Uber is an extremely marginal business at best. How a company can mess up such an easy (and, yes, innovative) business model is beyond logic. The customer is getting a good ride, but one wonders for how long? The ATO's recent ruling on "uber as a taxi service" places an additional pressure on its drivers' costs.
Here's the thing: conventional taxis have had to develop in an environment that was known: restrictive plate availability, high plate costs and high overheads (GST, dispatch charges, driver training, licencing and screening, mandatory vehicle maintenance schedules, government imposed fare limits, etc).
Uber came out with a low cost - high margin model and were looking to cream the conventional taxi industry. Yes, they were a disruptor and took good market share, but now reality is setting in. Surprise, surprise - they will need to comply with what the conventional taxi industry has had to for years. Uber costs can only go up, whereas taxi costs can/will be cut.
No doubt, Uber will float soon on the basis of their revenues and "potential". The start-up owners will walk away very wealthy people (and good luck to them), but pity the investors who buy their story! (going driverless may prove good, but I don't see that happening on any scale for at least 10 and possibly 20 years, in spite of all the hype).
CAB Price at posting:
$4.11 Sentiment: Hold Disclosure: Held
