With a Start-Up Company, a Ride Is Just a Tap of an App Away
"Uber, a start-up based in San Francisco, offers a cellphone application that is aimed at making using a car service quick and painless.
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"Uber is not a taxi or limousine company. Instead it operates as a dispatch service, working with local owners of licensed private car companies. Uber provides each car with an iPhone and software that manages incoming requests. When an Uber user needs a ride, the dispatcher and the closest car are notified, and the system sends back an estimate of the pick-up time. While they wait, users can monitor the car’s location on their phone."
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"Uber, which is available for the iPhone and Android devices, requires users to enter their credit card information when they sign up. When they reach their destination, they can simply hop out, and the ride is charged to the card. Uber gets a percentage of each fare; the rest goes to the car services and drivers."
Friday, May 27, 2011
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The business model is pretty clearly based on regulatory arbitrage. San Francisco limits entry and imposes price controls on taxis and limos (http://www.sfmta.com/cms/xhome/hometaxi.htm). Uber claims that the minor differences in its dispatch and payment systems makes it exempt from these rules, and that's where its value-added comes from. I don't think the regulators and the incumbent medallion owners will let them get away with it for long.
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