Tak­ing the Uber penny

The Witness - Wheels - - FRONT PAGE - ALWYN VILJOEN

ASKED if run­ning an Uber taxi would be a good busi­ness, we were a bit flum­moxed for an an­swer at Wheels.

We warned back in 2014 that ride hail­ing apps will change the me­tered and mini-bus taxi in­dus­tries, and cor­rectly pre­dicted the busi­ness model is bet­ter suited at sub­sid­ing the cost of a sin­gle car than earn­ing in­come with it. For in taxis as in trucks, trans­port is all about economies of scale and the trans­porter with one ve­hi­cle is des­tined for bank­ruptcy.

Since then, me­tered taxi driv­ers have been fight­ing Uber driv­ers lo­cally while pas­sen­gers are com­plain­ing they have to pay steep can­cel­la­tion fees when the Uber driver is at fault.

In the U.S. Uber driv­ers have now twice sued the ride hail­ing com­pany for its “de­cep­tive ad­ver­tis­ing” (read bla­tant lies) and was awarded multi mil­lion dol­lars in rec­om­pense.

Our main worry about Uber is that the com­pany can and have dropped driv­ers’ fares with­out no­tice, which is why U.S. driv­ers who once made $40 an hour now makes $12,50, and have to work 18 hour days in the hope of qual­i­fy­ing for Uber’s small car­rot, a $500 bonus for do­ing 120 trips a week.

A new study by Ox­ford Uni­ver­sity also shows where Uber ap­pears, new driver jobs are cre­ated, forc­ing the av­er­age in­come of all taxi driv­ers down by 10%.

But pas­sen­gers who have to get some­where do not care.

In South Africa, an Uber taxi is sev­eral times cheaper than a nor­mal me­tered ride, even in “peak de­mand” times and for the most part, the clean, safe ve­hi­cles ar­rive on time, which is to say within a few min­utes.

So Uber will keep on grow­ing — cre­at­ing busi­ness op­por­tu­ni­ties for en­trepreneurs who want to run a fleet of Uber cars.

For dar­ing driv­ers, Uber has part­nered with Wes­bank to pro­vide full main­te­nance leases that will see a driver who trav­els about 5000km a month pay R1 710 per week or R6 840 per month in­clu­sive of in­surance and tyre wear ac­cord­ing to Uber.

To qual­ify for the lease, a driver does not need to meet any of the tra­di­tional credit rat­ings, in­stead a driver has to get at least a 4.70 rat­ing from the pas­sen­gers and carry 1 000 fares over three months.

Uber has also an­nounced that Hertz, Europ­car, Pace and Fleet Data Tech­nolo­gies will also be rent­ing ap­proved ve­hi­cles to prospective driv­ers from R5 600 per month and R0.45 per km trav­elled on a short term ba­sis. But let the leaser be­ware, for if the sto­ries from the U.S. show one thing, its that the sands at Uber is al­ways shift­ing.

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