There is very poor reporting about UBER in the media. There is very little accurate description of the services UBER offers and how they differ, UBER offers three classes of service:
UBER Black Car;
UBER Taxi; and
I am unfamiliar with UBER Black Car.
UBER Taxi is a close to legal service – but not quite. HAILO, when operating in Toronto had a Toronto dispatch license. It was 100% legal. UBER Taxi on the other hand – in its arrogance – did not get a dispatch license. It claims to be different and does not need a license. However, it is difficult to see what is different from conventional dispatchers – including those that use apps – and UBER
UBER X is an illegal service that puts passengers and drivers at risk. Let’s deal with the drivers first.
UBER X drivers are told they only need to carry personal insurance. If they have an accident while acting as a commercial carrier they will not be covered. This is not open to debate. Personal insurance does not cover this type of activity. In the event of an accident a driver has two choices – defraud the insurance company by making an inaccurate claim or pay for the accident. UBER claims to have an umbrella policy, but there is no evidence that every driver is covered.
UBER X drivers also get paid at about 50-60% of the rate paid to Taxi Drivers. This is a very low wage, given the cost of cars, depreciation, gas and repairs. It is dubious that these drivers are making any profit at all – let alone a living wage. Essentially what they are doing is monetising their depreciation and future repair expenses and turning it into today’s spending cash. There are, of course, no benefits or pension. This does not lead to a great society. It leads to poverty.
UBER X passengers are unprotected by the personal insurance supplied by UBER X drivers. If the true nature of the arrangement is known to the insurance company, coverage will be very dicey. Once again, we do not have any assurances that UBERs proported $5mm insurance policy will actually pay out in the case of injury to a passenger.
UBER X effect on legitimate cab drivers: Cab drivers carry proper commercial insurance and pay top dollar for their licenses or to rent a car from another license holder. The vast majority are in the latter category. These drivers are amongst the lowest paid of our society. Just like UBER X drivers they have no benefits or pension. It is a difficult career with low income and few prospects. However, they operate in a regulated industry with many safeties built in. The competition from the illegal UBER X is hurting the incomes of these hard working poorly paid individuals.
Who gets rich from UBER X. It appears that it is a few rude arrogant, disrespectful, lawbreaker 20 somethings in California. Everyone else loses.
UBER X is not a “disruptive technology”. The concept of legally dispatching legitimate cabs by app and allowing in app payment is an enhancement of the legacy cab service – as shown by the fully legal HAILO service. The “disruption” that UBER offers is a complete and total disregard and disrespect for the law. It is nothing less than selfish arrogance.