Saturday, December 18, 2010

Markets in Everything: Private Car Network

From the Uber website:

"Request a car by telling Uber where you are. Text us your address, or use our iPhone or Android apps to set your pickup location on a map. Uber will send the nearest driver to pick you up, and text message you an estimated arrival time. Cars usually arrive within 5-10 minutes.  Your licensed professional driver will park curbside in a sleek black car. Uber will text you again when the car arrives.  Hop in the car, tell the driver your destination and you'll be on your way."

It seems like a variation of Zipcar, since you register in advance with Uber, and your credit card on file gets charged automatically for each ride, and no cash is necessary.

Obviously, the taxi monopoly in some cities like San Francisco is not happy about the competition from Uber (formerly called UberCab), and they got the San Francisco Metro Transit Authority (SFMTA) and the Public Utilities Commission of California to issue a cease and desist order against the startup in October.

According to this report:

"Despite the cease-and-desist order, Uber CEO Ryan Graves says his company never shut down or stopped service, and has been working with the SFMTA to address each violation, beginning with the obvious company name change. In San Francisco, only permitted taxis can advertise themselves as taxis or cabs, including having those words in the company name. Hence the name change from UberCab to just Uber.

Since there's a 10-year waiting list to get one of those coveted taxi medallions in San Francisco, I can see why cab drivers would be threatened by the service and worried that it would take away potential revenue. While that remains to be seen, the technology has been a boon to another segment: livery drivers. Graves says that his application and platform has enabled private car companies to increase revenue, add more cars, and hire more drivers.

The chilly reception from start-up-friendly San Francisco local government was a good learning experience as Uber looks to expand next year to other cities, and is already eyeing New York City as its next potential target."

HT: Ryan S.


At 12/18/2010 2:51 PM, Anonymous Anonymous said...

San Francisco, startup friendly? Ha! San Francisco is one of the most business-unfriendly places you can be, which is saying a lot in business-unfriendly California.

At 12/18/2010 3:18 PM, Blogger Colin said...

I have been interested in this since Reason mentioned it in October. I hope that ultimately it could result in anyone registering as a de-facto taxi, and eliminating the regulation of this activity. Maybe we can get the environmentalists on board, as having this service would seem to be an efficiency gain by ensuring fewer cars with only one passenger.

At 12/18/2010 3:30 PM, Blogger Buddy R Pacifico said...

Fare is about 1.5x a cab but includes tip. Almost completely stellar reviews at Yelp.

At 12/18/2010 4:56 PM, Blogger Benjamin Cole said...

This is a great idea--I hope regular folk start ride-sharing through this mechanism--why use a service?

It is crazy every day when I commute--I know thousands of people are going roughly the same direction.

At 12/18/2010 5:33 PM, Anonymous Anonymous said...

It's not as simple as just ride-sharing, Benjie, what if one of those people tends to eat in the car and makes a mess? There's a lot of potential for the internet to greatly streamline a whole host of mundane services like this, but it's not as simple as just notifications: there are other layers on top, like being able to avoid people you don't want to deal with. This is why most people drive alone. It's not just the inconvenience of scheduling with everyone else, it's also the potential issues of a shared space like a bus or a shared car, and the annoying people you may have to deal with.

At 12/18/2010 9:46 PM, Blogger Benjamin Cole said...

Nobody could be as annoying as my wife.

At 12/19/2010 8:41 AM, Blogger cluemeister said...

I'm so stupid! It never occurred to me to issue a cease and desist order against my competitors.

At 12/19/2010 9:27 AM, Blogger bob wright said...

So at a time of almost 10% unemployment, the San Francisco job prevention department (AKA City Council) does its best to keep more people unemployed.


Is this the Democratic Party's economic model - trickle up poverty?

At 12/19/2010 9:45 AM, Blogger bob wright said...

I'm confused.

Is the Democrat party anti-monopoly or not?

When it comes to IBM or Microsoft, they are the first in line with pitchforks, torches, and anti-trust suits decrying the evils of supposed big bad corporate monopolists.

Yet when it comes to:

K-12 education
Taxi Service Medallions
Health Care
Local cable licenses

the democratic party is pro-monopoly.

This contradiction appears schizophrenic.

At 12/19/2010 6:18 PM, Blogger Benjamin Cole said...

Is there any way to introduce competition to our national defense services? Or should we sunset, and start over?


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