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Transportation Businesses The Almighty Buck

Cab Hailing Service Uber Collected Just $9M of Fares During 15 Months In Boston 112

curtwoodward writes "Uber, the well-funded startup that hails cabs and black cars with a smartphone app, is a pretty slick way to book a ride. But how competitive is Uber with the traditional, highly regulated cab market? According to results from the startup's move into Boston, not very. Figures released in a court case show that, over 15 months, Uber processed just $9 million in gross fares (the drivers get most of that). Meanwhile, Boston's overall cab industry is pegged at doing about $250 million a year in fares. Despite the publicity, Uber still has a long way to go."
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Cab Hailing Service Uber Collected Just $9M of Fares During 15 Months In Boston

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  • It seems that (Score:3, Interesting)

    by arcite ( 661011 ) on Saturday August 03, 2013 @03:16AM (#44463889)
    Uber is rather pointless. Why would someone go through a 'middle-man' app, thus incurring a surcharge, when they can just reserve with the taxi company direct?
    • Re:It seems that (Score:4, Insightful)

      by malzfreund ( 1729864 ) on Saturday August 03, 2013 @03:31AM (#44463945)
      The cost of the "middle-man" app is tiny. In fact, it may be cheaper to use an app as opposed to having real people answering phone calls. I guess you're right in the sense that taxi companies wouldn't wanna share revenues with another party. But this doesn't make the app intrinsically useless. In fact, taxi companies may well respond with an app of their own (that's what happened in Germany).
      • Re:It seems that (Score:5, Informative)

        by Joining Yet Again ( 2992179 ) on Saturday August 03, 2013 @06:17AM (#44464351)

        I'd rather be able to speak to an experienced human on a 'phone when arranging a service than use another shitty automated middle man which can only deal with the simplest cases and which operates on volume rather than quality. There's always a significant cost to automation for the end user - it's just more profitable for the system's owner.

        Outsourcing is logically less efficient, because someone else is always taking a cut of pure profit which they wouldn't if you provided a service in-house or cooperatively. Giving a middleman control of the initial sale (cf. Amazon, eBay) is one of the worst ways of permanently guaranteeing that a leech will make sure that you have to do an ever-increasing amount of work while they do very little new on your behalf. It's just not business sense.

        • Using an app makes metadata collection much easier for marketers and the NSA.
        • And I'd rather deal with an automated service, rather than a minimum wage human who will manage to screw something up even when everything has had to be repeated three times.

          And outsourcing isn't "logically less efficient". Economies of scale and specialization kicks in. For example, I outsource my electricity generation to a power company rather than building and running my own electricity generation system in my house. I outsource my food production rather than obtaining enough land (and all the other ass

          • And I'd rather deal with an automated service, rather than a minimum wage human who will manage to screw something up even when everything has had to be repeated three times.

            Agreed. I just had a screwup for a human-made reservation from the airport. They had me scheduled for the wrong time (PM instead of AM) and then when they fixed that, they entered the wrong MONTH! If I hadn't checked the day-of by calling, I would have had to split our party into several regular cabs. Not the end of the world, but at least with a web form or app I can be pretty sure that if a mistake is made, it is mine.

            • I just booked a pickup truck a uHaul the other day, for an hour or two's work. When I went to pick it up the at location agreed to on the phone, they told me I didn't have any reservation. I told them to look it up using different criteria and they told me, 'oh you booked the truck in Anchorage, Alaska.' I don't live anywhere near Alaska, and the uHaul CSR on the phone was the one who gave me the address in my city where to pick it up.
          • "Outsourcing" - an annoying neologism, I admit - means rather more than "getting someone else to do something for you". Consumers, in particular, do not "outsource".

            Economy of scale/specialisation does not kick in by default, and even when it does, that usually justifies only a cooperative effort, not outsourcing to a third party. The third party option is only appropriate to consider when a complex business process needs to be implemented which is already delivered well by an established provider.

            Really, g

          • Most people who do use my companies new app like the fact that they can quickly get a cab. They love the fact that they get location updates on their phone of where their cab is in near real time. (Delayed about 2 min.) They really like the fact that they can also call if they do not think the app request went through or if they feel that their cab order is something a bit more complicated than an app can handle. The future is both.

