Is Uber a Threat to the Taxi Industry?

Updated on July 9, 2019
Donald Ngonyo profile image

Donald Ngonyo is Social Researcher working with government agencies to understand how technology affects the traditional economic system.

How Uber Is Changing Public Transport

The emergence of Uber has transformed the way people move within major cities across the world. It is worth noting that Uber is unlike conventional taxi services. Uber is described as a service that links commuters with available drivers. The passenger is able to call for a car using their phone and an Uber driver is connected with the passenger and rides him or her to the preferred destination. The payment for this transit system is processed electronically and there is no tip required from the customer.

Notably, the price is hiked whenever there is a higher demand for the service. Therefore, the affordability of Uber as a mode of transit varies greatly depending on the way different circumstances affect the supply and demand of these services. With these happenings, Uber is a threat to the traditional taxi industry because the Uber experience is exceptional (Hughes, 2014).

Understanding How the Uber System Works

In order to access Uber's services, a person is required to have a smartphone and the Uber app. Through a simple press of a button, an Uber driver will pick up the passenger at their location and drop them at their preferred destination. Uber seems much more convenient when compared to the traditional taxi system, in which passengers are only able to call for a cab from the street or by calling the central dispatch office when they want to be pickup up from their exact location.

The Uber system also beats the traditional taxi system because it is used globally and ensures that clients do not face language barriers when needing transport. For the case of the traditional taxi system, the client is also required to be detailed during the phone call when he or she wants to be picked from an exact location (Hughes, 2014).

The Convenience of Uber

There is no need for the customer to visit an ATM since the Uber system is able to charge his or her credit card. With a traditional taxi, a person is often required to possess cash. It is known that many conventional taxi companies do not accept credit cards, and the ones that do accept them usually have expensive surcharges. Therefore, Uber has an upper hand over the traditional taxis because it has created an automated and consistent platform for hassle-free booking of rides.

The global presence of Uber also makes it easy for individuals who travel to different parts of the world. Guests have a reliable platform to request transit services without experiencing language barriers or extra charges because of their foreign status (Hughes, 2014).

Minimal Operational Costs

It is also known that many taxi companies have numerous bureaucracies that give drivers headaches. Moreover, local authorities have regulations that hinder the freedom of traditional drivers' businesses. Uber offers these drivers an opportunity to minimize the cost of operating their business. This improves their income and makes the work more enjoyable (Gaskell, 2017).

Conclusion

Uber is a real threat to the traditional taxi industry because it poaches clients as well as drivers. This threat will continue to grow unless legislation is passed to change it, or if the traditional taxi operators offer services that rival the exceptional customer experience offered by Uber.

For the client, Uber is preferred over the traditional taxi because it offers a reliable and dependable taxi service. It is convenient because it gives people the opportunity to access transport from any point. Moreover, the convenience is enhanced by the ability to transact without cash. More drivers are signing up for Uber because of the flexibility it offers, unlike the traditional taxi system. With cashless payments, drivers do not need to have a sizable amount of cash that could attract robbers.

Drivers are also able to rate their clients, which cautions other drivers about rude and aggressive passengers. This is unlike the traditional taxi system, where drivers have no access to customer profiles and can be robbed or abused by passengers. Uber has made public transport convenient and seamless, bidding farewell to the conventional taxi system. Uber remains a big threat to traditional taxis and will remain so unless there are viable and competitive services that will rival the exceptional customer experience offered.

References

Gaskell, A. (2017). Study explores the impact of Uber on the taxi industry. Forbes. Retrieved from https://www.forbes.com/

Hughes, M. (2014). What is Uber and why is it threatening traditional taxi services? Make Use Of. Retrieved from https://www.makeuseof.com/tag/uber-threatening-traditional-taxi-services/

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    © 2019 Donald Ngonyo

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