Normally, I keep my articles on the topics of internet marketing, but because we at Customwave have so many taxi and airport transportation clients, I felt that it’s relevant to write about Uber.
Right now, Uber is severely hurting the taxi industry. Why?
Because of the way Uber hires independent contractors as drivers, they don’t have to pay for the same insurance, permits and other business costs that virtually all taxi companies pay for.
Some people have said that Uber’s rise has come about because of superior technology and the ease of mobile payments, but at the end of the day (and especially in this economy), it comes down to price.
With lower costs, Uber’s prices under cut the other taxi companies.
And Uber’s background checks on the drivers they work with is questionable too. The San Francisco Chronicle details a couple incidents that have happened and how the district attorneys of San Francisco and Los Angeles are stepping in for a joint investigation.
To make matters even worse, CNN did a story on how Uber allegedly has hired other independent contractors to sabotage competitors similar to them. CNN reports that these contractors make calls to rival airport transportation companies and cancel them at the last minute. CNN’s numbers say this has been done at least 5,600 times.
My message to taxi companies is hang in there. Uber is not going to be able to get away with what they’re doing forever.
The government is going to have to step in, but not to save the taxi industry. They’re going to step in because if Uber continues to get away with not paying for insurance, permits and other stuff, what’s stopping all the other taxi companies from operating the same way?
That’s why Uber eventually will be forced to play by the rules everyone else does.