Uber offers good-old, traditional competition

As dawn creeps over New York’s Jamaica Bay, flocks of wide-bodied red-eyes — overnight flights from the West Coast — land at JFK International Airport. The minute the wheels touch, cellphones click into action.

Mine shows a message (now lost) going something like this: Avoid the taxi lines. Use Uber instead.

Though I’d signed up for Uber, a smartphone app that can call up a ride, I scoffed at the message. How bad could the wait be at 6:45 on a Sunday morning? I soon found out.

Easily 100 travelers were inching around a maze of ropes under a cheerful yellow New York taxi sign. Welcome to New York. And welcome to the reason a company that efficiently connects passengers with drivers is threatening the pick-‘em-up-at-the-curb taxi business all over the world.

Investors are now valuing Uber at over $18 billion, a figure some see as extravagant. But Uber’s undeniable success has highlighted the prospects for this business model, whereby customers and providers link up online, bypassing regulated industries.

The traditional taxi drivers are not happy about this. After all, they must buy permits and follow a bunch of rules the freelancers don’t need to. Many see Uber as an unlicensed cab or limo service.

Uber insists it’s not a transportation provider — it doesn’t own the cars — but a “platform.” (It does handle the credit card payments.)

Anyhow, Uber has faced resistance in Chicago, Toronto, Seattle, Berlin, London and elsewhere. In Paris, taxi drivers physically attacked its cars.

Uber started off as a premium car service, sending out Cadillac Escalades or the like and charging more than a city cab would. Then came UberX, where users could request a lesser vehicle at a lower price. Then came its ride-sharing service, connecting people in their own cars with strangers needing a lift.

Uber has run into controversy over its “surge pricing” policy. In periods of high demand — say, during a snowstorm or on New Year’s Eve — it may multiply the price of a ride. That doesn’t happen with metered city cabs.

Some customers complain bitterly about this, but I think it makes great sense. As Uber argues, the higher prices bring more drivers out at busy times.

Using the app one morning in Hermosa Beach, California, I was offered the option of paying extra for a fast pickup. It was totally upfront and therefore fair. And I wonder how many travelers begging for a cab at JFK’s Terminal 4 would have happily paid an extra $10 or $20 to trim a half-hour off their wait.

Uber’s service is not perfect. In Providence, Rhode Island, an UberX driver couldn’t find my address, despite the large numbers nailed on the door. I had to run after the car, stopped a block away. Then I had to give the driver directions to the destination.

One does feel for the traditional taxi owners paying large sums for their medallions and permits. But if their industry were on the ball, it would make darn sure that the hordes of beat passengers seeking taxi transport out of JFK have yellow cabs there to serve them.

Also, it would do something about the dumpiness of the cabs, made dumpier by back-seat screens blasting ads and messages about how exciting New York is. And it would discipline drivers who stick their heads out of the window to ask where you’re going and then drive off if they don’t like the answer. They’re not supposed to do that, but they do.

Technology is clearly disrupting another traditional business. But when it disrupts in the service of better service, that’s OK with me.

Froma Harrop is a Providence Journal columnist. She can be reached at fharrop@gmail.com.

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