https://m.youtube.com/watch?v=JXt0lG3IRZQEdinburgh is in the initial stages of the arrival of an Uber service.
It is interesting to note the experience of other cities where Uber is well established and have attracted a significant market share specifically the reduction in drivers potential earnings allegedly going from $2.50 per mile at the introduction to attract drivers then reducing to $1.20 as they become established.
Price surging is another factor that will be new to the Edinburgh public and it will also be interesting to see the reaction if this is applied.
Uber and other App services tactics are nothing new. One example is supermarket chains that have been applying these tactics to squeeze their suppliers for many years forcing prices down to gain a larger market share.
The vacuum that the taxi trade has existed in for many years is gradually disappearing through the introduction of new technology
The ones that will survive are those who embrace this technology and rise to meet this App challenge through a belief and confidence in their own ability to provide a high level and reliable service
During the above video you will see a very smart driver extolling the virtues of Uber, the gentleman with beard. Later in the report it is mentioned that he is now on the picket line outside Ubers offices.
Edinburgh has seen both de-regulation and price wars before. There exists a very healthy competitive market already within the city balanced with one of the best standards in both vehicles and drivers in the U.K.
All the major Edinburgh companies in both the public and private hire sectors offer an App booking service to our customers allowing them to track their vehicles throughout the booking process.
The modern day App service that is being lauded as a revolution has been in use within Edinburgh for around three years.
What is new is the financial backing these companies have attracted through the funding by venture capitalists looking for a return from a potential global taxi business.
At the moment the emphasis will be on discounting to both customers and drivers to gain a market share. How long this can be sustained is the key question.
Many years ago we all fell into the trap for voting for the de-mutualisation of several financial institutions to gain a few hundred pounds in rewards. At the time everyone was clicking their heels in this new found wealth.
Fast forward 15 or 20 years and the few hundred pounds that was paid out to shareholders to buy them out has led to us all facing up to a several thousand pound shortfall in the endowment and investment policies in the hope it would meet the mortgage or provide a nest egg.
Different circumstances but same principles. The trade and the service users will offered short term incentives and discounts but over the longer period will be screwed over.
Before deciding if these App companies are the Edinburgh Taxi Trades saviour and before we rush out to sign up to these tempting offers perhaps we all could do a little research into their principles, pricing strategy and long term commitment to the well being of both their customers and their drivers and not just throughout the initial launch period however long the cut pricing tactic is applied for.
The story of how the supermarket chains have flourished and are now looking to reinvent their strategies as their profits are plummeting and how we were sucked into the de-mutualisation con all those years ago are just two examples of how the "super rich" continually manipulate the markets and how the small trader gets squeezed out.
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