Taxi Federation takes aim at Uber, again, but the business model is still the problem

The Taxi Federation’s grip of the market in New Zealand will eventually fail unless they provide an alternate service in competition. Further, Uber itself has a limited opportunity within New Zealand as other providers prepare to enter the market with similar services. Rather than adapting to that new business model the Taxi Federation continues to attack Uber around the “safety” of the service, but are they right?

The federation’s major concern is the impact these unregulated services could have on safety in the small passenger service vehicle (SPSV) sector. – Source

So let’s look at the side by side safety features of a “standard” taxi versus Uber.

The Taxi Federation says that Uber does not have cameras.

While there is not a requirement for Uber drivers to have a camera they often do as they usually moonlight with Uber as well as working as a Taxi.

The Taxi Federation asserts that “If you have a complaint about drivers and their services, don’t come to Uber. Go straight to the driver who provides the service as it’s not Uber’s problem.”

This is interesting because I have had cause to complain three times in the past and I have always been contacted by Uber the company to resolve the issues. Others I know have found the same.

“Uber would argue their system is safe because everything is booked via an app, with passenger and driver clearly identified. However, people don’t always behave appropriately. An app doesn’t provide the deterrent an in-car camera does to inappropriate behaviour and certainly doesn’t provide the evidence required to remove/convict the offenders.”

I disagree. The App is hard to trick, now, in one case, where I complained, it was clear that the driver of the Uber was NOT the same as the ID that appeared on my phone when I booked it. I didn’t get in the car, complained, and the complaint was immediately resolved.

Uber drivers must go through the same vetting process that any commercial driver has too. In addition, I have a record of the driver’s ID, they of me, I have a record of the route, and I can send that route in real-time to my wife at home so she knows that I am on the way and exactly where I am. My wife will send me her travel when she gets into an Uber.

The cars must be of a similar standard.

No cash changes hand in the car. This certainly better protects the driver.

I think that in some cases, the driver is likely far more qualified and potentially trust worthy. They are limo and high-end private drivers that service government and other organisations.

The chance of a driver “bad behaviour” or passenger “bad behaviour” is lessened. Both driver and passenger are ranked by each other, anonymously, at the end of every trip. I know that both drivers and passengers have had access to Uber cut off once a certain threshold has been reached.

Is Uber the be all and end all? No, absolutely not. It concerns me that all that money is pouring overseas to an International company when a New Zealand company, like the Taxi Federation, if it chose to get off its backside and deliver a similar service, could keep it in New Zealand.

Uber corporate has far too much control over the service in my opinion. In France, when the taxi drivers got out of control recently and burned Uber cars, Uber pulled part of the service for the country. They literally switched it off remotely leaving thousands of drivers out of job instantly. That kind of power needs to be regulated.

Some of the drivers complain about the fact that Uber is planning to take a greater percentage of fares and that the original inducements, such as a free phone, are gone. That is classic market breaking stuff.

Uber themselves are rumoured to be losing money by the hundreds of millions as they make their way into global markets. If that is true, it will not be sustainable in the long-term.

They have shown their willingness globally to lobby government, like it or not, and in New Zealand seemed to have successfully done the same.

For most Uber drivers, it is a sideline affair. Being regular taxi drivers when they have down times they switch on and take Uber work.

Uber’s time in New Zealand will come under threat with other similar services rumoured to be coming to the New Zealand market. Competition is likely to drive prices further down and eat more into that traditional taxi market. Uber has the market to itself at the moment, but that won’t last.

Uber is now targeting government and business with new packages. Again, the advantages to business are good. They get a rolled up administration pane of their staff taxi usage, in real-time.

The Taxi Federation for some reason will not invest in similar technology and they could certainly afford to. The writing really is on the wall. There market share will fall unless the join that business model and offer the same service to the customer base.

After a year, the best argument they can still come up with, is safety, and yet, in my opinion this is not a point of difference at all.

Ultimately, consumers will go with the cheaper service, and with Uber anywhere between 15 and 20% cheaper, they will win on cost alone for some time yet.

And for customers that want to pay more for a better service, Uber Black is coming to Auckland shortly.


  1. So here’s the thing. If Uber win and become the service hub of choice in New Zealand. Then with the coming levels of automation, any money spent on services will go straight into Ubers bank account essentially bypassing the New Zealand Economy altogether. Add Self drive cars into the mix and that is a loss to the NZ Economy of 95 Billion Dollars. That turns the NZ economy into the equivalent of Greece. Uber know this but they don’t want you to know this. So who really win s if Uber wins? Well just Uber.

    As for their drivers
    “They are limo and high-end private drivers that service government and other organisations”. No they are not. Who told you this? Uber?.
    The vast majority of these drivers are drivers who have been booted out of other companies. In other words their ethics and standards are not high enough to make the grade in a regular cab company. But again Uber don’t want you to know this. In fact it is even evidenced by the time3 the author went to get into an Uber and the Driver wasn’t the person on the photo. Just goes to show what a little bit of slick marketing can convince an unsuspecting punter of.

    Add to this the fact that Uber have already raised their fares in Auckland in order to compete as their drivers couldn’t earn enough to survive. . Add to this the fact that Uber have disabled their Auckland Twitter account because of the number of complaints they were getting.

  2. @Tim, that’s why Ian is asking why the Taxi Federation isn’t trying to beat Uber at its own game.

    You’re looking at the cost to the taxi industry without considering the benefit to the economy that a cheaper, easier, more reliable (in my experience) and more auditable personal transport service brings. The NZ economy won’t lose $95B; I would counter-argue that a significant portion of that $95B will be spent on more productive things than just getting from A to B. And you’re assuming that Uber will somehow hold a monopoly on the market once both traditional taxis and private cars have largely disappeared and we all use on-demand self driving car services instead.

    I agree that it’s a big stretch to say that uber drivers are all limo and high-end private drivers – but equally that they’re all failed taxi drivers! Neither of you have shown figures so I’ll go with my experience of moonlighting current taxi drivers and private individuals in often pretty nice cars – nice enough to indicate that Uber is a second stream of income. The current taxi drivers talk about lower rates to them but far higher utilisation, meaning they make more money with Uber than with their taxi company.

    So in short, taxi companies must innovate or die. And the $95B you talk of (I assume that’s the current taxi revenue) isn’t a benefit to the economy, it’s a drain on it that should be minimised if it can – preferably by New Zealanders innovating, reducing margins, and keeping the money here. But not by protecting a legacy model of service. The time to change is now.

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