Uber is a new smartphone application is expected to revolutionize the taxi business. It is forming a major threat to traditional taxi. The Uber software allows users to ‘order’ a private car. It offers an easy way of connecting passengers with drivers willing to hire out their vehicles.
Uber originally began in San Francisco in 2009, with users able to book and reserve a car driven by a regular member of the public for journeys via text message or the smartphone app.
With the app, Uber users can track their booked car’s progress until it arrives at their chosen pick-up point, but the clever feature is that no money changes hands in person. The transaction is conducted electronically by the app and based on speed and time.
If the Uber car is travelling at more than 11mph, the fee is based on distance covered. However, if the car drops below 11mph—in traffic, for example—the charge for the journey is calculated on time taken.
The company already operates in over 35 cities, such as San Francisco, New York, Los Angeles, Paris, Berlin and London.
Initially, the concept was met with a warm welcome in urban areas with well-established taxi networks, such as New York. However, in its home city of San Francisco, Uber has struggled due to the relative lack of regulated taxicabs, while global growth has continued.
The company has faced some significant obstacles, however. Uber received a cease and desist order from the San Francisco Municipal Transportation Agency back in May 2011 after authorities claimed the firm was operating an unlicensed taxi service.
At the same time, the California Public Utilities Commission (CPUC) claimed Uber was running an “unlicensed limousine dispatch.”
Apparently, it is easy to see why these conclusions were drawn. However, the dispute was partly resolved earlier this year, with the CPUC creating a new category of services called ‘Transportation Network Companies’ covering Uber’s operations.
There is a lighter side to the technology, though. On 4th July weekend 2013, Uber offered a free helicopter service from New York City to the Hamptons as a ‘promotion’, while it also laid on ferry services to relieve load on the San Francisco Bay Area Rapid Transit system after an employee strike caused huge cues.
The firm has some very wealthy and experienced backers, including American financier David Bonderman.
Experts are claiming that Uber might turn out to be a more valuable entity than Facebook, with predictions that the firm’s value will reach over $100 billion (around £61 billion) in around five years.
