The case for Uber using taxis

Uber, which recently launched in Ghana is using taxis and some customers are not too pleased. A video which went viral on Ghana twitter purported to show an Uber driver in a taxi.

Surprisingly, some people have a problem with this supposed development. I would support any move by Uber to use taxis as I think that it makes sense for Uber, for taxi drivers, for customers and for the economy.

Good for Uber

Using taxi drivers gives Uber access to experienced drivers with knowledge of the shortest routes. Taxi drivers are also more likely to drive fulltime and not use Uber as a part-time income supplement. As an occasional user, it gets frustrating waiting for a ride to arrive while dozens of empty taxis drive pass. Using taxis will ensure that users of Uber will always have rides when they are looking for it.

The primary concern for many cities across the world in which Uber has launched is the potential loss of livelihood of taxi drivers who are the natural competitors of Uber and other ride-hailing apps. I think it is only a matter of time before taxi drivers organize and seek to apply political pressure on Uber. Using taxi drivers will reduce the likelihood or the impact of such a development.

Good for Taxi Drivers

For taxi drivers at risk of losing their primary source of income, driving for Uber will be a better alternative to leaving the transport industry altogether. Using Uber also ensures that they can switch from Uber to regular taxi at will, allowing them to serve both Uber customers and regular customers. The demand for their services would increase and they will burn less fuel in looking for customers.

By being able to compare the income from Uber with their regular income, they would be better informed to make a decision about their career prospects. The skills they will learn in using GPS navigation wouldn’t hurt either.

Good for Customers

We get the convenience, standard pricing and security of Uber with more experienced drivers, shorter waiting times and better traffic-dodging skills – what is not to like about this? As I believe Uber only allows post-2000 model cars, comfort will not be sacrificed.

Good for the Economy

I do not think it is in the interest of the country for Uber to become a monopoly. From using Uber, I see that prices are usually about 20% lower than what I pay for taxis. But let’s not forget that Uber’s losses are in the range of $1.6 billion. This could mean that there are undercutting the competition in order to gain market share and then raise prices in the future to reward their investors. And as more people use Uber and other players are literally driven out of the transport sector, there would be little alternative.

Driving for Uber gives taxi drivers one of the most important tools that ensures competitiveness in the market – information. Taxi drivers would be well-placed to compete with Uber if it tries to raise prices significantly above the cost of operation. This ensures protection for the free market and the consumer.

In the meantime, driving for Uber will force taxi drivers to renew their licenses, pay their insurance premiums and vehicle taxes. This will ensure greater revenue for the DVLA. Using taxi drivers will also prevent people whose time could be employed in more productive ventures from considering driving as a career or side-job.

Think of the fuel savings as new drivers will not waste fuel replicating services already provided by taxi drivers. Taxi drivers will also not waste fuel looking for customers as they will have requests waiting.

 

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Jerome Kuseh

Accountant | Economist-in-Training | Private Investor
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12 comments

  1. I haven’t used the Uber Services yet. I have heard the arguments for and against. To add to your point, if my understanding is correct, Uber taxi services isn’t across all hoods in Accra. using taxis means they will cover more areas within the region.

  2. I haven’t used the Uber Services yet. I have heard the arguments for and against. To add to your point, if my understanding is correct, Uber taxi services isn’t across all hoods in Accra. using taxis means they will cover more areas within the region.

  3. I haven’t used the Uber Services yet. I have heard the arguments for and against. To add to your point, if my understanding is correct, Uber taxi services isn’t across all hoods in Accra. using taxis means they will cover more areas within the region.

  4. 2 of my last 3 uber rides have been with bi-colored taxis. I am definitely happy about the increased pool of cars. This however, also means a decrease in the quality of cars, there are very few taxis as clean as Uber’s original cars. One of my ‘Uber-taxi’ was a rickety car that I would not stop on a normal day.

    Beyond all of this, I am worried about the low fares for the taxi drivers. I hope the higher frequency of trips makes up for the low fares otherwise it may not be worth for most taxi drivers.

    • Uber should do better with the quality of taxis. With regards to the fares, they have little choice as they may lose their livelihood altogether. But I’m sure they won’t operate below the cost of operations

  5. 2 of my last 3 uber rides have been with bi-colored taxis. I am definitely happy about the increased pool of cars. This however, also means a decrease in the quality of cars, there are very few taxis as clean as Uber’s original cars. One of my ‘Uber-taxi’ was a rickety car that I would not stop on a normal day.

    Beyond all of this, I am worried about the low fares for the taxi drivers. I hope the higher frequency of trips makes up for the low fares otherwise it may not be worth for most taxi drivers.

    • Uber should do better with the quality of taxis. With regards to the fares, they have little choice as they may lose their livelihood altogether. But I’m sure they won’t operate below the cost of operations

  6. 2 of my last 3 uber rides have been with bi-colored taxis. I am definitely happy about the increased pool of cars. This however, also means a decrease in the quality of cars, there are very few taxis as clean as Uber’s original cars. One of my ‘Uber-taxi’ was a rickety car that I would not stop on a normal day.

    Beyond all of this, I am worried about the low fares for the taxi drivers. I hope the higher frequency of trips makes up for the low fares otherwise it may not be worth for most taxi drivers.

    • Uber should do better with the quality of taxis. With regards to the fares, they have little choice as they may lose their livelihood altogether. But I’m sure they won’t operate below the cost of operations

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