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Sunday, 19 June 2016





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Uber: Revolutionary ride-sharing goes places

If there is one hot word in the transport industry right now, it is Uber, the revolutionary ride sharing service that operates virtually all over the world including Sri Lanka, where the first customer was cricket legend Kumar Sangakkara. As of May 28, this year, the service is available in over 66 countries and 449 cities worldwide, according to Uber.

Uber and its nearest competitor Lyft have brought a new dimension to the personal transport industry, one which experts say will eventually morph into on-demand driverless cars that can take you anywhere in demand.

Uber was founded as 'UberCab' by Travis Kalanick and Garrett Camp in 2009 and the smartphone app was released the following June. Beginning in 2012, Uber expanded internationally. In 2014, it experimented with carpooling features and made many other updates. Most, if not all, Uber drivers use their own cars and some have questioned this practice from a safety perspective.

Investment from GM

Uber, headquartered in San Francisco, California, recently received a US$ 500 million investment from General Motors (GM), as car manufacturers and even tech firms such as Apple (which recently invested US$ 1 billion in Chinese road sharing service Didi) scramble to carve a slice of the future market for fully autonomous electric or hydrogen powered cars.

(Getty Images) Peter Faris, CEO of Szabo Faris LLC Transportation Solutions, stands in front of one of his vehicles while holding a smart phone with an app that orders up his sedan service February, 2013 in Washington, DC.

The carmakers believe that individual car ownership will dwindle drastically if firms such as Uber and Lyft deploy on-demand driverless cars and they want to be ready with those cars. Uber has announced collaboration with Carnegie Mellon to establish the Uber Advanced Technologies Center, a new facility to support research in the development of self-driving vehicles. In fact, Uber is actually recognized a technology company, not a transport company per se. Ride-sharing seems to be fast gaining ground at the expense of traditional taxi services. In fact, there have been huge demonstrations by taxi operators and drivers against Uber in many world capitals. Taxi unions, Governments and others have filed lawsuits against Uber for what they call "unfair trade practices".

A French court last week fined Uber Technologies 800,000 euro ($907,000) for running "an illegal taxi service" with non-professional drivers and slapped smaller fines on two of its executives in the first such criminal case in Europe. Uber has been taken off the road in some cities as a result of litigation and it (along with rival Lyft) has left some cities such as Austin, Texas on its own.

In the first quarter of 2016, services such as Uber and Lyft accounted for 46% of business 'ground transportation' trips in North America, (the biggest market) according to Certify, an expense-management firm. That compares with 40% for car-hire and 14% for taxis.

Biggest market

The share of business trips taken by taxi in America has dropped by 23 percentage points over the past two years. Within the ride-sharing sector, Uber dominates. According to the Economist, Uber has a 69% market share of business trips and Lyft has 4%.

Lyft had an advantage over Uber in one aspect - the ability to book cars in advance, a service the firm unveiled earlier this year. With Uber, on the other hand, clients had to book a ride as and when they want it.

Uber announced last week that it will follow Lyft's example and allow riders to book cars between 30 minutes and 30 days in advance. "All things being equal, that development will sound the death knell for taxis; expect cabs' share of the business market to diminish to almost nothing in the coming years. That will leave only one battle worth watching: that between Uber and Lyft," reports the Economist.

Uber's modus operandi is really simple. The user installs a smartphone app, which shows nearby Uber cars. When the user indicates he or she needs a nearby car, just one touch brings the relevant car to the doorstep. Uber offers luxury and cheap options under names such as UberX, UberGo and UberPop. It also has a restaurant delivery service in some countries called UberEATS. Uber has just started a helicopter service in congested Sao Paulo, Brazil, called Ubercopter.

Uber is also experimenting with a retro service: a telephone dispatch system that would allow people without smartphones to call a hotline and order an Uber ride, according to a transit official in Pinellas County, Florida, USA.


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