Is Uber The End Of Personal Car Ownership?

This is Part One of a two-part coverage on Uber, the ride-sharing application that is fast gaining popularity across the world.

Europe-wide demonstration by licensed taxi drivers last week has given the new Uber taxi app an unparalleled and perhaps unprecedented boost to its coverage and future status as the world’s taxi service. This comes hot on the heels of news that the investors, chiefly Google and Goldman Sachs, value the start-up (or was that up-start?) at a cool 17 billion dollars!

Uber has been controversial from the start as a brief glance at its Wikipedia entry will tell you. They have been widely accused of flouting laws, flouting safety standards, providing lacklustre service, price gouging customers and, not least, threatening the livelihoods of existing licensed taxi drivers by evading current regulations. Of course, with the job issue, you can easily argue that taxi associations are simply trying to protect a lucrative trade that they have enjoyed all these years at the expense the poor urbanites.

Uber is said to be poised to transform urban transportation in much the same way that the likes of Amazon, E-Bay and perhaps Alibaba transformed shopping, by using user-friendly software and mountains of data to completely reshape the existing market; hence, ultimately making transportation for us urbanites cheaper, more flexible and more accessible across the income groups.

In fact, Uber is being touted by many to have the ability to reduce car ownership, the dream of many of those involved in urban transportation planning. Uber argue that in established markets, such as its home-base in San Francisco, it is arguably cheaper than owning your own car and up to 30% cheaper than taking a regular and regulated taxi, although there are complaints and occasional fights over the peak time “surge” pricing rules.

The debate over urban car ownership should not be lost on Londoners where an urban garage recently was put on auction for a whopping GBP375,000. Therefore, if the likes of Uber, and it is worth mentioning that they are not the only service, do succeed in persuading urbanites to rethink their attitude towards personal ownership of cars, then people will start to view cars as a service provider and not a possession.

Car-sharing schemes such as Zipcar and bike-sharing service cooperate in London have already led to a significant reduction in net car ownership, according to a report authored by Susan Shaheen of the University of California. She said, ‘I have been studying this for about 17 years and what we are seeing now is a ubiquity of mobile device that is really altering this industry.’ And now in plain English - smartphones are making car and bike-sharing schemes easy to operate.

Many argue that we should be investing more, much more in fact, on mass transit schemes such as buses and subway systems. The trouble with these, though, is that they simply are not flexible enough. In the USA, the usage of taxis is seen not as competitor to these schemes but an augmentation with, perhaps perversely, most taxi rides being taken by the lower income groups and most trips being multi-model, combining more than one type of transportation.

In fact, Dr King of Columbia University has coined a new phrase - Car-Lite - meaning that instead of having more than one car per driver in a household, the drivers make do with one. Dr King added, ‘The one-way travel of taxis allows people to use transit, share-rides and otherwise travel without cars. In this way, the taxi acts as a complement to those other modes and help to discourage car ownership and use.' The use of Uber and other like services will increase taxi efficiency as the smart technology will ensure that they are occupied more of the time, and greater availability should reduce prices. However, in the land of the Uber aka San Francisco, a recent survey found that 25% of the city’s population rated the local service as terrible. Perhaps, though, we shouldn’t go so far as San Francisco to look at a successful taxi model. Why not take a look at the one operating in places like Singapore that has used smartphones and locational software for years to marry available taxis with customers looking for a ride.

Read Part Two here.

image: Uber