What’s hot in the public transport innovation scene today? It’s Uber. The top (arguably) “digital transport network” in the world is looking at a possible USD12 billion valuation if efforts to raise a reported USD500 million in its most recent funding round bears fruit.
Why is Uber hot? Because it applies well the same simple principle behind many other über-successful Dot Com companies that came before it — cut out the middleman in the public transport industry.
Uber is an American venture-funded startup and transportation network company based in San Francisco, California that makes mobile application software that connects passengers with drivers of vehicles for hire and ridesharing services. Uber passengers and Uber drivers are equipped with the Uber mobile app. Passengers use it to summon drivers while drivers use it to respond to and locate passengers summoning them. While this may sound like any existing taxi cab networking system, the difference Uber brings to the table is it allows ordinary drivers to serve the network with minimal overhead. Trip metering, billing, and payment collection are all handled within Uber’s application system.
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Part of what makes Metro Manila an unlivable city is its chronically gridlocked streets. Much of this road congestion is caused by its chaotic public transport system (or lack of system as the case may be). The city government has failed to systematically develop and properly regulate public transport since its American-built infrastructure was destroyed in World War II. As a result, public transport in Metro Manila is dominated by small private public utility vehicle operators running everything from fleets of smoke-belching 3-passenger tricycles, culturally-iconic jeepneys, and large killer buses.
There is great opportunity to break into this market and kill the hopelessly snarled system that Metro Manilans suffer. Uber potentially offers the only modern solution that could retain the spirit of free enterprise and free-agency style that the Philippines’ public transport industry is renowned for. And whilst the entry of such innovation possibly faces the resistance of deeply-entrenched and powerful stakeholders in the status quo, the experience of Uber and other transport networks companies elsewhere going up against government and politics has been promising.
In May 2011, Uber received a cease-and-desist letter from the San Francisco Municipal Transportation Agency, claiming that it was operating an unlicensed taxi service, and another legal demand from the California Public Utilities Commission that it was operating an unlicensed limousine dispatch. Both claimed criminal violations and demanded that the company cease operations. In response the company, among other things, changed its name from UberCab to Uber. In the fall of 2012, the California Public Utilities Commission issued a cease and desist letter to Uber (along with rideshare companies Lyft and SideCar) and fined each $20,000. However, in 2013 an interim agreement was reached reversing those actions. In September 2013, the CPUC unanimously voted to make the agreement permanent, creating a new category of service called “Transportation Network Companies” to cover Lyft, UberX, SideCar, and Summon and making California the first state to recognize such services.
In the on-going World Economic Forum conference being held in Manila this year, there is lots of lip service paid by southeast Asian politicians to using technology and being open-minded about “disruptive” solutions to address the region’s key challenges. Considering that southeast Asian cities are renowned for their gridlocked magalopolises, it remains to be seen whether the talk in those plenary sessions will be walked anytime soon, or even in the mid- to long-term.
The Philippines’ vast army of public utility vehicle drivers are a major source of votes, and the operators who own the capital and franchises to operate are often well-connected to powerful politicians and criminal syndicates. So go figure.
[NB: Parts of this article were lifted from the Wikipedia.org article “Uber (company)” in a manner compliant to the terms stipulated in the Creative Commons Attribution-ShareAlike 3.0 Unported License that governs usage of content made available in this site. Photo courtesy Boylit De Guzman.]
benign0 is the Webmaster of GetRealPhilippines.com.