Uber, the app that links passengers with drivers, is taking the world by storm, disrupting the taxi business and buying fights most everywhere it goes. It launched eight months ago in Auckland and is sending a wave of nervousness through the ranks, finds Phil Taylor.
Dan Carter is a "rider". So, too, is Israel Dagg. The tech-savvy rugby players have tweeted photos of their use of Uber, the app that links "riders" with drivers and threatens to turn the regulated taxi market on its ear.
Dagg tweeted last month about his Uber experience in Chicago, where the All Blacks played the American Eagles, and on his arrival home from the team's British tour, Carter tweeted a picture of himself at the airport with his T-shirted Uber driver.
Uber-cool, cheap and easy is the marketing plan. It's website is smooth, informal, hip. Customers are "riders" who unsuprisingly for a smart phone-based ride service to be younger than the average taxi user. They punch their location into the app and watch on their phone as the Uber car approaches. Afterwards, driver and rider can register their satisfaction.
The entrepreneur behind it is Travis Kalanick who at 38, five years on from launching Uber in San Francisco, is listed on the Forbes 400 with an estimated net worth of US$3 billion ($3.85 billion).
According to Kalanick's blog this month, Uber is in 250 cities -- including Auckland and Wellington -- in 50 countries and is six times bigger than a year ago.
The ride has been bumpy. Uber has found fights around the world, against taxis firms, regulators, drivers and customers. Just as Kalanick likes it, said Vanity Fair in an article this month, that described Kalanick as having a face like a fist "when he's spoiling for a fight". Seems that's most of the time when your mission to to drastically disrupt what he considers a broken transport system. "We want to get to the point that using Uber is cheaper than owning a car," he told the magazine, "transportation that's as reliable as running water."
He predicts Uber will generate a million jobs around the world next year alone and enthuses the deal may get so good people may opt not to own a car, easing congestion and parking in the biggest cities.
Bumps on the road to world domination include customers annoyed by the practice of "surge pricing" where charges rise when demand is high (eight-fold during a snowstorm a year ago in New York) and irate drivers in the United States who picketed and shut off the app, complaining that recent fare cuts (designed to undermine the opposition) made it too hard to make a living.
Surge - or "dynamic pricing" - gets no apology from Kalanick, it's "classic Econ 101".
"You want supply to always be full, and you use price to basically either bring more supply on or get more supply off."
Most battles are with administrators and the obvious enemy, taxi companies. Uber launched in San Francisco in 2010 riding the biggest recent tech trend, the mobile movement. After entering credit card details on the app, anyone can call a car, GPS takes care of the location and the cost is automatically charged to the customer's account.
An early battle was the objection of that city's authorities to the name UberCab, since it didn't have a taxi licence. UberCab simply became Uber and bought the Uber.com domain.
Wrangles around the world mostly involve alleged unfair or unlicensed practice, or that safety checks of drivers are inadequate or misrepresented.
In California, Uber's assurances that it went beyond local requirements for background checks are being challenged. A prosecutor claims that instead of using fingerprint samples from prospective drivers to verify any criminal history, Uber relies on drivers to submit personal information online and then contracts a private company to do background checks. "This can't ensure that the information provided is actually associated with the driver," San Francisco District Attorney George Gascon said.
In New Delhi, Uber has been ordered to cease operation after a driver was accused this week of of raping a passenger, sparking protests about the company's vetting of drivers. In Portland it is being sued for breaching consumer protection laws, in Berlin and Hamburg authorities have ruled that drivers lack required licences. It has run into similar barriers in Belgium, Brazil, Canada, Columbia, Denmark, the Netherlands (where Uber International is registered), Norway and Thailand.
Trouble hasn't hurt growth. In June, Uber snagged US$1.2 billion in financing that valued it at US$17 billion the biggest tech start-up funding round ever.
In New Zealand, Uber drivers have to jump through most of the same hoops as taxi drivers. They need a "P endorsement" -- a passenger endorsement ticket from the New Zealand Transport Agency certifying the driver as "a fit and proper person" a Passenger Service Licence and a Private Hire Service Registration. A police check is done.
