• Great articles on other sites
  • RSS Great articles on other sites

  • Blog, Industry - Written by on Monday, April 28, 2014 13:57 - 11 Comments

    Uber’s ride-sharing: Just the tip of the iceberg for Australia’s emerging ‘sharing economy’

    supporthands

    blog Those of you who keep a close eye on vehicle sharing developments around the world will recall that on-demand ride service company Uber, which has traditionally worked with taxi and private car hire companies to make it easier for passengers to book a car, deployed a new aspect to its service internationally in April 2013. Dubbed ‘ride-sharing’, the service allows anyone with a car to offer lifts to anyone else, for a price. The service competes directly with rivals such as Lyft and SideCar, which have launched in the US but which have not yet achieved any traction in Australia.

    Up until now the service hasn’t caught much attention in Australia, although Uber and rivals such as GoCatch and Ingogo have been steadily growing in Sydney, in coopetition with existing taxi and private car hire companies. However, late last week the issue came to the fore as Victorian Transport Minister Terry Mulder said the state’s Taxi Services Commission, chaired by former ACCC chair Graeme Samuel, was investigating Uber’s ride-sharing service. The Sydney Morning Herald reports (we recommend you click here for the full article):

    “On the face of it, Mr Samuel believed that Uber was not complying with the Victorian public transport legislation. “If they are not complying with the law we’ll prosecute,” he said.”

    The obvious impetus for most of the angst is the amount of revenue being pulled in by taxi organisations and taxi drivers all around Australia, who have predominantly seen the uptake of services such as Uber, GoCatch and Ingogo as a positive up until now, due to the fact that they boost taxi utilisation rates and hence individual drivers’ revenues. The new ride-sharing service, on the other hand, has the potential to pass revenue off to private car owners.

    Such services threaten taxi revenues; and predictably the Australian taxi organisations are in an uproar already. State Governments also make a lot of money from regulating the taxi industry, especially selling lucrative taxi plates, meaning they too have quite a bit to lose if taxi utilisation rates sink.

    However, there’s also quite a lot of indication that ride-sharing is ultimately to the benefit of consumers due to lower costs and increased freedom of choice, and that the dangers of consumers using unregulated individual car ride-sharing services may be exaggerated. US technology magazine Wired published an excellent yarn last week on the wider issue in general. The magazine reported (we recommend you click here for the full article):

    “The sharing economy has come on so quickly and powerfully that regulators and economists are still grappling to understand its impact. But one consequence is already clear: Many of these companies have us engaging in behaviors that would have seemed unthinkably foolhardy as recently as five years ago. We are hopping into strangers’ cars (Lyft, Sidecar, Uber), welcoming them into our spare rooms (Airbnb), dropping our dogs off at their houses (DogVacay, Rover), and eating food in their dining rooms (Feastly). We are letting them rent our cars (RelayRides, Getaround), our boats (Boatbound), our houses (HomeAway), and our power tools (Zilok). We are entrusting complete strangers with our most valuable possessions, our personal experiences—and our very lives. In the process, we are entering a new era of Internet-enabled intimacy.

    This is not just an economic breakthrough. It is a cultural one, enabled by a sophisticated series of mechanisms, algorithms, and finely calibrated systems of rewards and punishments. It’s a radical next step for the ­person-to-person marketplace pioneered by eBay: a set of digi­tal tools that enable and encourage us to trust our fellow human beings.”

    What the Wired article makes clear is that the Uber ride-sharing service is just the tip of the iceberg. The United States is going through a remarkable wave of capitalist change at the moment, driven by the encroachment of the ‘sharing economy’ on traditionally regulated market structures. I would suggest to Ministers such as Terry Mulder and regulators such as Graeme Samuel that they need to look at this phenomenon in greater depth before passing judgement on this specific aspect of it.

    Other Ministers, such as NSW Transport Minister Gladys Berejiklian, appear to be a little more on top of the situation and its long-term potential, and some commentators are also already on board, pointing out that the taxi industry has had a stranglehold on its sector for far too long.

