San Francisco-based Uber Technologies Inc. took the transportation industry by storm when it released its groundbreaking ride-sharing app in 2009. The app, available for Android and Apple iOS smart devices, connects riders with nearby screened drivers who provide rides in their private, late-model vehicles; riders pay competitive prices for the service, which is cheaper than taxi fares in many jurisdictions.
One cold and snowy evening, StumbleUpon founder Gary Camp and his business partner Travis Talanick had trouble finding a taxi, which inspired them to start the ride-sharing company. Uber celebrated 1 billion rides with much fanfare on Christmas Eve in London. Although Uber has remained silent on the initial public offering (IPO) issue, its $62.5 billion valuation, as of April 2016, continued to fuel speculation of significant earnings for investors if the company were to go public.
Uber doesn’t publicize how many people use its app – one estimate speculates 8 million users – but enough enthusiasts have consumers and industry observers wondering why so many people choose Uber.
Fast Trips Any Time, Almost Anywhere
Many believe that the failure of taxi companies to transport customers to their desired destinations quickly enough is what allows Uber to thrive. When the companies blame the taxi drivers for being unable to pick up and transport passengers in a timely manner, the taxi drivers complain about the low fares customers pay for short-distance trips, creating a cycle of inefficiency for taxi companies. While wait times vary based on the number of cars available at a given time, Uber customers typically wait no more than three minutes for a ride. Riders have the option to share rides with others heading in the same direction through UberPool – the app’s ride-sharing feature, but they don’t have to. As a result, Uber customers typically get where they are going faster than they would by taxis and other public transportation methods.
Public transportation doesn't run around the clock, and not all taxi companies run 24 hours a day. People who are out and about after regular hours, such as late-night shoppers and second- and third-shift workers, often use Uber to get home quickly when bus and metro train lines are shut down.
Riders choose Uber over other transportation methods for safety reasons. The company experienced serious incidents in the past, such as drivers attacking riders, so Uber now requires all prospective drivers to submit to motor vehicle and criminal background checks. The company runs background checks that date back seven years, which includes a search of multi-state criminal databases, motor vehicle records and a review of the National Sex Offenders Database.
It may be difficult to persuade taxi drivers to pick up riders who have had too much to drink in obscure parts of town late at night. With around 1 million drivers in 300 cities worldwide, partygoers rely on being able to find available Uber drivers through their apps in the wee hours of the night. Picking up intoxicated passengers is not without its challenges, though; drivers have been attacked by rowdy passengers, and Uber drivers in India have access to a panic button on the Uber app to contact police for this type of emergency. Uber drivers operating in the U.S. have expressed an interest in having access to a similar app feature.
Avoid the Cost of Owning a Personal Vehicle
Consumers paid approximately $8,600 to own and operate their cars in 2015. Urban dwellers who do not own cars and have access to a range of transportation methods can also save money on the cost of a car by using Uber. These savings apply most to riders who don’t need cars daily but might need a ride for weekend outings and other special occasions.