The onset of Uber is interesting and a lot of friends have adopted it and swear by it! They like it because cars turn up promptly, the cars are nicer and it is easier to use… It sounds great and gives you more options to get around in a decent vehicle with good service.
My immediate thought is that taxi regulations and compliance is a lot greater than Uber. Therefore we do not have a level playing field in this market, with some market participants (taxi’s) being handicapped in this market! Could be a reason why Uber participants can afford nicer cars if they do not have to pay for taxi plates (about $400k) and comply with other regulations.
The poor old taxi’s industry is getting squeezed everywhere! Not only do they have to directly compete against Uber they also do not get any political favours; there was little public empathy for taxi’s when the Government started leasing plates directly to operators to potentially flood the market with supply and adversely affect businesses in the industry.
Some Thoughts:
- With more people living inner city and vehicle ownership declining (especially in under 30’s) there would appear to be a case for demand increasing. There could be enough work for Uber and taxis.
- Taxi Radio Services business will decline or evolve as people move to phone applications to book transport directly or a related way.
- Taxis fares can decrease for the benefit of all! Players in the industry think that a small reduction (5-10%) will increase demand and revenue! Customers would be more likely to take taxis, as the price now is a little high for many. Less taxi’s sitting idol is good for everyone. The increased business would offset the reduced prices.
- Credit card charges by taxis are down to 5% soon they will get down to 0-3% where they should have always been ;-).