Uber’s No-Holds-Barred Expansion Strategy Fizzles in Germany
nytimes.com
nytimes.com
In other words, there are places like Australia that desperately need Uber and the competition it brings to taxi companies. Germany doesn't have this need, and Uber doesn't bring much to the table compared to what is already available.
Personally, I would love to pay a cheaper price for a less comfortable trip. I don't need to ride in a freshly washed 2012 Mercedes E-class.
The Mercedes E-Class aspect is a bit misleading; Mercedes offers cars to German taxi companies at a pretty hefty discount (as long as they are used as taxis for at least one year), which is why they're so popular.
Taxi prices across Germany are similar.
Berlin: almost all taxis are Mercedes E-Class. super clean, drivers are very friendly, interesting to talk to, seem educated. they drive calmly and professionally. the experience makes you feel good and I always tip generously.
SF: taxis are nasty. I don't want to touch anything inside the car, the seats are covered in plastic "puke" covers, the seat belts are hard to use, the driver claims he does not take credit cards even though he has a credit card machine. he might refuse to take you to certain areas, just cause. sometimes the drivers themselves are dirty, they smell like they haven't showered in a week, they are eating while driving. the car smells like pot or cigarette smoke. I feel bad for the drivers, they look like they are just barely getting by, and they are often angry and drive extremely aggressively. I guess when you are just scraping by financially as a taxi driver in SF, every second counts. I'm always surprised we didn't get into an accident.
In smaller cities, you'll wish you had Uber. Most taxis speak little english (hard to communicate where you're going without just handing them your phone with the address in it), they don't always take card or like doing so (I had a guy who after mumbling something nasty used a manual imprinter on my card) and have generally given me bad service.
Never had those issues with Uber when it was available in more places. I've moved to using Blacklane whenever I can, but they're worse than Uber.
Of course the experience for foreigners is important, but it will neither make not brake any taxi company.
Don't blame the taxi drivers, it's widely known that Germans don't like cash-less payments, and much less credit cards. Partially because of surveillance and partially because unlike the US, you have to have excellent credit reports to get a true CC and not prepaid/debit CCs.
When a company openly breaks the law (and is even smug enough to brag about it), most of the people take a strong dislike to it.
Intentionally breaking the law, in order to quickly get too big too punish seems to work in the US sometimes, because "evil government". In Europe you're in for a lot of trouble, because "evil corporation".
It's been around since ca. 2011 and for the passenger side offers the same ease-of-use as Uber does, but results in rides with real taxis along with all the protections, insurances and guarantees they involve.
For no extra cost.
By the way, I choked while reading this part of the Uber wikipedia page:
> During the initial development of the Uber app, the company created a think tank consisting of a nuclear physicist, a computational neurosurgeon, and a machinery expert who worked on predicting demand for private hire car drivers and where demand is highest.
And yes, the regulations exist to protect the taxis from competition, but in turn taxis have rules they have to follow. E.g. they are not allowed to turn you down if they don't like where you are going, because they are considered part of the local transport infrastructure that has to be available. Since they have to take "bad" jobs, they get some protection from others taking only the profitable ones.
Their only advantage in Germany is price.
But they can only offer that advantage by breaking the rules.
And breaking the rules in Germany is one of the most stupid things you can do, as people will end up refusing to use your service due to that.
But of course a valid alternative exists here in Berlin (public transport), which is absent in the US.
The taxis in Germany are definitely cleaner and more maintained. But man, I just wish there was some kind of cheaper option.
Taxi costs are hard to get cheaper – Taxi drivers already get the cars for almost free, most of the costs are minimum wage and the 8$ per gallon gasoline. (Plus maintenance, inspections and insurance)
Moreover, laws are not cat-sharing webapps. If you commit your rash change and break a build, there goes your afternoon. If you update the law this way, you will ruin many lives. "Move fast and break things" doesn't work for society, and actors who casually ignore the law should be punished severely.
Since the social net is still pretty strong, there is maybe less pressure to add jobs no matter the cost.
