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Thursday, September 10, 2015

Why Uber is important for South Africa

The photo above is from the Uber web site. I hope they don't mind me using it.

Let me start by saying that I haven't used Uber yet, but it is a serious part of my future plans, if I am to do as our government and local government would have us do, and use public transport. I am also not a shareholder, just a thinker, and I want the best for South Africa and its people.

You see, in order to use public transport, I need choice. This means there must be competition, for example the IRT (Integrated Rapid Transit system), buses, trains, taxis, Uber, planes, other transport services, etc.

Transportation is incredibly expensive in South Africa. Worse than this, it is erratic, slow, and cable thefts, vandalism and poor maintenance means that one's staff are often late for work, stressed out, and not in the mood to work, when they get to work. Trains, taxis, buses, etc, are all already regulated, yet, as can be seen, this legislation is unenforceable and in any case, most of the operators simply ignore it! Worse than this, public transport and minibus taxi services often cease at between 6.30pm and 7.30pm, which means that poor people cannot enjoy night life in Cape Town, cannot go to the concerts, and our students cannot work late at university and then get reliable transport home.

When I was at university, I was often there till 11pm and sometimes even till 3am. Doing projects. Using the computer lab. Having fun. And fortunately I had a motorbike, so I could go home, have some breakfast and then be back in time for lectures. South Africa has a dire shortage of students and degreed students, and part of this is because the transport services have forgotten about them.

Enter Uber. The potentially low cost transport option for the masses, without the burden of public transportation hampering the public purse! Uber, especially designed for developing countries.

Uber brings the first mass transport, reliable, self-regulated, and low cost transport service to South Africa. And its vehicles can carry one passenger, if the passenger doesn't want to share, or many passengers, if they do want to share. Finally another way of reducing South Africa's high pollution and reducing the need for foreign oil, especially with a depreciating currency.

And of-course, if someone wanted to, they could easily compete with Uber!!

Uber's next foray is called UberShare, where one car is used to transport many people, like a bus, but way more versatile. When I was in Israel in 1984, there were Mercedes Limos with 3 rows, called Sheruts. These Limos could transport us students, travelling on a meagre budget around, pretty much from exactly where one was to where one wanted to be. I guess they were the forerunners of our mini-bus taxis, except to say that it felt wonderful to be in a Mercedes Limo, rather than a rattly old minibus, or even in a rattly and draughty bus.

Jeremy Rifkin, in his ground breaking book, "The Zero Marginal Cost Society", discusses Uber as one of the many services that operates almost for "free", where its costs decrease every year rather than go up. We have already seen this in free internet access, free phone calls, free movie tickets. And millennials want access rather than ownership, and the Uber service fits this new paradigm.

Although the government believe that Uber and similar services need to be regulated (by government), these services will in fact be regulated by social media. Imagine an Uber user who gets in a car with tomato sauce on the back seat, or a driver who smokes, or a driver, who might have been a former minibus driver, who ignores the road rules? These cars will very quickly be virused, i.e. social media will go viral on both good service and bad service, and good service will win. And at no cost to our government in terms of fines, more expensive to maintain regulations and more courts to get people to obey the law. As it is, many people simply ignore their fines and if they are summonsed, even ignore the summonses. Our jails are full and overflowing. Self regulation is key to our future. Millennials and social media will see to it!

I would very much like to give up my car, but I cannot because the existing services are too far away or are too expensive. What I would like to do is be able to call Uber and ask them to take me to my local IRT station. And when I get back home at 8pm after a long day, I'd like an Uber driver to meet me at my local IRT station and bring me home. Or I'd simply like to be able to use Uber for the trip, if I am not going on an IRT route.

Our local taxis are way too expensive for this and they don't like doing short routes. And they have regulated themselves into not being able to operate on "any" route, but must stick to their agreed routes, pretty much like the bus system.

Or I'd like to walk up the road to a major thoroughfare like Koeberg Road, and simply get an Uber "sherut." I can't rely on minibus taxis to drive properly or to maintain their vehicles, and I can't rely on "regulations" because of no enforcement. And even if I was on a minibus taxi, I might find myself in the middle of a war zone, as two taxi associations fight it out with guns and knives for turf, as happened in Westlake, Cape Town, a few weeks ago, causing me to take 2 hours for a half hour journey. They are doing themselves out of jobs in their rush to be "first."

Competition is incredibly important in an environment where one wants to give up one's car. I need the IRT. I need the railways. I need the taxi services. I need services like Uber. I don't want to take the mini bus taxis because they typically drive badly and ignore the rules of the road. If Uber, and other similar services, usurp them, and they usurp an unreliable and expensive bus and train service, then these service providers only have themselves to blame!


  1. From Shaunak:

    That's a brilliant perspective you have there David! I myself am writing a paper on why these app-based services are increasingly becoming more accepted by users in India! Most of the points you've mentioned hold true in the Indian context as well, but I do have one question: don't you think that despite its relevance and importance, it will be used by only a small segment of the society, as the service caters to nothing but a niche market?

    Dear Shaunak.

    Thank you very much for your support and encouragement.

    It might be a niche market, but I think that as "access" becomes more important than "ownership" and as "aas" (as a service) grows faster and faster, even outside the ICT environment, we will see more and more services like Uber.

    AAS means that people pay when they use the service, rather than paying all the time. If I own a car and only drive an hour a day, then I am paying for the car for 24 hours a day, but only using it for 1 hour a day. This is a huge waste of resources, on a finite planet. The fossilised car manufacturing companies might not like this, but they must also re-imagine themselves, rather than fighting progress. Even as new car companies like Tesla and Google invent themselves.

    It might be a "small segment", but even achieving 1% of worldwide transportation will be an incredible achievement, and who knows perhaps Uber will branch out into private jets and electricity (UberJets and UberPower).

    I've had some other feedback from people who are "moonlighting" as Uber drivers after work. One of them only has to work two evenings to pay off his monthly repayment of his car.

    What I'm saying is that if Uber has 100% of that small 1% segment, then it will have the biggest profits and possibilities in that segment. And as it expands its services, I think that that 1% will grow, until one day we wonder what we did before Uber.

    Do you agree?


  2. Watch Travis Kalanick, cofounder of Uber, on The Late Show with Stephen Colbert https://youtu.be/wGdjLv8neBs