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Ride-sharing service Uber announced it was leaving Broward County at the end of July, 2015. They cited the ‘onerous’ regulations put in place by the Broward County Board of Commissioners as the reason. Response from consumers has been largely ‘thumbs down’ with tens of thousands of signatures already collected to support Uber in Broward.
Why the fuss?
Consumers seem to feel that Uber has some real advantages over taxi systems. And a quick look at the facts seems to back this up: Consumers can book a ride over their smartphone, and the driver for their request is dispatched instantly by location matching. Wait times are generally shorter. The expected pricing for the ride is quoted ahead of time, and billing happens in the Uber app—no need for cash. There’s a record of which driver took which passenger where, and the entire affair is tracked live. Plus the financial advantage—Uber is, quite simply, cheaper than a cab ride.
Historically, cabs have been big business, for both the cab companies, and for the cities that offer licenses, or medallions, to operate a cab.
In the spirit of following the cash to determine cause and outcome, Uber has proved a major disruptor– the value of taxi medallions has plummeted in cities where Uber has thrived. And taxi medallions—the right to operate a taxi in a city of license– are a big source of revenue for cities. What has been seemingly good for consumers—and indeed for the drivers themselves– has been bad for the taxi industry holding the medallions.
Some will argue that Broward County government is trying to protect consumers by ensuring they only have accessed to government-licensed taxi operators. And others will argue that Broward County government regulators are trying to maintain a monopoly for a politically-powerful industry.
One thing seems likely. Uber is here to stay, at least in most cities.
At the heart of its operating model, Uber is about data, and lots of it– yet another example of the digital transformation of business.
Uber knows where its customers and drivers are located, and matches them in real time to improve efficiency. Uber has data banks that store customer financial data, allowing ease of payment both for the ride and to the driver. The digital records stored help ensure safety of passengers and drivers—there is no anonymous pick-up on a street corner to cloak potential wrong-doers.
This data bank is what delivers the advantage Uber enjoys.
All the important data needed by a company, employees of that company, and potential consumers is instantly matched together electronically to deliver a service. The fact that this data bank completely knocks out the ‘middle-man,’ or this case, the medallion-holder, is just an example of how digital data can increase efficiency. And profits—one has to wonder how much profit will be generated as Uber traffics more and more targeted advertising based on location and profiles of their users.
Data drives Uber.