And we as a society need to talk about which jobs are even worth existing. I'm not saying that Uber driver is necessarily a bad job, but "because jobs" is only one important part of the argument. The other parts are "what kind of job?", "what wages?", "what kinds of externalities?", sometimes even human dignity.
In Germany the logistics of taxi management are already far beyond what we see in the US. The value proposition is lower for both rider and driver. It would be interesting to learn about the companies involved in that market. (Who makes the dispatching radios, software vendors, profit margins, etc.)
At that point, the company will maintain service centers for their fleets, whose maintenance costs will be low enough to significantly increase their profit margins. Those larger profits will, of course, flow to the relatively small number of shareholders instead of being distributed among a larger human workforce, as they are currently.
Listen to Peter Thiel. The endgame for superlative companies is monopoly.
On my more cynical days, I've convinced myself that their true endgame is an Enron-sized fraud.
Somewhat unfair... and yet.
Card use is on the rise, but it's far from the norm
The taxi market is heavily but well regulated. As a consumer Uber offers no improvement apart from potentially temporarily lower prices in the short term.
The credit card thing is also true too. Cash is king here and I routinely see people with hundreds of Euros of cash like it is nothing. I always see people paying for groceries with 100 Euro notes. Furthermore, I know Germans are much more concerned with personal security and privacy that there is also going to be a push back about having to share personal information with an American company.
Also I live in Frankfurt, and, to be honest, I have no idea why people even use taxis. To get from the Hauptbahnhof to practically anywhere in the city is only a < 20 minute U-Bahn ride. Also, the public transportation in Europe tends to be insanely good and efficient so a ride-sharing app will also have to compete with this as well.
First, a chauffeur's license is required to operate a taxi (or bus, or ambulance). This license is actually pretty straightforward to get and runs only to a few hundred Euro (renewable after five years), and the requirements are reasonable (no criminal record, good health/vision, knowledge test). These costs are a pittance for a normal taxi business, but pretty steep for a private person who only wants to moonlight as a driver every so often.
Second, insurance. There are strict insurance requirements for cars, and a private insurance generally does not cover commercial use of a car; Uber, for some reason, has been unwilling to foot the bill.
Third, taxis have to undergo annual roadworthiness tests (private cars are only required to have them every other year).
Overall, these are mostly pretty sensible regulations that are primarily concerned with passenger safety and welfare. So there is little interest in cutting back on them. But Uber's business model isn't compatible with that.
As an example, to find somewhere to rent on your own, you need a German bank account to pay your rent with. To get a German bank account, you need to register as a resident with a specific address. Supposedly you need to do that within 14 days of entering the city, but when I last looked the wait to book an appointment online to register was a couple months.
[1] http://fishinggermany.jimdo.com/taking-my-german-fishing-lic...
Try looking up the procedures for an EB-5 visa application. They don't mention that, since the prez made certain statements re deportations, the immigration people are going nuts. Each and every step is being examined as if your client was trying to export uranium.
Want to setup a farm, as farmer? You’ll have to register with the Katasteramt, Tierseuchenfonds, the Sozialversicherung für Landwirtschaft, Forsten und Gartenbau, and most of them require you to tell them the same stuff 3 or 4 times.
Germany could improve a lot in bureaucratic things.
My mum – working in the emphasized agency – often has to actually call the other agencies frequently to check their data (as it’s often inconsistent)
The famous database class lesson of "duplication always leads to inconsistency" doesn’t seem to have been heard by the people who administrate this stuff.
It’s hard to justify uber when they have the same comfort, same prices, but treat employees worse, and refuse to operate within the same laws.
Uber only has advantages in the areas where they can provide cheaper prices, and they often can only provide these by breaking rules (like the insurance in the beginning) or by mistreating employees (which they classify as "subcontractors". This Scheinselbstständigkeit is going to lead to legal issues for uber in the future, too).
And, additionally, while local taxi companies can operate on small margins – and the profit ends up back in the local economy – Uber has investors at Wall Street to please, and their profit ends up in New York, not in the local economies.
Even if you didn't mean to say it, you did, and likely thought it. I recommend improving your delivery. :)