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| The future of taxi is still Uber. |
ASKED if the running an Uber taxi would be a good business, we were
a bit flummoxed for an answer at Wheels.
We warned back in 2014 that ride hailing apps will change the
metered and mini-bus taxi industries, and correctly predicted the business model
is better suited at subsiding the cost of a single car than earning income with
it. For in taxis as in trucks, transport is all about economies of scale and the
transporter with one vehicle is destined for bankruptcy.
Since then, metered taxi drivers have been fighting Uber drivers
locally while passengers are complaining they have to pay steep cancellation
fees when the Uber driver is at fault.
Overseas, Uber driver have now twice successfully sued the ride
hailing company for deceptive advertising (read blatant lies) and was awarded
multi million dollars.
Our main worry is that Uber can drop a driver’s fares without
notice, which is why U.S. drivers who once made $40 a week now makes $12,50 and
have to work 18 hour days in the hope of qualifying for Uber’s small carrot, a
$500 bonus for doing 120 trips a week.
A new study by Oxford University also shows where Uber appears, new
driver jobs are created, forcing the average income of all taxi drivers down by
10%.
But passengers who have to get somewhere do not care.
In South Africa, an Uber taxi is at least ten times cheaper than a
normal metered ride, even in “peak demand” times and for the most part, the
clean, safe vehicles arrive on time, which is to say within a few minutes.
So Uber will keep on growing in all the cities it operates,
creating business opportunities for entrepreneurs who want to run a fleet of
Uber cars.
For them, Uber has partnered with Wesbank to provide full
maintenance leases that will see a driver who travels about 5000km a month pay
R1 710 per week or R6 840 per month inclusive of insurance and tyre wear
according to Uber.
To qualify for the lease, a driver does not need to meet any of the
traditional credit rating, instead a driver has to get at least a 4.70 rating
from the passengers and carry 1 000 fares over three months.
Uber has announced that Hertz, Europcar, Pace and Fleet Data
Technologies will also be renting approved vehicles to prospective drivers from
R5 600 per month and R0.45 per km travelled on a short term basis. But let the
leaser beware, for if the stories from the U.S. shows one thing, its that the
sands at Uber is always shifting.
