Uber Will Win Against Regular Taxi Services Because It Provides Better Service At A Lower Price Established taxi companies will fight against Uber. But eventually they will lose. Consumers have a right to efficient, low cost services

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WASHINGTON – I have never used Uber, the relatively new car hire service now available in America and in many other countries. However, based on many news accounts, I think that it is a very good, customer-friendly innovation.

Technology makes Uber possible

Uber is made possible by IT technologies. You register using your smart phone. This includes downloading the Uber proprietary software and registering a credit card that will be used for future payments. You can also use a regular mobile phoene and communicate via text messaging.

Once you are registered, when you need a ride, you request it through your phone. The system does the rest. It can determine where all drivers are at any given time, and dispatch to your location the one nearest to you. You do not need cash to pay. It is all done through its software. Your card is automatically charged. All this is quick, simple, efficient. And it costs less than a regular taxi.

Simple and reliable

The beauty of the system is that the whole “call-wait-request a cab-get confirmation-wait for arrival-ride-payment” process is extremely simplified, thanks to the software that links the service provider to the end users. And, of course, because of the simplification, on average, Uber costs less than a regular taxi ride.

Established taxi services fight to keep their monopolies

And here we see the clash. Established taxi companies and taxi drivers do not like this “disruptive technology” at all. Understandably, they see these Uber drivers as upstarts who are stealing their “protected” income. Hence their push to force public authorities to regulate Uber and its drivers out of existence. “They are not complying with this and that. They lack licences, permits, and blah, blah, blah”.

I realize all this. It is obvious that any established, regulated business that enjoys a monopoly and therefore a rent position, simply because it has no competitors, does not want newcomers who can undercut its monopoly. And so they fight it.

Losing battle

But I suspect that this is going to be a losing battle. In the end, public services exist in order to benefit the consumers, and not the providers. If there is indeed a more efficient, lower cost solution to offer the same service to the consumer, eventually it will win.

The established interests will oppose it. And, depending on how market-oriented regulators and public official are, it will be just  a matter of time before the old-fashioned, regulated monopolies will be dead.

The internet killed most travel agencies

Look, travel agencies used to get a cut for booking your airline tickets. Before the internet, this was almost like a tax they collected each time they booked a ticket, simply because the consumer had no choice. Now you can book and buy your own ticket on-line. The internet turned out to be a death sentence for many travel agencies.

Likewise, until not too long ago, if you wanted to send a package, you had to go to the Post Office. Today, you have plenty of choices: FedEx, UPS, DHL and more.

Consumers want a more efficient, lower cost service

Getting a vehicle when you want it, through a reliable service, on simple terms, and at a lower price is highly desirable. Established taxi companies and taxi drivers will fight against this new development that undercuts their protected business. But, sooner or later, they will lose this rear guard battle against this improved and lower cost service enabled by modern IT technologies.

If I were a taxi driver, I would start looking for a different occupation, or jump ship and sign up with Uber. Join the lower cost, more modern, and more efficient industry. Do not fight it.

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