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Friday, October 16, 2015

The Uber Disruption


I had my first experience with Uber last month in New York. I was visiting my daughter at her apartment, and we were headed to my hotel, but the rain was pouring down. Not only would we get soaked while walking a couple of blocks to a street where we could hail a cab, it wasn't very likely we'd find an empty one in that weather.

So my daughter pulled out her phone, opened the Uber app, and requested a ride. Within four minutes, the driver was outside her apartment building. We knew when he was there because we could see his car as it approached on the map built into the app, which also gave us his name and license plate number. We went downstairs, hopped in, and headed uptown. At my hotel, he pulled to the curb, tapped the screen on his phone to complete his end of the transaction, while my daughter did the same on hers. Payment was automatic through the credit card she'd registered with her account.

Not only was it easy, we were also a lot drier.

Last weekend in Las Vegas, my brother-in-law and I used Uber to get to a very good Italian restaurant off the strip (Panevino). We would usually have taken a cab from the taxi stand in front of our hotel, but there was a very long line of people waiting ahead of us. So I opened the Uber app and less than four minutes later, a driver named Jeremy appeared in his Lexus and pulled up to the designated spot Bellagio has set aside for Uber and Lyft.

We got in an asked Jeremy about his experience as an Uber driver. He told us that the service has only been available in Vegas for a few weeks, and so many people have signed up as drivers that there isn't enough work to go around, but those numbers should shrink over time through attrition and when more people become aware that they can use Uber.

The other problem he mentioned is that Clark County will not allow Uber drivers to pick up or drop off at McCarran Airport. That privilege is reserved for taxis, which charge passengers a $2 fee for each trip, money that then goes to the county. If an Uber driver is caught dropping a passenger off, they can be fined $100. Some of the drivers won't risk it, but one of ours said he just tells the passenger to sit in the front seat and, upon arrival, act like they've just gotten a lift from a friend. If I were a betting man, I'd wager that Uber will eventually work out a system that charges the customer that same fee automatically and passes it along to the county.

It's all about the money, which explains why cab companies are fighting Uber tooth and nail. It is disrupting business just like Netflix did for Blockbuster and Amazon did for Borders. But as more cities lose the fight to keep Uber out, and more customers want the services it offers, there won't be any way to stop it. Ironically, Jeremy told us that he knows a couple of cabbies who, after their shifts, then go out in their own cars and make pick-ups as Uber contractors.

After dinner, there were no cabs waiting outside Panevino. Sure, we could have Googled a local taxi company and called to arrange a pickup, but with the Uber app, we had a return driver right there in 3 minutes. We used Uber again the next night after having dinner in Chinatown. Once again, there were no cabs nearby, but within 4 minutes, a man named Jongsu picked us up in his Hyundai and took us back to the hotel. Since we had taken a regular cab there, we compared the fares and found them roughly equivalent.

I like the details Uber provides when you use the app. It was refreshing to know each driver's name and license plate number, which minimized any concerns I'd had beforehand about the security of getting into a stranger's car -- that's more information than I usually have about a cabbie. All three drivers told us they'd had to undergo a background check and a vehicle inspection, both of which were paid for by Uber.

There's also the crowd-sourced ratings of both drivers and riders, so each party knows whether the person they're going to interact with has been appreciated by other users (on each trip, we gave each driver the top rating, five stars, and they did the same for us). One of the drivers told us that, if you rate an Uber contractor with three stars or less, the app will remember that and never assign that driver to pick you up again. And if you see that the driver coming to pick you up is low-rated, you just cancel that ride and get someone with more stars.

So, will I use Uber in St. Louis, where it also debuted recently? Unlikely, because I live in suburbia and have my own car to get around. I doubt I've taken a cab more than a half-dozen times in the 16 years I've lived here, and that was usually from the airport when my wife couldn't pick me up. But if I were anywhere else, especially on vacation without easily-accessible transportation -- or if I drank and needed a designated driver -- I wouldn't hesitate to tap the Uber app.