New challenges for Uber

Recently Uber entered the scene and gave a hard time to taxis drivers. Price competition is undeniable. But where Uber was not stopped by regulations, it created great jobs opportunities. The public opinion is divided between who is in favour and who is against Uber. While the European Parliament in a short analysis for the Transports Committee with some researches and literature on economic and social consequences of Uber.

REUTERS/Shannon Stapleton

Uber’s social impact

Uber, SideCar, Lyft , so called Transportation Network Companies (TNCs), they are innovative business models of sharing economy, that means people share goods and services by using Internet platforms and  ICT applications.

Obviously Uber contributes to reduce costs and speed up the search for a taxi . Regarding quality and prices the drivers are rated by consumers and may be removed from the system if their rating falls below a certain threshold. Prices of the rides are estimated beforehand and can be easily compared across several applications, introducing greater transparency, something that taxi regulation attempted for years by requiring taxis to publish their price lists inside and outside of the vehicle. In a long term Uber and other similar transports could reduce the number of private cars with economic and health advantages. Nowadays, according to some studies, the trend is still the predominance  of private cars and the consequent traffic congestion, Uber could change this tendency.

Recently there have been introduced also other transport systems like car-sharing, car-pooling, peer to peer transport.  In this context Uber represents a complementary solution for mobility.

A recent study commissioned by Uber claimed that peer-to-peer transport services in Stockholm could reduce by 3% daily car journeys and reduce by 5% the total of active cars in the city.

However, a great number of protests have blocked this service in many countries. Taxicabs employ more than one million of people in Europe and represent 8% of employment in the European transport sector .

The impact on traditional taxi-drivers has been quite dramatic: in San Francisco, for example, between January 2012 and August 2014 the trips declined by 65 %.

Uber became one of the fastest start-ups in the world with an estimated value of EUR 13 billion in 2014.

Lack of regulations and doubts

At the moment there is no specific regulation for Uber or other similar transportation companies.  In a recent resolution, last September the EP called on the Commission to monitor the Uber situation in the different Member States and take relevant measures or recommendations for developing innovative new services in Europe, taking into account the consequences for existing taxi services.

According to the report, the main challenges to face are: Uber and other TNCs may unfairly compete with taxi drivers by entering their market without following regulations or fare schedules; they may aspire to become monopolies; TNCs´ cars or drivers could be unsafe or underinsured; Uber and other similar companies may invade customers’ privacy;  they may enable discrimination by drivers and passengers; TNCs may undermine working standards for taxi drivers and offer drivers poor compensating; they may present challenges related to taxation.

@IreneGiuntella

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