's will win. And it so happens that Uber fulfills all of the 6D's.

Model:
  • Digitized Uber digitized the user experience by making its service via a smartphone app. Everything is automatic, the taxi calling, the payments, the fare split, etc.
  • Deceptive to Disruptive: The company is at that stage where it's impossible to predict the future, but once we move into the automated vehicle stage, it's sure to take over the competition easily.
  • Dematerialized It's easier to get a car now because it's so available. Instead of driving to places, people could use Uber instead
  • Demonetized The annoying fees are gone, and tipping is eliminated (kind of)
  • Democratized It's cheap, and available. A lot of people like cheap and available transportation.
Personally, I feel like Uber is only attracting so much legal attention because of how much of a threat it poses to currently existing models of transit. If Uber survives this flurry of law suits, transportation options will be forced to comply with competition. It's just like internet service providers, they always say that their service is the fastest they can provide until someone else pops up. Then your internet magically becomes faster. Except in this case, transportation may just magically become cheaper.

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