Uber vs Taxi; Substitute or Complement?

Uber vs Taxi; Substitute or Complement?

Few firms in Uganda will offer something that their name becomes so vibrant. But this is one of the many achievements of Uber, a transportation company founded in 2009 is now the world’s most valuable startup, worth around US$70 billion. The Uber app can summon a car in moments in more than 425 cities around the world including Kampala city. The service was launched in Uganda on June 2nd 2016.

How does it work?

Uber doesn’t own cars. Their business model is quite unique from other transportation service providers. Pioneer transportation companies like Silver fleet and Blue Cruiz own cars. Uber relies on people who the cars.

The person in need of a ride can get a driver of their choice or one appointed by Uber. Uber uses Internet and Global Positioning System (GPS), a radio navigation system that allows the user’s geographical location to be identified.

Once a user requests for a ride, the nearby driver is notified. The application displays an estimated time of arrival to the pickup point. The application notifies the requestor when the driver is about to arrive. The app provides information about the driver- partner, including first name, vehicle type and number plate. In case there is a co- passenger, their name is also provided but their destination is not disclosed.

This enables passengers to secure rides at more affordable rates and cuts out the need to wait for a cab or taxi aimlessly on the street.

Because anyone that meets the minimum requirements can sign up to become an Uber driver- partner and start making money, Uber has spread like a bad rumor.

What’s the risk with this business model?

There are several conservative individuals who never want to have their correct details on the internet. Besides the information submitted during sign- up, your location and name will be known by the nearest driver- partner.

A person who wants to target you can choose to become the nearest driver so that when you request for a ride, they are the ones to come and pick you up. Remember, with technology anything is possible.

We live in a country where it is very difficult to do concrete background checks. We do not have a single verifiable form of identification. The efforts to make the national ID a single form of identification have not provided the required confidence. In April 2016, the Observer Newspaper broke a story where the Internal Affairs Minister, Rose Akol had asked Rwandan Nationals in Mirama hills holding both the Ugandan and Rwandese National IDs to surrender the Ugandan IDs.

The Uganda police do not have a (an online) data base of criminal and other offenders.

In July 2016, there were reports of fraud from at least two banks where money was stolen from customer accounts and cashed out from mobile money SIM cards. The mobile money SIM cards used were not registered in the actual holder’s name.

All these cases clearly underline the absence of structures to support Uber in vetting both driver- partners and riders/ passengers. In general, identity theft is very easy to commit and get away with.

If the Uganda police have failed to establish an online criminal data base, how ready are they to investigate cybercrime? Is it an issue of willingness or ability with the Uganda policy and other institutions?

There have been reported cases of kidnappings, theft, sexual assaults, imposters, driver DUIs and even deaths attributed to Uber in much organized and developed cities where Uber is operating.

So how can you as a passenger or driver safeguard yourself?

It goes without saying that security measures always begin with awareness. I wouldn’t advise anybody to sign- up for any service when they don’t have the basics on how it works. Know what information you can obtain about the rider and/ or driver- partner.

Riders should check the driver’s name and photo, vehicle type and number plate to ensure that these are the same as the ones on the app before entering the vehicle.

Keep your friends and relatives of your location and expected time of arrival. This way, they can react when anything unexpected happens or is suspected. Share only what is necessary. Uber has an anonymous system to ensure passengers and drivers don’t need to share their personal information.

Travel with someone you know where possible and keep your mobile phone charged to keep track of your route and remain reachable. Uber uses GPS to keep record of where the driver goes during a trip.

The Challenge.

Uber’s selling point has been the lower fare it charges in comparison to other service providers. If Uber raised its prices, it risks losing most of her customers. Clients at times may not look at convenience but the monetary value attached to your service.

The Opportunity.

The pressure of the rivalry is already heating the other service providers. Uber has a unique business; uses people’s cars who would like to make extra money and therefore has less liabilities. Given this business model, Uber will take it at the end of the day. Watch the space.