Uber - a benefit or a drawback?

(Baonghean) - Uber is no longer unfamiliar to many users of public transportation services in major cities around the world, including Vietnam. Besides its convenience and competitive pricing, Uber's operations remain controversial...

What is Uber?

Uber is the name of a technology company that provides online transportation services worldwide, headquartered in San Francisco, USA. Uber's operations revolve around an application of the same name installed on smartphones.

Using this app, users can submit a request for a ride they want to a nearby driver who will accept the ride. Uber drivers use their personal vehicles, and driving for Uber is considered a flexible job.

The app calculates and displays the estimated fare, driver and passenger locations, and route on your phone. As of August 2016, Uber's service was available in 66 countries and 545 cities worldwide. Uber's business model has become a trend called "Uberification," meaning the sharing economy, a trend that many other companies have adopted.

Uber drivers use their personal vehicles and participate in transporting passengers actively and voluntarily. Photo: Theguardian

Why is Uber so successful?

Officially launched in 2011 with an investment of $44.5 million, Uber's value has now reached over $50 billion. Besides its technological superiority, Uber offers users conveniences that traditional taxis cannot provide.

Instead of relying on the driver's route and the meter, this app allows users to know the cost of their trip and their route in advance. In addition, payment is supported through various methods such as cash or direct deduction from a credit card, requiring no further action from the customer.

Uber doesn't allow hailing a ride; it requires users to go through the app, making the service accessible to everyone with fewer rejections. According to Bloomberg, Uber makes it easier for the poor to get a taxi.

This service is pre-installed on mobile phones.

At the same time, by locating both customers and drivers, finding pickup locations becomes easier, especially in challenging weather conditions. The company's service also helps reduce traffic congestion as Uber drivers don't have to drive around looking for customers. Uber allows users to rate drivers after each trip using a rating system.

Uber employs an automated algorithm to increase prices during periods of high customer demand. This "price increase" attracts more drivers and reduces the number of customers requesting the service. Naturally, this faces customer resistance due to the high prices during peak times such as holidays or unfavorable weather conditions. However, according to Uber CEO Travis Kalanick, "...

This is something completely new; it will take some time for people to accept it. Fixed-price taxis have been around for the past 70 years. In fact, raising prices when demand increases is in line with economic principles; it motivates drivers to participate in transportation, and only customers who truly need the service will use it.

Furthermore, this company also creates competition with traditional taxis, indirectly improving the quality of passenger transport services in general. Uber, along with other technology companies, creates a transport market with more supply for customers, reaching even the suburbs of major cities. Besides Uber, the company is developing other services such as self-driving taxis, helicopter taxi services, and UberPop, an application for people who want to share rides.

Uber's problems

Despite its benefits, Uber has faced significant criticism. Protests against Uber by taxi drivers and legal actions by governments to block the company are taking place worldwide. Opponents argue that Uber engages in unfair competition by facing fewer legal burdens, taxes, and licensing fees compared to traditional taxi companies.

In addition, the quality of drivers, passenger safety, and workers' rights at Uber have also been criticized by those who do not support the company. Protests by traditional taxi drivers have taken place in Germany, India, Spain, the UK, Canada, Italy, and other countries.

Traditional taxi drivers blocked an avenue in Jakarta, Indonesia, to protest against Uber.

In 2014, this technology company faced bans from courts in countries such as Spain for unfair competition, and in India over allegations of a driver raping a female passenger. In the Netherlands, the company was banned from its UberPop service for transporting passengers without a license. Most recently, in Vietnam, the Ministry of Transport reminded Uber to register its business in accordance with its registered business activities.

The battle between traditional taxi companies and ride-hailing technology companies is far from over. Uber continues to pursue legal action. Despite numerous obstacles, the company has attracted significant investment. Last June, Saudi Arabia invested $3.5 billion in the company, and Toyota, the world's largest automaker, agreed to partner with Uber by facilitating the hiring of Uber vehicles by its drivers.

Phan Vu