It’s over for the taxi industry

It’s over for the taxi industry

0 Reads  By: Gabriela Motroc

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The taxi industry is suffering from an identity problem. This dead man walking is fighting off Uber more ardently than ever as it fails to grasp that its own arrogant nature has brought this on.

The latest figures from the New York Taxi and Limousine Commission put the number of “For Hire Vehicles” or Ubers at 14,088, as opposed to almost 13,600 taxis. UberX has made significant inroads into the Australian market, too, despite being illegal in most parts of the country. The taxi industry dies not have a monopoly on people who want to travel from point A to point B anymore and the explanation is simple: travelling by taxi is expensive, the travelling conditions are not ideal and the drivers are not always nice.

James Hickman, chief investment officer for Boston-based research firm for the taxi medallion industry HVM Capital told BostInno that everybody complains “the taxi industry is an out of date model,” but he also criticized the fact that, whenever a change is suggested, it fails to materialize. Former Carriage News columnist R.F. Kelly complained that the Boston Taxi Advisory Committee is failing to do much beyond admitting that there is a problem with the system.

Instead of battling for space on the taxi rank, Uber and rival apps like Lyft, Sidecar, Hailo, GetTaxi and others are now competing for a slot on a phone’s screen, a winning method so far. Although the concept Uber implemented is newer in Australia, analysis from Pocketbook, a personal finance blog, revealed that for every $12 AUD spent on taxis in Australia, $1 AUD is spent on Uber, which has recently seen a skyrocketing growth.

Clients can book a car through the app and track its progress via real-time GPS. Payment is cashless and users can give their driver a rating which determines whether they are kicked off the platform or continue to work under the Uber name. The drivers cannot be tipped because of the payment method, so people do not feel obliged to give them extra money for nothing.

Uber Australia general manager David Rohrsheim told News Corp Australia the company’s drivers go through background checks “and that’s not the same for the taxi industry.” Plus, unlike a random taxi which is picking customers from the street, Uber users have the driver’s details. “Customers are switching [from taxis to Uber] because they’re unhappy,” added Mr Rohrsheim.

Sydney communications worker Peter Kloczko recommends Uber because “it’s a really intuitive and easy app to use and the customer experience is great,” noted. Consumer advocates Choice holds the same position; the spokesperson opined that the taxi industry “was not meeting consumer expectations,” so the car-hailing service’s debut “was a wake-up call.”

Last year, a survey of 2000 Sydney residents found that people mainly use taxi alternatives such as Uber, Lyft, Sidecar and other car-hailing services because they are cheaper. While 75 per cent of the respondents said they do not use taxis anymore because they are expensive, 15 per cent said reliability was a serious reason for avoiding traditional taxis.

The taxi industry’s popularity is shrinking as Uber and other car-hailing services are offering people an alternative. While customers are picking sides, taxi drivers are picking fights. In mid-March, Uber drivers came under attack from taxi drivers in Brussels, Belgium, in a burst of violence which highlights tensions over the growth of the San Francisco-based company.

The taxi industry has started to lose ground as it fails to acknowledge that competition is healthy and all it needs to win it is to rise above it.




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