            I work in a company that has over 300 cabs leased out. Computer dispatched,

        • For Christ's sake, you're calling to get a ride from point A to point B in someone else's car. Someone who drives anonymous people (to him or her) from point A to point B for a living, day in and day out. If you have a problem doing that simply, you have a problem.

          Do you really think that by talking to someone you'll influence who they send to pick you up? (And we're talking about dispatched taxis, not ones that you hail... hailing is not common in every city or neighbourhood.) The guy at the cab company w

          • by Guspaz ( 556486 )

            This is a complete paradigm shift (and I use that phrase very infrequently) in how one books a taxi. It disrupts entirely an establised method of dispatcching taxis

            How so? Uber does not do anything that the local major cab company doesn't do with their smartphone app. As far as I can tell, the only real differences are that Uber uses fancier cars, and charges a lot more (they don't service my city, but their policy is a markup on normal taxi fares).

            Assuming cab companies in other cities have similar apps, Uber just seems to be a case of "pay more to get a fancier cab", which isn't a paradigm shift, it's just dramatically restricting your market to people who care abou

            • It you unfamiliar with cab compnies, the bulk of their business in most places is done by calling a person at a dispatching office. This does away with the dispatch office, which is also a significant reporting structure. Leaving a major component out of an established business is a paradigm shift (good thing I proof read sometimes... I keep leaving the 'f' out). Even if the result is the same. But perhaps I'm making the assumption that the server at the end of the Uber smart phone app does the dispatching
              • by Guspaz ( 556486 )

                How is that different than, say, Taxi Diamond, where you enter your order in the smartphone app, it reserves a car, and the address pops up on the GPS screen in the cab?

                Perhaps there is a human verifying it (because in the smartphone app you have to wait half a minute or so for it to allocate the driver"), but the user experience is the same. So that's not a paradigm shift, that's a slight change in behind-the-scenes process. At the end of the day, it's not an advantage to the user.

              • by ethanms ( 319039 )

                Let's not forget that in many cities the dispatcher is also getting kick backs from the drivers to get the choice calls. It's rampant in Boston to the point that several exposés have been written about it in recent history--don't pay the dispatcher at the start of the shift, you either don't get calls at all, or you get lousy ones...

                If the (dispatch) system were far more automated the potential for human intervention and exploitation starts to dwindle.

                • For sure. I drove a taxi for a couple years in Ontario when I was 18, 19 years old. Helped me realize school wasn't so bad. :) You always had to keep on the good side of the dispatchers. One dispatcher was this morbidly obese guy who would be happy with you if you would bring him a gallon of ice cream periodically. It was gross to watch him eat the stuff. It was almost like he was having an orgasm when he ate. And all the fat would jiggle in waves as he took a spoonful. He actually had his stomach stapled
    • by tlambert ( 566799 ) on Saturday August 03, 2013 @03:43AM (#44463983)

      Uber is rather pointless. Why would someone go through a 'middle-man' app, thus incurring a surcharge, when they can just reserve with the taxi company direct?

      It's kind of pointless to hail a cab with it, if what you care about is cost; instead, you hail a rideshare. This is one part of what has the cab drivers panties in a bunch.

      The second part that has their panties in a bunch is that cab drivers are notorious for "closest fare first" behaviour; so if you are outside the downtown area, or off the line between the downtown and the airport, they will leave you hanging and pick up other call-ins before picking you up. Uber and similar apps commit them to picking up the fare as booked, and they find this annoying because they don't get optimum road miles.

      A couple of weeks ago, myself and two friends booked a cab to the Inner Sunset in San Francisco; this is a little way out of the way, wince it requires going about 10 blocks off of 19th Avenue, which is the normal cab travel corridor. We had a person standing outside the entire time, and the cab company tried to claim that the cabbie had attempted a pickup and "got tired of waiting". Twice. But in fact, there were no cabs through the pickup intersection, or either of the cross streets to that intersection for the entire time. We were over an hour past our scheduled arrival time to our destination, thanks to the lying cabbies.

      This sounds anecdotal, but it is in fact common practice in San Francisco, Chicago, and New York, where there are well known "hop-on" and "hop-off" spots, and if you want a cab, you get your but to one of those locations for your best change of getting one; otherwise, you are considered "off route", and the only way you get a cab is if someone isn't busy. This is not cool

      Uber and similar services fix this problem by providing more vehicles for scheduling, through including rideshare and towncar services. This cones at the expense of the cabbies not being booked solid, but having had my butt left hanging in the wind by cabbies on multiple occasions, my heart is not bleeding for them in this case.

