For example, a couple of days ago I took an Uber. The driver that picked me up was a student. I asked him why he was driving, and he said, "Oh, well I came [to this city] to hang out with my friends, but they can't do anything for another hour. So I decided to do a few rides while I wait."
Uber was able to take the unused potential of someone just messing around in a city and use them to pick me up.
They are able to do that because they can watch everything that happens via the app. If someone tries to screw you over and take a long route if you're new to the city, Uber gives you a refund and the driver doesn't get paid. If the driver is driving like a maniac on bald tires while they talk on their phone, you can give them a low rating. Enough of those and they get kicked off of the service entirely. In other words, instead of an expensive and burdensome network of licensing and regulations, Uber was able to better regulate what was happening using technology.
The first time I ever took an Uber a driver came and picked me up, opened the door for me, gave me a water bottle and some candy, turned on the music I like, and was very safe and professional. And the whole thing cost less than a taxi. I haven't been in a taxi since.
So the app is the main attraction, but not because you can hail a car (though that's nice, especially when you're in underserved areas). It's because the app allows Uber to create a completely different economy around the supply and demand of ridesharing.
It would be a hell of a lot cheaper than funding lawyers and lobbyists like they have been.
Take one element of it - say the taxi companies said, "OK, you're now getting rated, and if you drop below 5 stars you lose your medallion." Drivers would lose their minds.
Imagine them saying, "Also, now your trips are going to cost 50% less" again, would not fly.
Or even, "You can use your own car, because that's way more efficient" (would never happen, because taxi drivers rent their cars for $40,000/month).
The taxi industry has done a hell of a lot to entrench itself and make itself irreplaceable, no matter how awful it is. In doing so, it has created a system completely resistant to change and innovation. The industry was ripe for someone to come along and replace it with a parallel system that was better and more efficient.
Where is that figure from?
In my experience in a number of US cities, these apps get terrible reviews in the App Store/Google Play because they're borderline unusable. They often don't have all the features of Uber and Lyft, like letting you track the cab while it's on its way to you or even handling payment through the app, and they're often poorly designed and even prone to crashing.
My guess is that cab companies want an app that will feed into their existing dispatch workflow, with the limitations that entails. They probably also have no experience picking IT vendors, negotiating with them or evaluating apps.
Also, lots of local cab company owners and medallion holders are probably skeptical that they can compete or profitably do business with a worldwide, hypercompetitive billion-dollar taxi company. It's not easy running a local discount store when Walmart opens across town, but it's not necessarily any easier for a small supplier trying to sell through Walmart.
Looks like an opening for some very profitable startup :)
I badly broke my leg and, because I lived too far from public transportation to crutch over, had to take taxis to work 4-5 times a week, often both ways. No taxi company in sf will reliably come, even if you make it clear that you are going to take a cab at least 4 days a week for most of the next year. Instead, even when you are in the middle of the mission in a relatively dense location and going to soma, dispatch simply lies and says "10 to 15 minutes". A 95% wait time was 3 hours, and a 85% time was 1 hour 15 minutes, for what should be an approximately 15 minute drive. Even simple requests like calling a couple minutes before the taxi arrives so I could get down 2 flights of stairs on crutches without detaining the driver or having the driver leave couldn't be followed. Needless to say, this causes significant disruption to your life when you have to leave 90 minutes plus the length of the drive before going somewhere if you want to have any hope of reliably getting there on time. And god forbid you have to see your surgeon or something else with a hard deadline. The taxi services should be ashamed of themselves, and frankly participated in a violation of my civil rights as done by a quasi-governmental monopoly. And there are other issues: when I would occasionally have to pay with a card, the meter would suddenly be broken until you made it clear drivers had two choices: call the card in or not get paid. A fucking miracle would occur, and the card reader would start working. The taxi system literally shat on their customers.
The advantage of uber is simple: when requested, they either come, or say they won't. That allows you to be an adult and either make alternative arrangements or tell the other party you'll be late. I used uber even when they cost 2x as much as a cab just for this reason.
In conclusion, fuck taxis. Also, fuck sf. Only in sf is "a taxi that comes" a disruptive service.
To me requiring a special kind of driver's license to transport passengers makes a fair amount of sense iff it's reasonably easy to get.
Uber doesn't require that for UberX, which is the main point of conflict in many of the trials Uber lost over here.
Class A license - certified to drive tractor-trailer trucks.
Class B license - certification to drive non-tractor trailer multi-axle vehicles; kind of an amorphous collection, but think buses, large commercial panel trucks, dump-trucks, highway plow trucks, etc.
Class C license - any kind of normal passenger automobile.
What I find interesting about Uber, and the backlash against it, is that it is largely just a scaling of under-the-table, unregulated behavior people have always indulged in. What, really, is the difference between calling up your circle of friends and acquaintances, asking for a lift somewhere, and throwing them some cash for gas money and their time, versus using Uber? They are evil because they enable you to search a wider network then just your personal circle? Or because they take a cut for providing a reliable, safe, centralized payment service? Or because they have enabled a market that competes with a rent-capturing incumbent, and the product they provide is cheaper, more convenient, and higher quality?
With that said, I have to nitpick a few things:
1) This is a problem in many U.S. cities besides SF.
2) Uber has also shown a bizarre reluctance to deal with advance, regular booking. One employee even insisted that it would be anathema to Uber and against everything they stand for. Even though it would a) be trivial to implement, b) let them know of hails sooner, and c) give them greater knowledge of request patterns.
No, not making this up: https://www.quora.com/Why-doesnt-Uber-allow-customers-to-pre...
By law, I still have to use a taxi when returning from the airport here in Seattle (as opposed to Uber). I have had perhaps 2-3 positive experiences, some neutral ones, and many bad experiences with rude taxi drivers on their phones who drove erratically and tried to scam me with overlong routes.
And up until Uber and others arrived, they would either try to make me feel like shit for paying with a card, lie to me about it not working, or they would use carbon paper card readers circa 1985. Uber forced them to modernize in that respect, at least.
They've been doing it for a while -- this app used to be Taxi Magic. It's slower to respond than Uber, and more expensive.
Uber did start the shift to using apps instead of hailing or calling cabs. Now, the idea is in the "fragmentation stage" with the early adopters, where everyone and their brother has developed a different app. Once some of the underperfomers fade away, there will hopefully be more centralization when late adopter customers start using this market.
No accountability or recourse in traditional cabs.
So the incentive isn't only the app, its also prices. There is a lot of lobbying being done here on the part of Uber and the cab companies have already staged a few demonstrations. Will be interesting to see how this plays out.
The cab system is an entrenched monopoly with a lot of inefficiencies and people stealing value along the way.
Being able to lie on the phone and say "the cab is 15 minutes away!" when it's going to be half an hour is a feature, not a bug - for the industry. It's the equivalent of asking reform from the music industry or Hollywood - not going to happen.
Cabbies are there for the cash and their attitude and style reflect that. Cab rides are typically reckless, the drivers rude, and the cars uncomfortable.
Of course, these are sweeping generalizations, so take it with a grain of salt.
Regardless, the game changer is the experience from app to to destination. Not just the app.