For seven years I drove a taxi here in Pensacola, Florida. When Uber came on the scene, it was apparent to me that it was a taxi service disguised as something else. Uber was using various weasely excuses to get around the traditional licensing of taxicabs that many (but not all) municipalities have in place. Once the camel got his nose under the tent, there was no stopping it. Now Uber is everywhere. I saw the handwriting on the wall and made the Big Switch last May - a year ago, come to think of it!
As a company, Uber has never been profitable. It loses billions of dollars each year. Yet investors threw money at it like crazy, allowing the company to grow on a worldwide scale. And, sure enough, one of the reasons people use Uber is because it works everywhere. One app: every city. What's not to love?
Well...investors do love profitability. And it must have been with a certain amount of trepidation of senior management when they took Uber public this month (May 2019). Because now, instead of just being answerable to a relatively few investment capitalists, there will be another layer of management to deal with: Stockholders. And stockholders are notoriously fickle and single-minded (read: profit-oriented).
Uber came out of the box strong during the IPO, but the stock price dropped and dropped in the first week. I'm certain it's because of fear and skepticism on the part of would-be investors. To wit: Can Uber ever be profitable? Can it even survive?
Uber has stated that their future profitability depends on self-driving cars (SDC's). And they've hinted very strongly that SDC's are right around the corner. They're not. Merely saying something with conviction about some future event does not make it so. Sure, the technology has made great advances, but there's still a long way to go, and many issues to be solved before SDC's become a reality in your town. And even then they won't be introduced country-wide. Maybe they won't even be introduced first in the litigious U.S.! Would you get into an autonomous vehicle/taxi right now? I wouldn't.
But if Uber can take the driver (and what they pay him/her) out of the picture, then that's 40% more revenue for them. That's the theory, anyway. Who actually knows what additional, unpredicted costs there might be in terms of...oh...insurance, for one thing? If a driverless car gets into an accident and fare-paying people inside of it are injured, who pays? The reliability in heavy-duty commercial use of these new SDC's is unproven. It's a safe bet that passengers will treat an SDC Uber like they do a current taxi, maybe worse.
And what other fees will municipalities levy against the company for having their cars, roaming the streets while searching for fares, circulating aimlessly in already-clogged downtown areas? Here's the thing about a commuter's car: He drives it into the city, parks it, and it's OFF THE STREET during the workday. An autonomous ride-share vehicle drives itself into the city, drops off its passenger and then will still be in the mix of traffic, adding to the congestion instead of reducing it! And instead of twenty or thirty or forty people on a city bus, these same people will be divided up into four- five- or six-passenger (presumably electric) Uber cars? This is supposedly better? Maybe, maybe not.
So there are a lot of unanswered questions, a lot of unknowns. We've only addressed a couple. With driverless cars, Uber assumes that their cost of operation will go down. But I don't think that is assured.
Here in Pensacola, Florida, Yellow Cab has come up with this thing called Z-Trip. It's a hybrid taxi/ride-share service. You can use it just like a regular old taxi: Call Dispatch and they'll send you a car. OR, you can have your credit card information on-file with them and use Z-Trip as you would an Uber. Either way, they charge the going taxi rate here in Pensacola which is $2.25 per mile, which is higher than Uber and Lyft at the moment. Yellow Cab is transitioning all of their traditionally colored taxis to the new Z-Trip branding.
Right now, Z-Trip is only available in certain U.S. cities. And it's not global, of course. But if anything can eat into the ride-share market, it could be Z-Trip...if it can be rolled out and available nationwide.