      • by Guspaz ( 556486 )

        Uber and similar apps commit them to picking up the fare as booked, and they find this annoying because they don't get optimum road miles.

        Traditional taxi company apps do this... You place your order in the app, it reserves a cab for you (by number), and you watch him drive to you. How is Uber's booking any different?

    • Re:It seems that (Score:4, Insightful)

      by houghi ( 78078 ) on Saturday August 03, 2013 @04:22AM (#44464057)

      Visa/Mastercard is rather pointless. Why would someone go through a 'middle-man' method, thus incurring a surcharge, when they can just pay the company with cash?

      There are many good reasons for going through a middleman and add charges. And each case is different. Most of the time what you pay for is convenience.

      Whether this is something you would want depends on situation and person. Having the option is good. Many people buy a computer a a whole. I like to buy it in pieces.

      Others take up credit on their card, while it would be much cheaper to ask money directly from the bank. Why would they do that? because it is easy. People like to pay for easy. People pay a LOT for easy.

      Pressing a button to get a cab is easier then actually calling and there are apparently enough people willing to pay for that.

      • Dunno about you, but using my card gives me up to 56 day interest free credit, generous cashback, and statutory and/or provider purchase protection. I find maintaining a credit card to be more hassle and more intrusive than just using cash, but the benefits often outweigh the drawbacks. To implicitly pay the 1-2% credit card surcharge just because it's convenient would be absurd.

        • by houghi ( 78078 )

          So you get 56 days interest free credit. That is nice. However the store needs to include its price, so it will make the same amount of money. The customer pays that cost.

          Put it in another way. Creditcard companies make money. That money has to come from somewhere. The customer pays that profit.

          Credit card companies make money on two fronts.
          1) The swipe fees.
          2) People taking up the credit

          read some about swipe fees for some prices.

          See how many purchases you do with a card per month. Each purchase costs 21 ce

          • 1) 1% (min.) cashback plus up to 56 days interest-free is comparable to what large outlets pay in merchant fees;
            2) Anyway, I rarely get a discount for not paying by credit card;
            3) In the EU, at least, where card usage is more common, cash handling fees may be significant;
            4) There is no unform fixed fee per credit card transaction here - it depends on your bank, volume, specific negotiations for larger stores, etc. - for small stores, I'll ask what they prefer;
            5) For nontrivial items, the card provider is jo

            • by Teun ( 17872 )
              Card usage may be common in parts of the EU but it's typically Debit Cards.

              Like here in The Netherlands it's hard to find a regular store that would accept a credit card because of the 3-4% charges they would incur.
              There even are a few stores that will not accept cash because the handling of and security for having cash is costing more than the easy transfer from a debit card.

              Over here you need to be exceptionally dumb to not pay off credit on your credit card by month's end, the interest is criminal so

        • Good, someone else is making these points too.

          I know that the seller is paying a credit card fee, thus indirectly possibly raising *all* prices(*), but my purchase price is the same for cash or credit. So, after cash back, I'm getting it *cheaper* and *more conveniently* than via cash or check.

          (*) I'm wondering if not having to deal with cash saves any merchants enough to wipe out the credit card fee. Also, gas is the one time I see things priced differently, but counting the increased cash back in that c

    • Re:It seems that (Score:4, Informative)

      by platykurtic ( 1210910 ) on Saturday August 03, 2013 @04:23AM (#44464059)
      Uber's app makes the taxi process at lot nicer than anything the taxi process has come up with. With a taxi you're still usually calling and talking to a real person. Then maybe they dispatch a cab, and if you're lucky they find you and not someone else. More likely you stand there unsure about whether to keep trying to hail cabs or keep waiting for the one you called. With Uber, you have a map of all the cards in your area and an estimated arrival time. When you reserve one, you have a car devoted to picking you up; they won't stop for anyone else. You can watch them via gps so you know what's going on. The payment goes through your credit cards so there's no fiddling with change. Uber also has nicer cars and UberX costs about the same as a cab, although how sustainable that is is up for debate, since they may be skimping on insurance. The laws here are still being worked out. Of course, this is the situation in SF, where taxis suck. As you'd think, Uber isn't catching on as well in places where the taxi service is better.
    • Re:It seems that (Score:4, Informative)

      by Dambiel ( 115695 ) on Saturday August 03, 2013 @06:16AM (#44464347) Homepage

      1) Currently in San Francisco uberX (their lower-cost, non-town-car service) is cheaper than a yellow cab and, unless you live at a Caltrain or BART station, far easier to find.