Uber itself doesn't need any permit because it is a private hire service rather than a taxi company. Its drivers are contractors, with Uber acting as an agent, putting drivers in touch with people wanting a ride. Therefore Uber vehicles (often the driver's personal car) don't need to have cameras but are not allowed to run a meter. Driver and rider are supposed to agree on a fee at the start of the trip and if the GPS on the app is used as a pseudo meter, the driver can face a fine of up to $2000. The NZTA said it understood that the police have issued infringement notices. The police did not respond in time for this article.
Arguments about this have raged in Paris, where a court has ruled Uber cannot charge by the kilometre, and in London, where its ubiquitous Black Cabs have the exclusive right to use meters.
Ensuring the travelling public's safety is the NZTA's task. It says that while cameras might help, the requirement for taxis to have them came from lobbying by the industry to protect drivers after a spate of attacks that included the murder in Mt Eden of Hiren Mohini in 2010 by a passenger.
Uber says its system enhances safety and accountability by being cashless, providing identity details of both parties, and photos of drivers, and by enabling each party to rate the ride.
The main conference room in Uber's chic new San Francisco offices is appropriately called the War Room. Kalanick, who has hit paydirt with what is his third tech business, is bullish of the ultimate outcome despite global skirmishes.
"If you can get a Prius for cheaper than a taxi, you just changed 100,000 people's lives in a city," he said last month. "If you can get it reliably? Holy shit, that's 'hashtag winning'."
All Black Dan Carter used Uber following his arrival at Auckland Airport recently.
Auckland's demand and supply
You talk to an Uber customer and they are happy because they pay half price and because they pay half price it means more business ... A lot of customers say they don't use taxis because they are too expensive.
Anecdotally, Uber has taken off in New Zealand, though numbers are sketchy. Katie Curran, Uber's Sydney-based spokeswoman, said it had "hundreds of drivers" in New Zealand making "tens of thousands" of trips a week, while NZTA said 630 Uber drivers are on its Driver Check system, "a big increase from a few months ago".
Customers spoken to by the Herald were generally happy, though some said they couldn't get a driver at particularly busy times. Harkanwal, of Devonport, noted he had trouble getting one to pick him up from his suburb.
Stewart, of Herne Bay, loved the software that told him exactly where his ride was and the ease of automatic payment. "And it's a bit cheaper too."
Jo, of Mt Eden, noted that most drivers grumbled they didn't earn enough.
Reaction from drivers was mixed. Bashir Ahmed said he was Uber's first driver in Auckland and had recruited taxi drivers for it but is back driving for an independent taxi company because it didn't pay off for him. He estimated he averaged $450 a week, from which he paid $150 for fuel. He doubted drivers could earn the $1600 Uber claimed without breaching regulations forbidding drivers to be on the road more than 14 hours in a day.
Bashir said it might suit retired people or students who could do long hours at the busiest times.
A driver for a small taxi firm, who asked to be named only as Singh, said he stopped moonlighting for Uber because of the 14-hour rule but had made a good income despite Uber charging about half the taxi rate of $3 a kilometre. This was because there was less dead time and travel between jobs, said Singh.
Both said customers got a good deal. "You talk to an Uber customer and they are happy because they pay half price and because they pay half price it means more business," said Singh. "A lot of customers say they don't use taxis because they are too expensive but they can afford Uber."
Uber nominated Roger Coe as an example of a driver making a good living. Coe, 69, told the Herald he had driven his Prius for Uber for two months and earned about $1450 weekly, working 50 hours over six days, similar to his income when he drove for Discount taxis.
There was less ineffective mileage with Uber and the experience was "comfortable" because the app allowed passenger and driver to know who each other was.
At the Auckland Co-op rank in Galway St by the Britomart train station, drivers complained that Uber was eating their lunch.
Being a reputable company should count for something, complained one. "Co-op's operation is 65 years old."
His overheads - to the taxi company and airport for access and rank privileges - were more than $500 a month.
It galled him that Uber drivers used airport public drop-off zones unchallenged.
A taxi driver for 13 years, he said Uber was having a big impact on taxi company drivers' earnings and the value of the franchise they bought. "I am an honest man trying to earn a living and I am being undercut like this. I don't know what I'm going to do."
New Zealand Taxi Federation executive director Roger Healey said Uber hadn't made the impact here as it had overseas.
Uber was making its presence felt on weekend nights with trips in and out of town but he believed people were becoming frustrated about reliability. He said Uber drivers could cherry-pick fares.