They will be successful in San Francisco, of that I have no doubt. From what I understand the taxi market there is horribly broken, Uber saw a gap in the market and leapt at it.
The mistake, IMO, is assuming that they will be able to replicate that in other cities. In NYC you can get a taxi 90% of the time by holding your hand up in a street corner. At peak times that's more difficult, but that's also when Uber has surge pricing. They will hold their own and take over the premium market from various non-descript livery car companies - but only the premium market. They won't take over the taxi market as a whole. Much the same applies to London.
Also, much of their current success is based upon how heavily regulated and backwards taxi authorities are. For example, in NYC taxi drivers are not able to use phones or navigation aids, and hailing by smartphone is in its infancy. But that won't be the case forever.
So yes, they deserve a good valuation. But, to me, there are still a lot of questions about whether they will expand to fit this valuation.
You can get a cab in Manhattan, and maybe Brooklyn, 90% of the time. But, if you head to the Bronx (where I live), it's considerably more difficult. I can't really speak for Queens or Staten Island.
Up until the beginning of the year, 90% of the time you'll be hailing a gypsy cab. The only time you'd get a yellow when leaving the BX was at shift change which is around 5pm/5am for a lot of them. Not that there's anything wrong with a gypsy cab, but you're not supposed to hail them, which ties into a lot of the problems Uber appears to be facing in NYC.
I will say a lot has changed with the introduction of the Boro cabs (green cabs). I don't remember exactly when they were introduced, but getting a cab is considerably easier now.
So, while I agree with what you are saying, I think it's a little Manhattan-centric.
Up until the beginning of the year, 90% of the time you'll be hailing a gypsy cab. [...] I will say a lot has changed with the introduction of the Boro cabs (green cabs).
Agreed - and that was sort of my point about Uber taking advantage of regulation, though I didn't phrase it well. The artificial scarcity of taxi medallions meant that demand outstripped supply outside of Manhattan. Now they're finally, slowly, fixing that.
The thing is that uber is priced such that it is only attractive to people who live where it's not needed, i.e. Manhattan below 96th street, parts of western Brooklyn, and one or two hot spots elsewhere.
Even cabs (green and yellow use the same fare structure) are priced way out of line with what the gypsy cabs were negotiating in many parts of the outer boros. UberX is another 30+% again on top of that.
It looks to me like uber's biggest market in NYC is not people who live in outer boros and would otherwise have hailed a green or gypsy cab but people who would otherwise have taken a pre-arranged black car because hailing a cab is for the proles. That market isn't nothing, but it's far from the whole thing.
The average wait time in NYC is between 5 and 9 minutes depending on time of day. But many people would say it feels worse than that at peak times (and it likely is).
People finding cabs on 5th avenue at 6pm know there are no cabs to be had. You can't just raise your hand. It could take 15 to 20 minutes to find a cab.
So suggesting that you can get a cab 90% in NYC is a statement of fact, but it's not actually true.
Seems to me that a simple solution would be people wanting a taxi bidding up the price. So if a taxi is two minutes from completing its current fare, people can start bidding on getting a taxi, and the moment this taxi is free, whoever has the highest bid will win it.
There really are no other workable solutions. The other solution is to get more taxis on the roads, but that would just mean that a lot of taxis would be idle at non-peak hours, and that -- instead of peak hour-taxis being expensive -- the price of taxis in general would rise, because each taxi isn't getting as many fares.
> So suggesting that you can get a cab 90% in NYC is a statement of fact, but it's not actually true.
I would have to disagree. I work near the Empire State building and have taken cabs home after work (6pm) plenty of times and have never had to wait more than two red lights to get a cab (lights going N/S take about 45s so that's around 2-3 minutes).
The times you have to worry about is Friday/Saturday night if it is raining. You might have to wait a few minutes then if you want a yellow cab. Black cabs are almost always instantly available but they are a little pricier so I don't count them.
One of the top apps in Vancouver is from the yellow cab taxi company and it basically replicates Über's functionality except there is a huge existing fleet behind it and the prices are about half what Über charged before the regulators shut them down. Re-creating the über app is not too difficult, especially since most taxi companies already have sophisticated backend dispatching systems that apps can tie into. I'm guessing that the firms that sell this dispatching software got woken up by über and are offering white labeled apps to their taxi company customers. This will make it much harder for üÜber to break into new markets.
Now car2go, there's the future of cars on call. Especially in a city like Vancouver where you can nearly always find one within a couple of blocks.
The mistake, IMO, is assuming that they will be able to replicate that in other cities.
One reason is that a good part of their claimed novelty is being able to hail a cab via mobile-phone app (as well as get pricing and such), which is not actually novel in many markets. In much of Europe the existing taxi companies have that feature and it works just fine; it's not too hard to add it as an incremental improvement to the traditional radio taxi. I used the app from 'AAA Taxi' a bunch in Prague last week, and I don't see what Uber would offer above the existing functionality.
Not sure how that app works - but basically I don't have to deal with payment information (e.g. I don't need to carry cash), and I don't have to worry about tipping.
Both important to me, and I'd at least assume a few others. I absolutely hate the stress of having to deal with some angry cabbie and 5 minutes of BS because I dare use a credit card vs. pay cash.
Never heard of tipping for cabs. I don't think that's common in Europe. Some of the apps do let you pay via the app, though that is probably a minority feature still.
Uber is 30-40% cheaper than London cabs. Uber has rattled the cab-drivers so much that they're staging a protest next week to try to pressure cab regulators into blocking Uber's expansion.
