Uber as the urban transit market new competition

Adapted from a Bloomberg, Jun 23, 2015 report.

there arevInbelive huge economic implications as the UBER urban transportation model.  That model threatens competition from Limos to Taxis and even buses.

The Bloomberg report talks about the politics of urban transportation in Portland Oregon. But beyond that lies huge implications for urban transit in general.

Uber’s made a name for itself by barging into cities and forcing politicians to respond. It started in 2010, providing swanky rides at the tap of “an app”. A customer pushed a button on their smart phone, and a car showed up

The company has since expanded to take on lower-cost taxi service in more than 300 cities across six continents. The company value of Uber is now an astonishing ~ $40 billion.

uber is an economic ride sharing model with custom features. It is a new class of urban transit provider called “transportation network companies.”

Almost no regulations exist to oversee this exact new transit service model. The state of Colorado passed the first USA “ride-sharing legislation” about a year ago. Bloomberg reports that since then, about 50 U.S. jurisdictions have adopted ordinances recognizing Uber. The regulations try to secure ground rules for these new “transportation network companies.”

Each government, whether municipal or state, goes through its own process to craft rules. The officials generally codify the insurance coverage, background-check policies, and inspection protocols. But often, Uber already has in place rules that reflect a vast international commerce model that they wrote well before local jurisdictions could react.

To protect its membership, Uber built one of the largest and most successful lobbying forces in the USA. “With a presence in almost every US statehouse, Uber has 250 lobbyists and 29 lobbying firms registered in capitols around the nation That is “at least a third more than Wal-Mart Stores” have. That doesn’t count municipal lobbyists. City officials in Portland Oregon “say they’d never seen anything on this scale.”

The City of Portland’s has a very progressive transit services mixture. “People can bike in protected lanes, ride the bus or MAX trains (one of the nation’s busiest light-rail systems), or tool around in Smart cars from car-sharing company Car2Go.”

But there are holes, especially for residents living far from downtown, the disabled, and late-night partyers. The city’s taxis have been known to fall short of demand. Portland has fewer cabs per resident than most comparable cities, and drivers take home just $6.22 an hour, according to a 2012 survey.

The taxi companies didn’t hold traditional political power as major campaign donors or lobbying forces, but their furor succeeded in resisting, or at least delaying, change. It took a nasty four-year battle for a group of largely immigrant drivers to get permits in 2012 to start Union Cab, a driver-owned cooperative.”

“Uber first targeted Portland in 2013, when it wanted to introduce its luxury car service, UberBlack. It couldn’t legally operate because a city ordinance required black-car trips to be reserved an hour in advance, the legacy of a 2009 agreement that carved out separate markets for hire cars and taxis.”

The Uber model threatens some part of that Portland structure. Even a segment of the subsidized bus riders can be drawn to an Uber service segment with a much more reliable Phone App call service.

Bloomberg reports the following as some of the market segment descriptions of Uber services. Uber’s policy group has its own team of data scientists. They show: — in San Diego, 30 percent of uberX rides start or end near a transit station. — in Chicago found wait times were consistent across the city, regardless of area income. — Uber drivers make livable wages, as in more than $16 an hour.


Uber is clearly a new competitive force in the urban markets. How will this all “shake out”?

To read the entire article, go to http://bloom.bg/1FAI5RA Sent from my iPad

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