    It will be interesting to see how things develop as more and more ‘sharing economy’ services hit Australia over the next several years. I suspect such platforms will be quickly taken up by consumers and will provide valuable niche alternatives to large corporate services, while regulators will struggle for at least the next decade trying to work out how or whether they should be controlled.

    submit to reddit

    11 Comments

    You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

    1. HazchemD
      Posted 28/04/2014 at 2:10 pm | Permalink |

      Uber isn’t ride sharing. It’s a taxi alternative service. It’s IMO a success not only because it’s cheaper but because it’s better than existing taxi services. Give me a choice between Uber and taxi at the same price and I’ll go Uber every time

      Used airbnb for the first time last holiday, awesome as well

      • Posted 28/04/2014 at 2:15 pm | Permalink |

        Read the article … Uber has also launched a ride-sharing service.

        • HazchemD
          Posted 28/04/2014 at 2:29 pm | Permalink |

          yeah but uberX (or uberPOP in Aust) is still just and ad Hoc taxi service. You tell the driver where you want to go and they get paid to take you there. Hardly ride sharing. And it’s actually my favourite part of uber!

          • Andy
            Posted 28/04/2014 at 8:54 pm | Permalink |

            Unlike a real taxi, they’ll actually take you, too!

            Melbourne taxis aren’t interested unless you’re going to/from the airport or somewhere equally far (read: expensive) on a weekend…

            • JC
              Posted 29/04/2014 at 11:49 am | Permalink |

              … but not too far. I’ve been refused a taxi ride home from the melbourne CBD because it was too far to Mt Dandenong, and similarly been refused because it’s too short to go to Kew. I’ve since learned to not reveal my destination till I’m in the car when they can’t legally tell you to get out because they don’t want to drive you, and at which point you can get their details to report them.

              • Dan
                Posted 29/04/2014 at 7:43 pm | Permalink |

                They can’t legally refuse you at all unless you are drunk or violent.

    2. Rob
      Posted 29/04/2014 at 11:05 am | Permalink |

      Competition is good, there should be a level playing field though. UberX is basically a taxi service, either they are subject to the same regulations that the taxi industry is or the taxi industry should be subject to less regulations.

    3. ex-gov
      Posted 29/04/2014 at 11:34 am | Permalink |

      Interesting wsj blog article on the same subject:

      http://blogs.wsj.com/accelerators/2014/04/23/jeremiah-owyang-the-collaborative-economy-will-double-this-year/

    4. Steve Hodgkinson
      Posted 29/04/2014 at 1:02 pm | Permalink |

      Good article Renai – these co-production systems are very interesting as an alternative to the traditional structures where trust requires heavy duty corporations and government regulation (trust the yellow coloured taxi because you know the government is regulating the taxi industry etc.) Instead this top down trust model is replaced by a bottom up peer-to-peer model which can actually be better because it is based on a much finer grained series of real time feedback loops.

      Both models have their flaws but the one thing that is clear is that the peer-to-peer model enabled by the Internet and social media is evolving at a much faster pace than traditional regulated models are capable of evolving.

      The peer-to-peer model, however, requires (and encourages) intelligent engaged consumers … whereas the regulated model encourages consumers to rely on the ‘Nanny State’ to protect them while they go blithely about their day. One good outcome of peer-to-peer model like eBay is that customers are required to actually positively engage in the safety of their transaction rather than simply rely on some form of institutional safety net. eBay, like Uber, however, is not for everyone. Caveat emptor.

    5. Fedora nek
      Posted 01/05/2014 at 10:03 am | Permalink |

      Just putting this out, there’s a sharing economy search engine that is killing it in Europe called Outpost: http://outposttravel.com

      -Fedora NB, TipLe

    6. David Dolphin
      Posted 02/05/2014 at 10:04 am | Permalink |

      It would be interesting to get some clarity on the following:

      1. What are the rego and insurance implications when using your own car to run a business?
      2. What are the income tax implications for you as a driver?
      3. What are the tax implications for Uber itself when taking 20% of your earnings?
      4. Since Uber sets the rate for the trip, can you refuse it if it is too small an amount?
      5. Once the other competitors come on board, will price wars happen (as in San Francisco)?
      6. Once it catches on, will it end up being overrun by cowboys and hacked by mischief makers?
      7. Exactly how does Uber get Police checks on drivers? Can I get a Police check on somebody?
      7. Isn’t 20% rather a high commission rate for Uber since the driver is already giving “cheap” rides, paying for petrol, car maintenance and tolls?

