Last week, I joined the ranks of the Uber millions.
The on-demand, ride-sharing company—one of the largest private companies in the world—has exhibited meteoric growth. On Christmas Eve, Uber celebrated its billionth ride (yes, with a B). That’s from a starting point of zero way back in 2012.
Uber now serves some 300 cities in 60-something countries. Here in Arkansas it’s only available in the Northwest Arkansas and Little Rock areas. My debut ride occurred in Memphis.
Like all “gig economy” firms, Uber’s concept is based on linking providers and consumers directly. Here’s how Uber works: The company recruits drivers in its service areas, who use their own cars (at their own expense) to drive customers to destinations.
Where taxis invest the bulk of their money in fleets of cars, Uber is basically a software company. It developed a smartphone app (application) through which all Uber transactions occur. Employing all the wizardry of modern e-commerce, the Uber app keeps driver and rider information completely separate.
Neither ever knows the other’s phone number. The driver never knows the rider’s credit-card number—that information is given only to Uber—and all drivers are rated by riders, a la eBay’s feedback model.
The basic concept itself is brilliant. Most adults own cars, but for the majority it’s a costly asset that is only an expense. What Uber does is offer an opportunity to turn your personal car into an income-producing asset. At the same time, it offers riders an alternative to traditional taxis, and more often than not it’s a better choice: quicker service, cheaper fares.
The Uber app makes it super easy, too. Riders can see if there are Uber cars nearby, and can know with precision what time the car will arrive. They get to see in advance a picture of the driver and the car model being driven. If they don’t like the closest driver or car for any reason, they can choose another.
There in downtown Memphis, my daughter showed me on the Uber app map where cars were. We were going out east of midtown, so she “hailed” a driver. Up pops his photo (he’s a middle-aged black man dressed professionally) and his ETA: Two minutes.
“Oh and look,” my daughter coos, “he’s driving an Infiniti.” Sure enough, and as she shows me the screen I see it’s a late model, too.
In two minutes she gets a text; he’s out front.
As I climb in to the back seat, I let him know this is my first Uber ride. He’s happy to share his opinion with me, and he’s a big Uber fan. Works only when he wants, does it part time (has a regular full-time job, like two-thirds of Uber drivers), meets interesting people. He’s impressed with all the technology and security measures that protect both drivers and riders.
“It’s pretty amazing,” he says.
When I ask about troublesome or intoxicated riders, he shakes his head. Uber charges their credit card on file for any damages or required cleanup.
“If a rider gets sick, for example,” he says, “it’s a $200 fee, which is enough that I’m done for the night!” The cleanup would be a hassle, he acknowledged, but still “easy money.”
Later, when we get ready to order a trip back, our nearest Uber driver is only three minutes away.
“Hey,” I show my wife the phone screen, “Santa’s cousin is coming to drive us.” This driver’s photo reveals a middle-aged white man with white hair and a full white beard. His ride is a major upgrade from a miniature sleigh, however. It’s a red Hummer.
He smiles at the news that this is only my second-ever Uber experience, and like the first driver, is eager to sing the system’s praises. What he enjoys most is meeting people, he says. He has no real horror stories, either, and like the significant majority of drivers in a major survey conducted last year, is pretty happy with his gig.
Every great business-transforming idea, of course, has its detractors, ranging from status quo competitors who have to adapt to new market forces (think buggy-whip manufacturers) to contingency-fee lawyers who consider the court system their licensed one-armed bandit.
In Uber’s case, the taxi industry resents ride-share technology cutting in on its turf, regardless of how fondly consumers have embraced the idea. But nothing has prevented taxi companies from evolving to Uber’s model except their own entrenched inertia.
“Fat and happy is the mother of invention,” said nobody ever.
Politicians and regulators are prone to ignore the first word of our free-enterprise system, and Uber’s dynamic linking of individual citizens in commerce seems far too free of government supervision.
There’s even a class-action lawsuit moving through the courts, claiming Uber misclassified employees as independent contractors (even though the supposed “employees” set their own hours and schedules).
Uber represents the kind of “better mousetrap” ingenuity that once was widely celebrated. That it’s under attack by public organizations, oversight agencies and sue-happy lawyers says a lot about how their bread is truly buttered—and it’s not by progress or innovation.