      2) If you were to reserve a ride with a cab company directly there's very little accountability for how long it will take to get a pick-up. All of these apps let you to see where your driver is while en-route and allow you to give feedback regarding the level of service received.

      That adds a lot of value for me on top of the fact that I don't have to wait on hold.

      • by Guspaz ( 556486 )

        All of these apps let you to see where your driver is while en-route

        So do regular taxi cab apps from the taxi company. If uberX is cheaper, that's all well and good, but if they're not, doing the same thing as a normal taxi company isn't an advantage.

    • because reserving with a taxi is often a pain in the ass, you have no idea where the cabs are and/or if you're going to be waiting if you're in a hurry, and you want to guarantee that you can pay by credit card without getting weird hassling from taxicab shenanigans. That's 3 things off the top of my head.

      there are plenty of valid reasons.

    • NYC it is
      Cabbies don't want to take you outside of manhattan or anywhere there won't be a return fare

      Ãoeber won't solve that problem

    • by Anonymous Coward

      Uber is rather pointless. Why would someone go through a 'middle-man' app, thus incurring a surcharge, when they can just reserve with the taxi company direct?

      Those calling Uber "pointless" have never lived in a city with poor cab service.

      In Washington, DC, for example, I use Uber over cabs many times (even to hail a Uber-participating cab than a black care). The cabs in DC are notoriously bad- they won't take you to certain neighborhoods, will refuse service if you're black, may not show up if you call ahead for an early morning airport run, drive around in circles to inflate the fare, and don't take credit cards and may not have change. One time, I had a cab

    • by Zebra_X ( 13249 )

      Uber is rather awesome, actually.

      #1 - No money exchanges hands.

      Boston cabbies are some of the rudest businessmen on the planet. Many times they pretend their card readers don't work or make their customers feel awkward for paying by credit. It is extremely frustrating and in today's world of connectedness there is no excuse for not being more "normal" in handling everyday business transactions. Outside of Boston many cabbies don't take cards at all (despite having a card reader in the cab). Personally, I do

      • by paiute ( 550198 )

        If you ask a cabbie about this they will tell you that the cab company (the middle man you don't see) takes some 5-10% of their fare if you use a card.

        The Boston taxi rates were raised a few years ago specifically to cover credit card fees and drivers still will bullshit you about their card readers being broken.

    • uber. use app. get information on when your ride is coming and where it is now. There is no haggle over price, no need to have cash, and no decision on a tip amount. Overall experience: A

      taxi. call. wait. no further information available. Some take credit cards, others not. There's always an issue of how much to tip. Many drivers spend the whole ride on the telephone even when asked not to. Overall experience: D-

      In my area, taxi service is poor. I've waited up to 45 minutes for a cab. I've never

    • People use and like Uber because taxis are just so bloody awful. Reserving or summoning a cab by calling the cab's dispatch number is a crapshoot at best, and more often an exercise in futility. And if/when a taxi will deign to pick you up, as often as not the cab will stink of vomit or cigarette smoke. One cab company here even has a bed bug infestation in its cabs recently.

      I don't use Uber often. I try to plan things out so Muni will suffice. But when I do, the Uber car I summon shows up when and whe

  • by Anonymous Coward on Saturday August 03, 2013 @03:16AM (#44463893)

    Why aren't they making billions immediately? This is an outrage!

  • by crafty.munchkin ( 1220528 ) on Saturday August 03, 2013 @03:16AM (#44463895)
    And it was $75 to go a distance I'd previously been in a taxi for $35... it was a nicer ride, but way too expensive to use regularly.
  • I either drive my car, take a bus, or schedule a pickup using the cab service website. About the only time when I do an impromptu taxi ride, it is fixed rate downtown and the taxis are everywhere.

    So what is the advantage of a hailing program for a phone? Is it like the food delivery service for outlets that don't have delivery? I suppose that might be useful in some areas, but I just walk down a few blocks and get the food.

