“Who’s that guy waving at in the middle of the road?” If you’ve had a lapse in memory or are just too young to remember what “hailing a cab” looks like, you’re not alone. In today’s digital world, hailing a ride means going to your smartphone and hitting “request.” No waving necessary.
An industry valued well over a billion dollars, ride-hailing apps have taken over traditional methods of public transportation, and major cities around the world either love it, or hate it. For New Yorkers, the flood of yellow cabs in the streets has dwindled to a steady stream, overshadowed by bright pink Lyft mustaches and sleek blue Uber ‘U’ stickers. But for cities like Austin, Texas, where strict voters overruled the use of such companies for lack of certain regulations (think fingerprint-based background checks), commuters have to fend for themselves. So while it may seem like Uber and its competitors are winning the fight to ride, you can’t yet count out the old-timers in their yellow rides of sunshine. This disruption battle has only just begun.
Uber, founded in 2009, stands at the foundation of the ride-hailing industry, but not without pressure from its competitors. Lyft joined the battle in 2012. Followed by an outbreak in services overseas like Ola Cabs in Mumbai, Grab in Southeast Asia, and the women only service SafeHer in the U.S. arriving later this year. And they all want what Uber already has- disruption.
According to Harvard Business School professor Clay Christensen, author of The Innovator’s Dilemma, for Techcrunch, “a disruptive product addresses a market that previously couldn’t be served…it offers a simpler, cheaper, or more convenient alternative to an existing product.” Today’s existing product? Taxi cabs.
The first means of “ride-hailing.” The original form of a public chauffeur. Cabs were established long before the cultivation of online transportation networks, and have used this “first-of-its-kind” status as their platform for battle against companies like Uber and Lyft. But now, cabs have something more than age in their favor. The launch of ride-hailing apps made specifically for taxi’s allowed the yellow cab industry to finally put up a fair fight. Taxi-hailing apps like Gett, Arro, Flywheel, and Way2Ride, have all successfully launched in major cities in the past few years. Most notably, Gett has already announced that it’s revenue has tripled annually to $500 million, inching closer and closer to Uber’s $800 million last year.
With more and more apps coming to fruition every day, we may never see a clear winner of this battle. But one thing is certain, there’s no clear frontrunner either. There are downsides and upsides to ride-hailing apps, taxi-hailing apps, and just plain cab hailing. Time, money, and overall experience affect the ratings and ultimate success of these networks. Here are the most important points of contention these ride-hailing apps are fighting over.
Surge Pricing vs. Flat Rates
Surge pricing has been a huge cause for complaint for users of both Uber and Lyft. It’s not uncommon for users to experience rides for as much as 3X the original price during heavy traffic periods, extreme weather and heavy social holidays or events… along with what appears to be for no apparent reason. This is where Gett and traditional Taxi’s come out on top. Gett is primarily based on it’s $10 flat rates for black car trips in Manhattan (up to a half hour), and taxi’s don’t have a surcharge at all.
Winner: Gett/Traditional Taxis
Availability
Compared to Uber’s 14,088 black and luxury cars and Lyft’s 5,000 dispatched vehicles in New York, the Taxi and Limousine Commission has roughly 13,437 medallion cabs. That’s not that big of a difference; but when looking at the number of specific drivers for Uber—the company has approximately 32,000, whereas Gett hasn’t yet reached 6,000, says NY Daily News.
Winner: Uber & Lyft
Usage
Uber provides 82,000 rides per day in New York. Taxi’s make 485,000, without even factoring in Gett rides. This doesn’t need to be further debated …
Winner: Gett/Traditional Taxis
Awareness
According to Pew Research Center, 33% of American adults have never heard of online ride-hailing services. Of the remaining percentage, only 15% have actually used them. Uber and Lyft might be well known in the major cities, but it’s not as widely used as regular cab systems everywhere else.
Winner: Traditional Taxis
Revenue
Last year, Lyft made $800 million. Pretty impressive, except Uber made nearly $2 billion. Talk about an upset. Comparatively, the New York Taxi and Limousine Commission released data last year that indicated a 18.4% gross revenue decline from the post-2012-far-increase peak.
Winner: Uber & Lyft
As you can see, the battle for the top spot on the disruption podium is far from over. Luckily for commuters, no matter who wins, there will always be a ride and disruptive technologies will keep riders as the real winners.
