UBER Takes on Taxi Establishment

What happens when an innovative upstart takes on the status quo?  Conflict!  History is full of examples from democracy replacing the rule of kings to velcro replacing shoe laces.  A few years ago, a young start-up company called UBER  based in San Francisco looked at the existing taxi cab business model world-wide and said "We can do better".  They developed an application for smart phones that would match customers with qualified drivers screened by the company.  Bingo!  Simple.  Fast.  Direct.  Cheaper.  Use the app and get a car when you want one.

So UBER  Technologies Inc.  set off to conquer the world.  They now operate in 40 countries and are highly regarded by both customers and drivers.  But not by the status quo.  Ever since the first gasoline powered taxi cab picked up its first customer in Stuttgart, Germany, 1897, the industry has covered itself in protective regulations and high-priced taxi permits.  The latest conflict between the old and the new came to a head in Germany last week when a Frankfurt court ordered UBER to cease its operations in that city.  The case was brought forward by Taxi Deutschland which argued that the company did not have the necessary permits to carry passengers under German law.  UBER shot back:  "We believe innovation and competition is good for everyone, riders and drivers.  You cannot put the brakes on progress".

Considering the fact that European taxi permits can cost up to 200,000 Euros ($287,000 U.S.)  each, it's no surprise the old order was upset.  In fact, regular taxi drivers have staged protests against UBER in Berlin, London, Paris, Madrid and many smaller cities.  The company also faces lawsuits in America, South Korea, India and Britain.  To complicate the issue, UBER has the support of 2 big investors - investment banker Goldman Sachs and Google. These players have deep pockets and a vested interest in UBER's success - Google for the booming market in apps for smartphones and Goldman Sachs for the company's growing popularity and profitability.

So the war continues.  A spokeswoman for Taxi Deutschland said:  "We're not afraid of our adversary because the law is on our side.  Goldman Sachs and Google can pour as much money in as they want but even UBER has to abide by the law".  The company responded with a legal appeal of the Frankfurt court decision to close its operations.  Then in a blog post to its loyal customers and drivers, the young upstart rallied around its battle cry - "KEEP CALM AND UBER ON".
To be continued.