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Are we about to turn a corner?

22 Jun 2017

 

 

After years of allegations aimed towards Uber it seems finally to have caught up with them.

It is often said within the taxi trade that Uber are a bit like Teflon; nothing sticks. However this last month has seen a barrage of negative stories hounding the controversial American transport, or should that be tech, company into submission.

Like most taxi drivers I have been pessimistic when hearing stories suggesting Uber are struggling. I'd rather believe it when I see it. However, there has been no shaking off the stories and no getting away from several huge issues being played out in the public eye.

So what are the key facts?

The big one for me is their burn rate of investors money. Uber have not yet found a profitable business model to return investors money. In fact it has been reported that Uber will burn through that entire investment credit within the next three years.

So does that mean we have to wait for three years before things will get better?

No not at all! Investors will not just sit back and watch their money being burnt at the current rate. There will be an attempt to change the business model and bring in something closer to a profit. How they do it is the big question. Currently 59% of each fare is subsidised by the generous investor. This will have to cease. So that only leaves Uber with two options; put up prices by 60% and/or push up the rates they charge their drivers.

If that happens Uber's edge has gone. It then becomes a straight battle on who can provide the best service for the same monetary value. I know who I would back in that scenario!

We have a big 12 months ahead of us. If we can hang in there as individuals and as a trade collectively, we will come through this mess a stronger taxi trade. We are the only part of the taxi and private hire industry that has a business model that works.

We're about to turn a corner... be ready for it! 

 

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