A great response to Uber

The Herald reports:

An app-based taxi service is being launched to take on Uber – led by disgruntled drivers.

Leon Kang, director of UrbanNZ, said the new service would match Uber fares and compete with the international transport app on “credibility and reliability”.

“We are making it mandatory for all prospective drivers to have background checks, medical checks and get a proper passenger endorsement under NZ Transport Agency rules,” said Kang, who drives for Uber at present. “Quite a number of Uber drivers have expressed interest in joining us, but we will be screening who we take on.”

The company was finalising its app, which according to Kang was “very similar” to Uber, and was planning for a launch in August.

“Uber seems to think it is invincible, but we are here to prove that they are not and give them a run for the money,” said Kang.

That’s a great way to respond – setting up competition. Far better than just whining.  I enjoy using Uber but I’ll happily use other services if they provide me with the same or better service and prices.

The Herald on Sunday understands many Uber drivers are quitting as they feel that the new fares, starting at $1.35 a km, no longer provide them a sustainable income.

If correct, them Uber will run out of drivers, and they’ll need to increase what they charge.

Kang said despite matching what Uber charges, drivers will have “more money in the pocket” because of lower commission fees.

Uber drivers usually kept 80 per cent of the fare, paid via a pre-registered credit card, but UrbanNZ, drivers would get to keep 87.5 per cent.

Price competition is excellent. If they are successful, then Uber will need to reduce its commission also to compete to get drivers.