      Personally I see this as being attractive for passengers while fares are cheaper but not sure how the drivers will really get much economic benefit.
      The problem is, you only hear from passengers who are happy to save money and those running the system who are making easy money.
      It seems to me there is a risk the drivers may end up as unhappy as Taxi Drivers and Pizza Delivery people, doing a lot of work but not making much money.




    Get our 'Best of the Week' newsletter on Fridays

    Just the most important stories, one email a week.

    Email address:


  • Enterprise IT stories

    • Super funds close to dumping $250m IT revamp facepalm2

      If you have even a skin deep awareness of the structure of Australia’s superannuation industry, you’ll be aware that much of the underlying infrastructure used by many of the nation’s major funds is provided by a centralised group, Superpartners. One of the group’s main projects in recent years has been to dramatically update and modernise its IT platform — its version of a core banking platform overhaul. Unfortunately, the $250 million project has not precisely been going well.

    • Qld’s Grant joins analyst firm IBRS peter-grant

      This week it emerged that Peter Grant, the two-time former Queensland Whole of Government CIO (pictured), has joined well-regarded analyst firm Intelligent Business Research Services (IBRS). We’ve long had a high regard for IBRS, and so it’s fantastic to see such an experienced executive join its ranks.

    • Westpac dumps desk phones for Samsung Android mobiles samsung-galaxy-ace-3

      The era of troublesome desk phones tied to physical locations is gradually coming to an end in many workplaces, with mobile phones becoming increasingly popular as organisations’ main method of voice telecommunications. But some groups are more advanced than others when it comes to adoption of the trend. One of those is Westpac.

    • Ministers’ cloud approval lasted just a year reverse

      Remember how twelve months ago, the Federal Government released a new cloud computing security and privacy directive which required departments and agencies to explicitly acquire the approval of the Attorney-General and the relevant portfolio minister before government data containing private information could be stored in offshore facilities? Remember how the policy was strongly criticised by Microsoft, Government CIOs and Delimiter? Well, it looks like the policy is about to be reversed.

    • WA Govt can’t fund school IT upgrades oops key

      In news from The Department of Disturbing Facts, iTNews revealed late last week that Western Australia’s Department of Education has run out of money halfway through the deployment of new fundamental IT infrastructure to the state’s schools.

    • Turnbull outlines Govt ICT vision turnbull-5

      Communications Minister Malcolm Turnbull has published an extensive article arguing that the Federal Government needed to do a better job of connecting with Australians via digital channels and that public sector IT projects needn’t cost the huge amounts that some have in the past.

    • NZ Govt pushes hard into cloud zealand

      New Zealand’s national Government announced a whole of government contract this morning for what it terms ‘Office Productivity as a Service’ services. This includes email and calendaring services, as well as file-sharing, mobility, instant messaging and collaboration services. The contract complements two existing contracts — Desktop as a Service and Enterprise Content Management as a Service.

    • CommBank reveals Harte’s replacement whiteing

      The Commonwealth Bank of Australia has promoted an internal executive who joined the bank in September after a lengthy career at petroleum giant VP and IT services group Accenture to replace its outgoing chief information officer Michael Harte, who announced in early May that he would leave the bank.

    • Jeff Smith quits Suncorp for IBM jeffsmith4

      Second-tier Australian bank and financial services group Suncorp today announced that its long-serving top technology executive Jeff Smith would leave to take up a senior role with IBM in the United States, in an announcement which marks the end of an era for the nation’s banking IT sector.

    • Small business missing the mobile, social, cloud revolution iphone-stock

      Most companies that live and breathe the online revolution are not tech startups, but smart smaller firms that use online tools to run their core business better: to cut costs, reach customers and suppliers, innovate and get more control. Many others, however, are falling behind, according to a new Grattan Institute discussion paper.

  • Blog, Enterprise IT - Jul 5, 2014 13:53 - 0 Comments

    Super funds close to dumping $250m IT revamp

    More In Enterprise IT


    Blog, Telecommunications - Jul 5, 2014 12:12 - 0 Comments

    What should the ACCC’s role be in guiding infrastructure spending?

    More In Telecommunications


    Analysis, Industry, Internet - Jun 23, 2014 10:33 - 0 Comments

    ‘Google Schmoogle’ – how Yellow Pages got it so wrong

    More In Industry


    Blog, Digital Rights - Jun 30, 2014 22:24 - 0 Comments

    Will Netflix launch in Australia, or not?

    More In Digital Rights