    This really seems like the tech bubble all over again when a sock puppet was go

    • by arcite ( 661011 )
      The funny thing is, the Taxi companies could easily implement their own Apps to automate the cab hiring process, perhaps some are doing this already.
    • by Anonymous Coward

      Here in Sweden Uber is great. They are actually cheaper than all the other cabs in the nighttime. But more expensive in the daytime. But what's great about it here is that you don't need to pay in the taxi. Either you provide your creditcard info in the app or they will send you an invoice later. Sure paying in the cab isn't a real hassle but it's still a nice thing not having to do it.

      Also if you're travelling with friends that also have the Uber-app the bill is split among you automatically.

    • by gl4ss ( 559668 )

      benefit 1: you don't need to talk to call center people.

      of course it has less point if you can just walk outside and you have a taxi spot right there, but that is rarely the case.

    • Re:Explain (Score:4, Informative)

      by AK Marc ( 707885 ) on Saturday August 03, 2013 @06:11AM (#44464331)

      I either drive my car, take a bus, or schedule a pickup using the cab service website. About the only time when I do an impromptu taxi ride, it is fixed rate downtown and the taxis are everywhere.
      So what is the advantage of a hailing program for a phone? Is it like the food delivery service for outlets that don't have delivery? I suppose that might be useful in some areas, but I just walk down a few blocks and get the food.

      A number of places are hard to find cabs unless you are on the right street. It's even hard to get them to come by phone. If you call in a ride too short, but are too far off the beaten path, you'll not get a cab out, and any complaints will be met with complaints you weren't at the pickup site. But this service guarantees pickup. That's a greater value than calling in a pickup. I've personally been stranded more than once. I wasn't far off the beaten path for one, so I stopped calling in from that location, and instead walk to a nearby hotel, where there is always someone waiting. But with this, if it covered where I live now, I'd use it for all trips in that area.

    • by Dambiel ( 115695 )

      Amazon's is hardly a comparable business model so we'll look past that straw man. Uber is already profitable in most cities so, as a business, it kinda makes sense.

      Don't know where you're from but having recently moved to San Francisco from Boston it's not very likely in either city that you'd be able to hail a cab on the street save for at major transit stations. The value of this kind of service is to get a ride quickly, easily, and with a reasonable expectation for the level of service provided. Here in

  • How hard is the regulation? Is there room for competition?

    If the regulation prohibits competition then that's the real problem.

    • As Tom Slee pointed out: There isn't one big taxi cartel controlling regulation from Aberdeen to San Fransisco. Taxi companies, like B&B (which Airbnb plays Uber's role for) are typically small scale operations.

      Yet everywhere, from Aberdeen to San Fransisco, Taxi services and hosting services are regulated. Why is that? If it was just regulatory capture, don't you suppose there would be ONE municipality somewhere where it wasn't regulated, where it worked great, to serve as a beacon for would-be deregul

      • Just google "unregulated taxi" and you'll quickly realize the prevailing opinion being spouted about this topic. Too many people talk about this topic without any evidence, or even any consideration for the lack of evidence. I just read this really funny one from someone who professes to being a manager at a taxi company. I could hardly stomach it:

        Big bucks lobbying
        With public relations and lobbying efforts fueled by hundreds of millions of Wall Street dollars, these new app companies want to pummel the
        • You did not answer my question, and your idea of freedom is too simplistic to be useful. Even in simple games, it's sometimes better to not have an option than to have it, and as soon as you include any notion of information and information asymmetry this:

          For every thing I'm "protected" from, I have my freedom reduced.

          goes down the drain fast.

          Taxi drivers aren't powerful. They certainly aren't more powerful than the kind of people they commonly drive. If lack of regulation served taxi customers, why is it

  • Since the only time I am hailing a cab is if I'm smashed, based on past experiences the last thing I should be doing then is using an App on a smartphone.
  • I'm from Wisconsin and I visited LA a bit ago. I soooo wanted to hail a cab but nope, someone told me that's illegal. WTF?! They said too many cabbies are getting robbed. Whaaaaat? So instead you call them from any untraceable or spoofed number, tell them to meet you in a more opportune dark side alley in a bad neighborhood for a pickup, and then definitely don't rob them. What kind of idiot made that law that now makes us use services like Uber? I'm glad I live in a 100,000 person city. Okay, so we

Adding manpower to a late software project makes it later. -- F. Brooks, "The Mythical Man-Month"