The Uber challenge

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 Above: The ultimate Uber. The ride sharing company is investing heavily in self-driving vehicles. Photo courtesy Uber Newsroom.

BitDepth#1063 for October 18, 2016

The private ride company Uber is in T&T, recruiting partners, drivers and insurance companies to create a service of private taxis for the traveling public.

This is a challenge on multiple fronts, and things are likely to become quite confusing faster than anyone expects.

The first challenge is to the Government of Trinidad and Tobago, which has conspicuously failed across multiple administrations to address the challenges of peak traffic in this country.

Despite offering monolithic plans like the Rapid Rail Project, it’s been smaller initiatives like the Water Taxi service, running between Port-of-Spain and San Fernando that have had the greatest impact, most notably because they actually exist.

Traffic management plans have had only sporadic success, with the promising one-way traffic project through St James and Woodbrook coming to an screeching halt months before the trial was scheduled to officially end.

There has never been any publicly available evaluation of the results of that project, nor has there been any reporting on the initiative to make the Priority Bus Route available to drivers with multiple occupants.

It’s long been the style of the Government, regardless of the political directorate, to eschew the simplicity of time and motion studies in favor of the grand industrial gesture requiring miles of concrete and asphalt and dump trucks full of taxpayer money.

Now it must face a movement driven by the irresistible force of technology and the willingness of ordinary citizens to participate in cost-effective public transport.

Unfortunately, Uber depends on the well-known local practice of “pulling bull,” a fairly entrenched community level response to the shortage of licensed hired taxis by drivers using personal vehicles to illegally transport paying passengers.

This is against local laws, but generally, law enforcement gives such drivers a bligh, given the realities of public transport, particularly during dense traffic hours and sparsely serviced late night off-hours.

Now the government must decide whether it’s going to extend that courtesy to a billion dollar multinational company (Uber declared net revenue of US$1.1 billion for its second quarter, 2016 and is worth an estimated US$62 billion).

Private taxi entrepreneurs, better known locally as PH drivers, will have to decide whether they will partner with local versions of the Uber model, of which there are at least four, run with the big dog, or figure our how to raise their game to meet the challenge of a business that has successfully spread into 66 countries and 507 cities.

That’s also going to be a particularly high hurdle for the four local private ride companies who are currently staking out the possibilities and profits that await in Uber-style public transport territory.

All these local startups (Drop, QuickPickUp, WeTaxi and the still to be launched Reach) are starting from zero and face a competitor with seven years invested in refining both their software and business model in multiple markets. According to LoopTT, they aren’t overjoyed at the prospect.

Looking to the far horizon, Uber is investing heavily in autonomous vehicles, which eliminate the cost and reliability issues of an actual driver.

While most of T&T’s homegrown private ride companies have been figuring out how to implement the model given local legal constraints, Uber is more likely to follow its normal game plan, which is to start the business and lobby the government to change its regulations in the face of popular support.

This doesn’t always work.

After three years of battling the government and a homegrown competitor, Didi, in China, Uber sold its business to Didi’s owner, Jean Liu in August. As Uber caved to massive losses in the Chinese market, regulators began relaxing laws allowing ride sharing.

The company also completely flamed out in Japan, where local customs and systems doomed its flamboyantly American flouting of Japanese law.

In Germany, Uber slammed into a wall of resistance by licensed drivers and shuttered its Frankfurt office within 18 months. Hungary passed a law in July allowing the authorities to block Internet service to “illegal dispatcher services.”

France fined Uber executives 800,000 euros for “operating an illegal car service” in June and was working on laws to limit Uber’s access to licensed drivers.

Faced with regulations limiting their capacity to operate in Austin, Texas, both Uber and Lyft left the city. No more coupons for a free ride.

Much of Uber’s success over the seven years it has been in operation can be attributed to the growth of smartphone and an inventive use of powerful backend technology to support customer desire and demand.

But the company has also grown by leaps and bounds by flying largely under the radar of regulators and its model is hardly invincible.

Success in T&T will largely depend on the government’s appetite to enforce existing public transport laws, the inventiveness and agility of local private ride operators and the willingness of local PH and licensed taxi-drivers to observe and respond to the changes that the new travel options will offer to local commuters.