Last week, I attended a meeting in Edinburgh, the capital of Scotland. The meeting was in a castle half an hour outside the city. I asked if I should call an Uber to get back into town the day the meeting was over. They said, “Uber doesn’t come here anymore, let’s call you a regular taxi”. The interesting thing is that, as a habit from the pre-COVID-19 days, when I landed at the airport on the first day, I called Uber and had to wait for almost half an hour. We paid the same amount for the Uber on the way and the taxi on the way back. In the past, Uber was both cheaper and easier to find than a taxi. So what happened?
To understand what happened, it is necessary to look at Uber’s balance sheet for the first half of 2022. Uber has decided to cut its losses in recent months as markets have worsened and funding costs have soared. Uber’s loss in the first half of 2022 is 1 billion ‘dollars’. A really low amount compared to previous years. Because Uber has lost a total of $32 billion since its inception.
For years, Uber has subsidized its service with money collected from its investors in order to grow rapidly all over the world. He also said, “We provide services in remote areas where taxis are cheaper than taxis.” However, in order to earn money from the taxi business, the probability of finding a new passenger at the place where the passenger landed must be high. For this reason, taxis prefer city centers where the population is dense. Now we see that things have turned around. While Uber did not come to the castle in Edinburgh’s village, at least we were able to get a taxi until noon when we called the taxi rank in the morning. It is not possible to find a car with an acquaintance in Uber, but at least the hotel recognizes it at the taxi stand.
Although it has increased its prices all over the world and brought it to the same level as taxis, when you examine Uber’s balance sheet closely, you can see that the share it pays to drivers has not increased, but decreased. While Uber took an 18% share of the turnover last year, this share has increased to 28% this year. So far, the year 2022 has been one of the years when economies in the USA and Europe warmed the most and finding new employees was the hardest. With the labor market like this, if drivers’ share of each trip decreases, those drivers go and find another job. For this reason, Uber has also become unable to find a driver. That’s why it takes half an hour to call an Uber to the airport. In the past, in Uber, the driver could not see where the passenger was going before the passenger arrived. Uber could not stand the pressure of the drivers and had to end this practice. Because drivers do not want to go to places where they cannot take passengers on their return. Of course, it is difficult to find a driver who will work for these wages.
Uber management is under pressure to make money. Because the era of easy money is over and accessing finance is not as easy as it used to be. Drivers also ask for reasonable wages. If you spit down beard, spit up mustache. Now you have to think. Maybe there was something wrong with this one from the start. Perhaps Uber’s model was never economically sustainable. It was clear that investors would not finance a losing business forever, but would one day want to make money. Let’s see Uber 60 billion dollar How long will it be able to maintain its total valuation around it?
Uber taxis are condescending and not serving Turks
Please don’t think that I’m defending the yellow cab lobby from what I wrote. In Turkey, especially in Istanbul, we have one of the worst urban transport systems in the world. I used taxi or Uber-like services in many cities from Sao Paolo to Addis Ababa, from Delhi to Munich. I have never seen a taxi service that is as hard to find, poor quality vehicles and poor service as we were sentenced to in Istanbul. If you want to call a taxi from Uber in Istanbul, the wisest thing to do is to change your name to a foreign one, because our taxi drivers often do not condescend to serve the Turks. Hopefully, one day, we will have a taxi service worthy of our nation’s honor by allowing services such as both new taxi plates and Uber. However, we also need to understand that until that day, urban transportation cannot be solved only with taxis and Uber, which is subsidized by investors.