Disrupting the taxi industry: personal transportation startups

Personal transportation startups. Overview of the market

Self-driving cars have been a trend for a while now. While Google has invested in this sector and has even showcased autonomous car test-drives, Nissan, MercedesBenz and General Motors follow suit. Together with self-driving cars and the connected car industry that is already disrupting the market for car ownership, personal transportation startups, such as Uber, Lyft and SideCar, are bringing even more pressure, raising turmoil both in the taxi industry and the car ownership one.

Uber: one of the most loved and hated startups of the smartphone age

Since its founding in 2009 Uber has launched in 70 cities and it’s one of the personal transportation startups that’s mostly disrupting the taxi industry. Travis Kalanick, the 37-year-old chief executive of Uber says that “the taxi industry has been ripe for disruption for decades. But only technology has allowed it to really kick in.”, even though this has not been easy as Uber is both loved and hated. They battle with city regulators, taxi interests and critics who claim it is not safe.

However, Uber is also much loved and for some the cheap alternative to car ownership.

What’s so great about Uber is its innovation and take on present technology. If this were to exist in the taxi industry, the need for such startups wouldn’t be so highly felt by people. However, let’s face it: it’s not comfortable, nor nice to wait amid the hustle and bustle of the city, for a taxi, shout for it in the street, maybe run through pouring rain, and be driven by a random stranger who might be annoying chatting at his phone, and with the pretense of being given a fat tip. No, thank you! Not, when with only a tap on your smartphone’s touchscreen you could get yourself a ride.

Uber uses GPS technology to give your address to you driver, even if you don’t know where you are and to let you know where that person is. What’s more, you can view the rates for your city on your app, and you know the approximate price of your ride. Also, you get info about and the rating of your driver, and you pay from your credit card automatically, so there’s no need to leave a tip. You can also rate your experience and driver.

Lyft: drive with a moustache

Lyft functions in the same way. It’s a ride-sharing startup and what’s so great about these personal transportation startups is firstly, that they create job opportunities for people who couldn’t fit in the taxi industry, because of their schedule primarily. Now they can drive in their free time only and just do some extra money. Secondly, they are great because they add a unique flavor to travelling. With Lyft you are recognized as a driver because of the pink mustache, which created a trend in the beginning for people to be photographed with cars. Also, there’s the fist-bump as a typical greeting.

What’s so special about these startups is that they differ from the taxi industry in some ways, though many, even in the court of law, would say that “if you look like a duck and you walk like a duck, you’re a duck”.

Disrupting the taxi industry

The idea of ride-sharing is mostly what differentiates personal transportation startups from the taxi industry. There are pro and con views when it comes to this. Both Lyft and Uber have the possibility of offering you to share the ride with your friends, so you can get 6-seat cars and so. Uber also has recently added the UberPool possibility in which people are asked to join a ride in adjoined places at a lower price. Uber also offers you the possibility of impressing your sweetheart with a fancy ride, by letting you choose the “LUX” offer, described as “The finest cars with prices to match.”

While it is clearly stated that the startups are not to be used for commercial causes, or viewed as taxi cabs, there is much controversy. Uber has been blocked from operating in several markets such as Miami, Texas, by regulators who want to protect the interests of consumers or entrenched incumbents. They’ve been sued by taxi operators in Boston and Chicago, and some accused them of risking passengers’ lives by allowing untested drivers on the road, and lowering prices in order to kill competition.

Would you ditch your car?

Uber is not aiming to disrupt the taxi industry, or better said, not only it, but it aims to fight car ownership. However, this is a direct take on the American dream: family, house and car. For people who invest so much money into buying the ultimate model of a car even though it’s not necessary for their welfare, why would it matter if with Uber they’d be spending less money?

Would you ditch your car if you knew that it’d be cheaper for you to use UberX instead of your car if you drove less than 9.500 miles in a year? However, if you drive more than 13.500 miles a year, using UberX could cost you an additional $6000 than owning a car.

If you want to see for yourself the cost check this article out. If you have any more questions about these personal transportation startups and their influence on the market, feel free to ask.

Philipp Kandal