The London black cab has a meter that prices the journey. Other taxis in London do not have a price meter.
Uber needs to obey the regulatory rules of the industry. Either they don't have a pricing meter (and thus journey price is agreed before hand) or they do have a price meter and all Uber drivers are regulated like any other black cab driver.
They can't ignore laws just because those laws are inconvenient to them.
"They can't ignore laws just because those laws are inconvenient to them."
I completely agree with you, but at the same time, for whatever reason companies (Uber / Airbnb) have been able to completely ignore rules & laws to the tune of tens of billions of dollars (in valuations).
It's almost "might makes right": ignore rules and grow as fast as possible, with the hope that you'll grow faster than the legal system can take you down. By the time the legal system could do anything, you're big enough to change the rules.
Big enough to change the rules, or big enough to absorb whatever fine they wreck you with. $1 billion in fines for making $10 billion you shouldn't've been able to make in the first place? Good deal!
Yep. The AirBNB folks engaged in flagrant spam, sending out fake unsolicited emails from fake identities, and refusing to remove anybody who wanted to stop receiving them.
But now Chesky is rich, so he gives away money and pretends that he's something other than an enormous fucking asshole.
Between Uber and AirBnB, and the large valuations they're getting despite being in flagrant violation of various local ordinances, it seems to be a gamble that they'll be able to lobby their way out of the problem, or expand into territories with no such legal framework.
Yes, Uber is cheaper - until it isn't, when it implements surge pricing. It's a very different model, which makes direct comparisons tricky.
The price of a London cab is regulated. Maybe that price is wrong. Uber can take advantage of it, but do you think the London taxi industry is really going to sit back and watch its market disappear without even trying to change price?
And the cab driver protests are more rooted in the fact that they had to spend a very long time learning 'The Knowledge' before being let out on the road, and that Uber has no such requirement. So, either it's necessary and they're letting Uber off the hook, or it isn't necessary and TfL has been lying to drivers.
So, I think it's more complex than just being "threatened by Uber".
Yeah, taking uber then would be stupid. There are plenty of yellow cabs within a few minutes walk from the starting location of that trip, and the trip itself would cost about $25 with a tip.
Satnav sucks in many cities, though, especially for POIs. When I visit NYC that's one of my bigger complaints about the taxi drivers: they have no idea where anything is, and it takes them forever to try to type things into their gadgets, often with mixed success. And still they always end up in the wrong lanes and end up swerving across traffic at the last minute, because they don't actually know where they're going or how the street layout works. IMO it's shameful that someone could be a taxi driver in a major city and not be able to navigate to prominent landmarks and neighborhoods. That's at least one problem you don't have in London, where the drivers give you confidence that they might have actually been to London before.
It's worth noting that all mini-cabs are 30-40% cheaper than London cabs, but it's a very fragmented industry with poor technology (Addison Lee has done a decent job). I would say 80% of my journeys in London used mini-cabs with the downside being that you had to wait 15-20 min longer (but in same cases much quicker) than black cabs.
> In NYC you can get a taxi 90% of the time by holding your hand up in a street corner.
Maybe you mean s/NYC/Manhattan/?
This is not true in much of the outer boroughs (and also in much of uptown Manhattan). In fact, in an attempt to address the problem, NYC created an entirely new class of cab that can only pick people up outside Manhattan.
Even finding a cab in NYC is a pain in the ass. If you're in Manhattan, cab drivers can deliberately discriminate against you if you want to travel to Brooklyn or Queens. The number of times I've had it happen to me makes me have zero sympathy about the idea of Lyft or Uber owning the NYC market. On top of that, Queens and Brooklyn are big, so it's improbable to flag a cab outside of very specific neighbourhoods.
Get in the cab, shut the door, tell them you're going to BK or Queens. Problem solved. If you act like a rube, you're gonna get hustled. I'd rather have that (and be able to call the city government and potentially have the person's livelihood terminated in the event of shenanigans) than 8x surge pricing because a middleman feels like it.
I live in Seattle and Uber is my preferred method of on-demand transportation, except for maybe rides to the airport where I might call a towncar service. It's cheaper than taking a Yellow Cab if you use UberX, and since I don't care about having a nicer ride, it works out great. No more waiting 30 minutes on Friday/Saturday nights and it's a huge improvement for after major events (even though surge pricing does sometimes lead me to select alternate means).
I'd really be interested to see how their revenue breaks down between larger cities with urban cores (SF, Seattle) and other areas that are more spread out (LA, etc.)
For years people said this about Uber in London but now the cabbies are protesting them because they're getting a lot of traction. It's important to remember that Uber is cheaper than cabs in almost all of the markets they're in. In SF they're more than 50% cheaper.
If you are in select parts of manhattan below 150th st, you can get a taxi very easily.
If you're in any of the other boroughs, you usually can't count on being able to hail a taxi unless you live on a main route to one of the manhattan bridges.
The mistake, IMO, is assuming that they will be able to replicate that in other cities. In NYC you can get a taxi 90% of the time by holding your hand up in a street corner. At peak times that's more difficult, but that's also when Uber has surge pricing. They will hold their own and take over the premium market from various non-descript livery car companies - but only the premium market. They won't take over the taxi market as a whole. Much the same applies to London.
Also, much of their current success is based upon how heavily regulated and backwards taxi authorities are. For example, in NYC taxi drivers are not able to use phones or navigation aids, and hailing by smartphone is in its infancy. But that won't be the case forever.
So yes, they deserve a good valuation. But, to me, there are still a lot of questions about whether they will expand to fit this valuation.