More and more people are using Uber to get around town, an app that allows consumers to know the cost of a service before they even order it. But just how much has the Uber wave affected the traditional taxi business?

Popularity of Uber

Before we look at the impact on the taxi industry, we first need to understand why Uber has captured the imagination of consumers. As the introduction stated, one of the biggest benefits for customers is transparency. In the modern age, consumers need information, and this is exactly what Uber provides.

If you haven’t used the app previously, customers simply type a destination, and the app calculates the cost of the ride. Before confirming anything, customers see the distance, duration, and estimated cost. From here, they can either cancel or continue. If they continue, the app then pairs them with a driver.

Once again, transparency is key. The app allows customers to track their ride and how far away the driver is from the customer’s location. One of the most frustrating things about calling a taxi is that you don’t know how far they are away at any one time. They could be around the corner, or they could be 20 minutes away. Uber allows customers to have access to what was previously behind the scenes, and this includes driver location.

Elsewhere, Uber is also popular because customers can choose the service they desire. They can choose between a standard ride, a luxury ride, or even a ride-share opportunity (this splits the fare between all riders).

Of course, who could argue with the convenience of Uber too? It takes one second to open the app, a couple more seconds for Uber to find the destination, and a similar amount of time to pair the customer with a driver. Customers then see the driver’s name, the vehicle, and even the registration plate.

Impact on the Taxi Business

With an understanding of why Uber is so popular, it perhaps explains why the taxi business has struggled against this tidal wave. Taxi businesses don’t have the same convenience and they don’t have the same transparent features as Uber. Old-school taxi services still don’t have an app; they require customers to phone a number and request a taxi. After calling, it’s a trust exercise that the taxi will arrive quickly. There’s no way to track this driver unless you call again, but even this is an inconvenience.

With new competition like iChauffeur Melbourne, on the rise, taxi companies have been forced to innovate if they want to keep hold of customers. While taxis were once in a monopoly, they’re no longer alone. Taxi companies have launched apps at the speed of light just to keep up with Uber.

Another way that Uber has disrupted the taxi business is that it has opened the door for other new services. While it might not have affected the luxury chauffeur services, which will always demand attention, it does mean that apps can enter the market and offer simple lifts to customers around town.

Taxi services must work harder to keep customers happy and to survive in the evolving environment. As well as reconsidering technology, many customers have noticed a drop in price for taxi services.

According to statistics from Roy Morgan, over 20% of the Australian population used Uber regularly in 2020. Estimates now suggest that Uber and similar apps will overtake traditional taxi services in terms of market share. Therefore, it’s fair to say that Uber has disputed the taxi business hugely. Only those willing to reconsider their approach and invest will survive!