Death to Cabbies!

Uber DL 001

The bulk of the audience at last night’s government information meeting was made up of taxi operators. Operators are usually not taxi drivers, though they might take the occasional shift. They own the cab (or more usually cabs) and either own the taxi plate or lease it.
One chap pretty well dominated the meeting. He had been in the industry for decades, by the look of him, and he reckoned he’d done his sums.
“There’s a 5% drop in taxi fares, 15% more taxis you’re putting onto the roads, and now Uber will have 30% of the market,” he said. “That’s a fifty percent drop in the taxidriver’s income right there.”
I thought about this. I could quibble with the figures a little, and I wasn’t sure that it worked out to cabbies earning half wages, even if the numbers seemed to add up that way. The 5% drop in fares looked to be solid, but even if the government made 15% more taxi licences available, that didn’t mean that they would be taken up. Uber would certainly be taking a chunk of the market, but it might well carve out a considerable market of its own amongst the smartphone generation, judging by what had happened in other cities.
All in all, if cab fares work out to be 5% cheaper, and UberX fares another 10% cheaper still, then it might well be that the overall passenger market will increase.
But this chap was on a roll. He was on a roll for pretty much the whole two hours, actually. He reckoned that cabbies wouldn’t want to work for half the already miserable income, and that if Uber entered the market, that would see cabbies forced off the road completely.
I’ve attended a few of Uber’s public meetings, where they explain the concept to prospective drivers, take names and copies of documents, and show a video or two. 90% of the audience were cabbies, in my estimation. Now, I don’t know every cabbie in Canberra, but there’s a certain demographic nowadays. Young men, born overseas, east of Turkey and west of Singapore.
After those meetings, the cab ranks outside seemed more like a social club than a battlefield. I think I’m on firm ground in describing the two sets of existing taxi drivers and prospective Uber drivers as mostly intersecting. Let’s just say that it’s not local Canberrans who are itching to drive for Uber.
I’m guessing that the average cabbie doesn’t see Uber as a major threat to his income. There’s always going to be a certain passenger market. People without cars, people having had a few drinks, tourists, the disabled and so on. Those people aren’t going to disappear. If anything, there are likely to be more of them if overall fares come down.
And there’s going to be drivers to drive them around, whether in a cab, or in their own cars. Let’s face it, driving a cab isn’t exactly rocket science, especially in the age of GPS. It’s easy money and not a lot of work.
Now, I can understand the frustration of those owning cabs. As one put it, a cab costs $60 000 annually, just sitting in the garage. Licence fees, equipment, depreciation, insurance, inspection, service fees (to the taxi companies who supply radio bookings) – it all adds up, and any drop in profit could well make the whole deal run at a loss. The owner splits the fares with the driver 50/50, so a cab has to earn $120 000 a year – or well over $2 000 a week – before there’s a single cent of profit.
Owners will have to figure out ways of handling the new rules, that’s really the bottom line. Maybe they’ll just strip the cab of its equipment, stop paying the taxi insurance, licence fees, and service fees, and hire it out as an Uber vehicle. Maybe they’ll become a rideshare operator themselves.
But the playing field is changing, that’s for sure.


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