We have entered into an era known as the “sharing economy”. People are using the internet to share things like their home, their boat, their airplane, and yes, their car. As somebody from the baby boomer generation, I was always taught to never give a ride to strangers, don’t do stupid things like the kids you hang out with, and take what you want but eat what you take (but that’s a whole other story).
What is Uber?
I will be talking about UberX which guarantees a nice vehicle and a personally licensed driver. Simply, Uber is an app for smartphones that connects people who need a ride with drivers nearby. UberX is the lower cost option marketed with the tag line "everyday cars for everyday people" vs. the Original Uber Black (private driver sedan or town car services), Yellow Cab and Taxi services, SUV services (private driver), or luxury services offered through Uber.
How big is UberX?
UberX is already worldwide operating in over 100 cities and 39 countries, including the good old USA and within it, San Diego.
What are the drawbacks to UberX?
One issue with UberX is the depth of the background checks performed on potential UberX drivers. UberX does not require fingerprinting, a drug test, sex-trafficking awareness tests, or a defensive driving course, all of which are required by the mainstream taxi companies. There have been complaints filed against some UberX drivers including allegations of sexual harassment, kidnapping, and rape.
Another issue with Uber is a policy called surge pricing. At high demand times, the listed price of hiring an Uber driver goes up significantly (I get frustrated when the parking lots near Petco Park raise rates when larger crowds are expected at Padres games). Since taxi companies can’t have flexible pricing based on demand, there is legislation in Washington to try to allow taxi companies the same pricing flexibility to level the playing field. Personally, I hate the idea.
One of the biggest issues with UberX and one that concerns me is the lack of insurance. Not only is livery services (driving people around) excluded from coverage on a personal auto insurance policy, the coverage stops when the UberX driver activates the app letting people know that he or she is available. So what seems to be an easy way to make some extra money could be very costly to an unknowing driver. Uber is working on putting together a master policy for the drivers but with something this new, who knows what is covered, what is not covered and how much the policy would cover. Generally, these things are honed by a series of court cases but who wants to be a guinea pig in a court of law?
Why do consumers love Uber?
Most consumers love Uber for its convenience, customer service, and for increasing their transportation options. And increased competition generally drives down rates and makes companies offer better customer service (have you ever ridden in a cab in New York City where the driver is rude or passes you by altogether?).
What Uber customers need to know?
Consumers need to know that according to Uber’s terms and agreements, Uber is not responsible for anything that happens to passengers when using Uber. It is also important to know how easy it is to become an UberX driver meaning that some shady characters may be driving people around. Once a ride has been booked, Uber sends a photo of the driver and shares the license plate number and a description of the car so riders know what to look for. Uber urges customers to never get into an Uber car that they did not order! There is also a button on the app that can, without the driver knowing, send recipients an estimated time of arrival so friends and family can track the passenger’s progress.
Is Uber a good idea? It’s too early to tell. Certainly, there are dangers involved that are not normally found among main stream cab companies and drivers. And issues like liability and insurance coverage have not been well defined in court cases. Certainly, the cab companies have to follow more rigorous licensing and vehicle maintenance protocols. But, Uber and the other companies like them are in their infancy. We’ll have to wait and see how it all shakes out. Time will tell.