When it Comes to Uber, Consumers May Speak Loudest
Uber was founded in 2009 as a venture-funded transportation company, allowing riders and drivers to connect on their mobile devices and see other people’s reviews about each other before agreeing to a ride. It’s ruffled the feathers of taxicab companies that dominated the industry through regulation for the past 80 years, said Marc Scribner, a transportation policy expert at the Washington, D.C.-based free market Competitive Enterprise Institute.
And in a market where consumers now have a choice, they’re speaking with their bucks and their business.
“Uber, to their infinite credit, coming up with the two-sided rating system for drivers and passengers, creates a very interesting, self-regulating system,” Scribner said. “Every car I’ve taken, whether it’s Uber, Lyft Sidecar, the drivers are incredibly courteous, on average, far more courteous than your average cab driver. People are seeing that.”
But taxicab companies say they just want companies like Uber and Lyft to play by the rules. And Spencer Kimball, president and one of the owners of Alexandria Yellow Cab, isn’t sitting idly by while technology outpaces his company.
“We at Alexandria Yellow Cab have been watching this trend for quite a while,” Kimball said.
Sure, there’s already some technology out there like Taxi Magic, an app that allows you to order taxis from your cell phone. But Kimball looked all over the world — literally — to find someone to develop a mobile app for taxis better than Uber’s. And he and his general manager traveled all the way to the United Kingdom to meet with a company there. It took some footwork, but Alexandria Yellow Cab now has a preliminary agreement to be the first company in America to roll out this kind of app service, he said.
“By late July, early August, you will see an entirely different interface for a Alexandria Yellow Cab,” Kimball told Watchdog.org. “It will do everything that Uber and Lyft do that customers like, and then some.
“I don’t know what’s going to happen with Uber and Lyft and the regulations, and frankly I don’t want to be standing around waiting to find out,” Kimball said. “Our job is to provide the best service we could possibly provide to the customer, no matter who is out there. So that’s what we intend to do.”
Social media presence, however, has been the strength of companies like Uber.
The day after the Virginia DMV sent cease-and-desist letters to Uber and Lyft at the beginning of June, Uber sent an email to its subscribers in Virginia with the subject line, “You have the right to ride,” telling Virginians they are committed to staying in the state and explained how the company exceeds the state’s background check and insurance requirements, and encouraging riders to tweet with the hashtag, “VAneedsUber.”
Immediately, and ever since, riders have taken to Twitter to support Uber.
“Let the people have Uber,” tweeted Scot McRoberts. “The regulatory resistance in VA is unwarranted. #VANeedsUber.”
“I support @Uber_DC & Uber_HRVA and the right to affordable and reliable transportation in Virginia! #VAneedsUber Big mistake @VirginiaDMV,” tweeted Adam Kissel.
“I’ll say it again: Give me @uber, or give me death #VAneedsUber #tcot,” tweeted Matt Vespa, editor at the conservative Townhall.com.
The outrage definitely concerned some Virginia officials.
“I’m looking into the Uber issue,” tweeted Democratic Delegate Patrick Hope, who represents Arlington County. “The @VAGenAss needs 2 intervene when back in session if DMV & Uber cannot reach compromise. #vaneedsuber”
“I don’t think I’ve ever seen the left and the right unite like they are right now in the fight for Uber. #VAneedsUber,” tweeted Townhall.com’s Christine Rousselle.
For Wilson and others like him, the choice between taxi companies and Uber is simple.
“As far as a customer perspective, it’s so much easier to use,” Wilson said. “There’s more accountability to it. You rank the person right there. It’s not as if I have to get a cab number, then call the cab company, then file a formal complaint and see that there’s no real result with that.”
After Wilson had been using Uber for a while, he said decided to test his own bias and go back to cabs for a while. The experiment only confirmed that Uber meets his needs as a consumer better.
“For a little while I went back to cabs explicitly to see, is my own cognitive bias?” Wilson said. “It’s the new thing, everyone’s trying it. Is this on me? Am I just kind of falling into the popular collective here? But, no. I had one cab company fail to pick me up, and delaying it 15 minutes, and 15 minutes. I call an Uber on my phone, and I get one in six minutes.”
Wilson isn’t against regulating Uber, but Virginia is going about this the wrong way, he said.
“Should there be some more legislation as Uber gets bigger? Yeah, absolutely,” Wilson said. “But for right now, Virginia’s interpretation is saying, ‘Oh yeah, maybe they are not quite up to our standards right now.’ Maybe they are kind of in violation of that. But there’s no real clear ruling on it yet, so I don’t think you can really have that conclusion. I think the state acted a little bit too quickly.”
The same regulatory fight over ridesharing that’s happening in Virginia is happening in cities around the country, including just across the Potomac River. When the governing body in neighboring Washington, D.C., was considering how to deal with ridesharing, Uber sent blast emails to its consumers asking for support.
When Uber riders flooded City Hall with calls and emails, Uber ultimately gained regulatory permission to continue to operate in the district.
“I think based on what we’ve seen before, these companies are going to be able to harness their customer bases who love these services,” Scribner said. “And you have lawmakers who are not happy with the way the Virginia DMV went, so I think it’s going to be an interesting fight.”
But taxicab companies aren’t exactly trying to win consumers over in the same way Uber is.
In Washington, D.C., recently, taxicab companies blocked the roads in protest of the competition — to the benefit of ridesharing companies and the scorn of consumers, of course. When taxicabs did the same thing in Europe, Uber saw an 850 percent increase in downloads of its ridesharing mobile app.
“For the ridesharing companies, the fact that these guys were kind of doing this pretend strike thing, I think it was most certainly a boom for ridesharing providers, because if you can’t take the taxi, who are you going to use?” Scribner said.
Its decades-old monopoly slipping from its fingers, taxicab companies are still figuring out how to adjust to the needs and desires of customers.
“I think the market is speaking,” Scribner said. “Consumers want these services. They really like these services, and they’re not happy about decades of regulatory government favoritism that these taxicab companies have enjoyed. So I think you’re really seeing a showdown between free market capitalism and crony capitalism.”
At the end of the day, it may be consumers who have the loudest voice.