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The on-demand ride service, Uber, has been operating in Winston-Salem for over four months, with fast growing popularity amongst Wake Forest students. Uber has become a more convenient alternative to taxis in major cities around the world, but the change doesn’t stop there:

Uber customers request a ride on their smartphone, and then a pre-screened driver arrives in minutes ready to drive you wherever you need to go. 

Uber currently offers its budget UberX service in Winston-Salem, which is provided by drivers who pick up customers in their own cars. For safe measure, each customer is required to provide feedback on their ride experience, 1-5 stars.

We decided to take a trip to one of Winston-Salem’s popular coffee shops, Camino Bakery. From Wake we rode in a taxi and we returned in an Uber. Here are the highlights from our discussion with key stakeholders affected by Uber’s introduction: 

 

 

     Uber Driver – Hamad

 

 

How did you hear about Uber?

I heard about Uber through a friend who drives full-time in D.C.. I applied and passed their background check. Then I had to show them my car, which had to be from 2005 or later.

How long have you been driving?

I’ve been with Uber for two months. I really like it.

What differentiates Uber from other part-time or full-time jobs?

I’m my own boss. I set my own hours, it’s perfect for my free time on weekends.

Where are most of your customers?

I’m from Greensboro but I mostly drive in Winston-Salem.

How long do you work?

I usually work a few hours during the day on Saturday and Sunday.

 About how much do you make?

Uber drivers take home 80% of the trip total.

How is the competition amongst Uber drivers and taxis in Winston-Salem? 

The taxi drivers seem to be upset that Uber is taking over a lot of business. 

Any last thoughts?

I believe Uber is going to be something huge. We are just at the tip of the iceberg.

 

 

 

     Student –  Chris Ditta

 

 

How did you hear about Uber?

I first heard about Uber from my older brother, who lives in New York City.

How often do you use it?

I use Uber about once a month, because even though I have my own car, it’s a great supplement for going downtown.

 Why do you choose to use Uber?

Regular cabs are too much of a hassle, booking a ride via Uber’s app is just too convenient.

What’s your favorite thing about Uber?

My favorite thing about uber is that its cash free; it goes right to your card so you don’t have to worry about fares and tips. I’ve yet to have a negative experience using Uber.

 

     

     City Taxi Commissioner – Rod Ring

 

 

Have you heard of Uber?

 Yes, I’ve heard they have been operating here for several months. 

How do you you feel about Uber?

As a regulator, I don’t have an opinion on them. There’s a new North Carolina state law that prohibits the regulation of services with digital dispatch. I believe Uber falls under this category.

Is Uber violating any city laws?

Typical vehicles for hire in Winston-Salem require a franchise application (3 years), driver background check, and vehicle inspection. Uber has not completed any of these items through our office, but under North Carolina state law they are not required to.

 

 

 

     Traditional Taxi Driver – Juan Bugg

 

 

Have you heard of Uber?

Yeah, I’ve heard of it, a lot of other drivers have been talking about it.

Have you noticed a decrease in fares from Wake students?

It hasn’t impacted me personally, most of my customers are local Winston residents. I haven’t noticed it, I don’t feel any difference.

 Have you seen people using Uber?

 Not really, most of what I’ve heard has come from complaints from other taxi drivers.

How would you feel about driving your own car?

 Personally, I’m happy to drive a cab. A lot of our customers don’t even have smartphones, so there will always be business for me.

 How much do you pay the cab company to lease a car?

I have to pay to lease the cab from Classic Cabs, and I pay for my own gas.

 . . .

A comparison of our trip to and from Camino Bakery:

	Taxi	Uber
Time to pick up	11 minutes	12 minutes
Type of car	Ford Minivan_____	Toyota Camry
Comfort level	Excellent	Excellent
Driver knowledge & friendliness	Excellent	Excellent
Cost	$10.50 + tip	$10.43

 

Overall we were happy with both our taxi and Uber experience. Uber is certainly facing growing pains that come with any radical change in consumer preferences. However, they are quickly establishing themselves as a competitive and accessible competitor in the taxi market in North Carolina and around the world.

When I think about what differentiates Uber as a convenience driven customer experience, I think about their ability to dynamically price rides based on real-time supply and demand. The “surge pricing” concept is not new but Uber is the first consumer tech startup to shove price fluctuations into the face of its customers. You can easily get an Uber car on a cold rainy day in New York as long as you are willing to pay the additional price.

This blog post “Beyond Uber, Venture Investors Predict Mainstream Surge Pricing” in The Wall Street Journal describes that airlines and hotels have been doing this for years, but now new data collection technology has allowed for demand information to affect prices in other industries. The article mentions that some critics view this as strictly price-gouging. However, it makes sense to me that a luxury/convenience oriented business should be able to charge more for their services when demand far exceeds supply. Keep in the mind that in the case of a company such as Uber or Airbnb, it’s individual agents (drivers and property owners) that stand to gain the majority of this pricing increase.

BeyondPricing will likely bring this dynamic surge based pricing model to thousands of Airbnb hosts. Table8 gets you access to last minute reservations at popular restaurants. And I can definitely see this trend continuing into much of the healthcare industry.

On the flip side it will be interesting to see if any companies allow for a price-hedging option, meaning that the customer could lock-in a guaranteed price in exchange for purchasing the service well in advance. Southwest Airlines enjoyed the benefits of price-hedging during the recent US recession when they decided to lock themselves into jet fuel prices at early 2000’s prices. This benefit is of course passed onto consumers in the form of lower fares. Competitors to Uber such as Lyft are already developing a reputation for this type of service when demand is low and supply is high: Lyft offers 10-50 percent off rides during off-peak hours.

Keep a close eye out for even more industries to begin experiencing drastic changes in pricing; it’s likely their will be many opportunities as an influx of readily available information on supply and demand opens the free markets even more.

P.S. Kevin Novak recently talked about how a simple interface change at Uber dramatically changed consumer behavior during surge pricing. Check it out!

During the past six months one of my primary commitments was helping to produce the TEDxWakeForestU event. On February 22nd, 2014 I had a fun day ensuring all of the speakers’ logistics were taken care of as they shared their new ideas at Wait Chapel on the Wake Forest campus in Winston-Salem, North Carolina.

I’m proud of how the talks turned out. We had a great lineup of speakers representing many new ideas from different areas of technology, entertainment, and design. You can watch them here:

https://www.youtube.com/playlist?list=PLsRNoUx8w3rPdjYMEtCNT_02e3cLvdLyR

Kevin Novak’s talk was selected as a TEDx talk of the week: (Data Scientist from Uber)

Thank you to all who supported this year’s conference!