Why The Public Likes Uber So Much

Posted on August 20, 2015 by - Also by this author

Mobile technology will never recede, and it will keep changing how ground transportation runs. For all the opposition and hysteria about Uber, there are even bigger reasons than venture capital and political connections for its runaway success.

Uber wouldn’t be such a giant unless the public really, really liked it. I’m seeing more articles that include comments from everyday riders about the increased access and mobility they enjoy, thanks to TNCs. You hear heartwarming anecdotes about seniors or physically challenged people who are less isolated, and younger riders avoiding the snares of drunken driving. The wildly popular TNCs meet an unsatisfied demand. It certainly begs the question, why was there such a convenience vacuum in the first place?

Whose fault was that? Fingers can only point to incumbent transportation and the governments that regulated them, with government deserving most of the blame for its complex, inconsistent, misapplied web of regulations. The demand and need were always there, as was the technology — all for the plucking by private and public players alike.

In one article, published Aug. 17 in the Weekly Standard magazine, a writer observes all the deficiencies of the D.C. Metro system while taking his family to a ball game. The clincher comes at the end: “Up above ground, in the clear air of the private sector, Uber is getting it done. Down in the tunnels of the public sector, you can’t understand a word that comes through the loudspeakers.”

Why put up with crowded, dirty subways with a subset of freakish passengers, down in some dark tube, when you can just get your own ride in what is most likely a reasonably clean car for a reasonable price?

We are seeing decades of pent up consumer frustrations with public transit, taxicabs and airport shuttles unleashed. The ability to summon a ride within minutes — just for you — gives the consumer a bigger sense of control. Control, choices, convenience — those are the service standards the public expects and should get in the 21st Century. Unfortunately, the traveling public is so thrilled and relieved with TNCs that they overlook or discount some common sense safety measures, which still must be remedied through fair regulation.

But “Do you have an app for that?” is now the new high bar for businesses that will survive. In the limousine industry, we are seeing survivors emerge: iCars and miRide, along with the operators who participate, being among the most noteworthy so far. (You heard about these solutions first @ LCT).  

It would be naïve to think the on-demand business component would ever disappear, whether the regulatory and legal challengers work in the TNCs’ favor or not. Even in a worst case scenario for TNCs — a sweeping labor ruling mandating employee status for all drivers — they could simply raise prices and adjust with their vast economies of scale. Most of their customers likely would put up with the higher prices for the continued convenience.

The most apt comparison is to fuel prices; most of us still drive and pay for gas at $4 per gallon as much as we do at $2 gallon. We eat the cost and/or cut back on other spending if we have to get to where we have to go. Consumers are quite resilient in putting up with higher prices for things they really crave: Concert tickets, iPhones, health club memberships, cosmetics, TV subscriptions, etc. TNC convenience would fall into that consumer column of “must have.”

In our upcoming September issue, I wrote an article about Reston Limousine, a 25-year-old operation in Northern Virginia, and asked their managers in detail about Uber. Their responses were not what I expected, contrary to the prevailing wailing we hear so often. Reston, which has not lost revenue to TNCs, sees Uber as a booster for chauffeured transportation overall. “We call it the Uber effect,” COO Tony Simon says. “It’s helped our business. Many people want more structured chauffeured transportation that is reliable, consistent, safe, and responsive on the customer service side.” Adds CEO Kristina Bouweiri: “Uber has made black cars a household name. It’s driven more business our way among those who have not liked Uber and want something better. None of the parents I know who use Reston for school transportation for their kids have gone over to Uber.”

So what if, just what if, ground transportation competitors get the still-possible outcome hoped for: TNCs regulated on par with taxis and/or limos, abiding by the same licensing requirements and insurance coverage amounts. All drivers are background checked at FBI-certified levels. In states that allow it, independent contract drivers are categorized no different than I/O chauffeurs. Everyone else is a W-2.

What then? Is your business ready? Got an app for that?

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