Companies

May 19, 2015

How Uber rolled the taxi lobby and won the world

Uber is a mega-success because it is such a snazzy app, right? Wrong, writes economist and journalist Jason Murphy.

The rise of Uber is a lesson in the way power is wielded in our society. Uber, for anyone living under a rock, is a wildly successful mobile application linking people who want to travel to a nearby car and driver. Think of it as a taxi service without taxis. Anyone with a newish car can become an Uber driver. People are launching apps that are “like Uber, but for …” every few moments. And those eager entrepreneurs hope they’ll make a billion dollars, too. They won’t.

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4 comments

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4 thoughts on “How Uber rolled the taxi lobby and won the world

  1. old greybeard

    I would like to know this. In NSW you pay a rate of third party insurance based on what your vehicle does. Now I’ll bet Uber drivers have private insurance as private passenger vehicles. Since the vehicle is let out for hire, this would be illegal. If you have an accident in an Uber vehicle and are injured, I would think you have NO chance of a compensation because you would not be covered. Any ideas?

  2. drsmithy

    What Uber did was demonstrate it’s easy to win if you’re prepared to encourage others to break the law and then reap the rewards of their risk-taking.

    The taxi industry is a comically transparent rent-seeker desperately in need of competitive reform, and Cabcharge is a monstrosity that should be put down, but Uber is also run by people who think the law shouldn’t apply to them and is creating a market that must have some core regulation around insurance, driver accreditation and safety standards.

    If a taxi plate cost a few thousand dollars, rather than hundreds of thousands (if not millions), and anyone capable of passing a few basic standards could get one, then Uber’s value proposition would look a lot different.

  3. Graham R

    Like practically every article written by a shiny-obsessed press, this article appears to exist for no other reason than to grant Uber even more of the precious “oxygen of publicity” it so craves.

    Murphy states that Uber is “probably illegal.” Probably? Try definitely illegal in every Australian jurisdiction. Pretending that there is some ambiguity on this is the usual display of pro-Uber bias.

    Like practically every other press article on the subject Murphy fails to distinguish between the few (very few) big players in the taxi industry and the taxi drivers themselves.

    Wallowing in something like $10.00 an hour average lucre, taxi drivers now have to compete with a totally illegal competitor who is untroubled by the expensive and onerous accreditation conditions imposed upon taxi drivers by State jurisdictions. Driving a legal taxi at present is like playing football on Mt Everest – the ground is slightly unlevel.

    Sooner or later State regulatory authorities will catch up with Uber’s high-wire act of blatant illegality and force them to acknowledge that they are just another taxi company, to be regulated as such.

    When this happens the public will find Uber’s fare structure very similar to that of taxis now. There is simply a base minimum of costs in supplying a fully-insured, fully compliant, 24/7 on-demand public transport service.

    I see today the ATO have finally come out and declared Uber cars to be taxis. From August 1st Princess Uber must remit GST quarterly and pay income tax – just as real taxi drivers do. So sad.

  4. drsmithy

    Murphy states that Uber is “probably illegal.” Probably? Try definitely illegal in every Australian jurisdiction. Pretending that there is some ambiguity on this is the usual display of pro-Uber bias.

    I am far from “pro-Uber”, but it is a struggle to see what law(s) they are breaking.

    People who drive for Uber are a different matter.

    Wallowing in something like $10.00 an hour average lucre, taxi drivers now have to compete with a totally illegal competitor who is untroubled by the expensive and onerous accreditation conditions imposed upon taxi drivers by State jurisdictions.

    Unless a lot has changed, getting a driver accreditation is neither particularly onorous nor particularly expensive.

    Taxis are expensive (even though drivers earn bugger all) because taxi plates are expensive (many hundreds of thousands). Taxi plates are expensive because their supply is strictly rationed by Government.

    There is simply a base minimum of costs in supplying a fully-insured, fully compliant, 24/7 on-demand public transport service.

    Yes, and it’s a lot less than taxi plates currently cost.

    Compare them to limo plates for example. Around an order of magnitude less.

    I see today the ATO have finally come out and declared Uber cars to be taxis. From August 1st Princess Uber must remit GST quarterly and pay income tax – just as real taxi drivers do. So sad.

    You seem to be conflating Uber, with Uber drivers. They are very different things.

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