Latest lawsuit just another bump in the road for ride-sharing service Uber

Photo credit: KALW Local Public Radio
Photo credit: KALW Local Public Radio
Uber has changed the way we think about grabbing a ride, and the taxi industry doesn’t like it.

This week, New York City taxi owners and lenders filed a lawsuit against the city and its Taxi and Limousine Commission for letting Uber ruin their business.

Their big beef: Uber is killing their revenue and the value of medallions (the city-issued licenses to operate cabs). They’re seeking compensatory and punitive damages as well as trying to ease cab drivers’ regulatory burdens.

The taxi industry is fighting a losing battle.

Much like the newspaper industry couldn’t kill the Internet, iconic record labels couldn’t pull the plug on streaming music services and bricks-and-mortar stores couldn’t knock down Amazon, the car industry won’t be able to put the brakes on ride-for-hire services like Uber.

The global tech company has been on the fast track of market growth since it launched in 2009. Valued at $51 billion, Uber claims ride-sharing agreements in every state in the country except Alaska, South Dakota, West Virginia and Wyoming.

New York represents Uber’s largest market, and UberX, the company’s low-cost option, makes up more than 80% of all Uber rides in the price-gouging city.

Uber has encountered many roadblocks along its proverbial road to success. But previous attempts by the taxi industry to sue Uber for threatening their livelihood have gone nowhere.

Why? Because with today’s digital-sharing economy, Uber represents a new business model in the same way Amazon did 2 decades before it.

And that model has turned Uber into a top brand among millennials.

uber sign-in screenThat’s because Uber puts consumers in the driver’s seat, which makes the brand especially popular among the digital-native millennials. You see, this social generation enjoys collaborating with brands and typically seeks the opinions of others when making a purchase decision.

These traits fit perfectly with Uber’s tech business model that relies on social ratings to manage its million contract workers. Any driver whose ratings fall below 4.6 is deactivated.

That means Uber drivers have strong incentives for providing excellent customer service each and every time they pick up a fare.

Another perk? Having a no-hassle alternative to a cab at your fingertips – with payment automatically charged to your credit card, gratuity included.

Using technology to put customers first is driving Uber’s success. And as a marketing communications professional and consumer, I say hooray to that.



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