Uber warns of higher prices and longer wait times following Toronto’s decision to freeze new licences until the city’s Uber-hating mayor signs off on all the city’s new ride-hailing plans – which will be a full year after the Toronto Public Service Board granted the company its licence.
The Uber app is available in over 200 cities across the globe with over 500,000 drivers, and is the highest volume app on the Apple App Store.
When it comes to the Uber app’s popularity, it’s now a case study in how to achieve rapid growth while maintaining a high amount of quality reviews – and how to use it to create a sustainable business.
The Uber app is now the most popular on the Apple App Store, with over 500,000 downloads, but how long can that be sustained?
The first thing to consider is the cost – to the company, the city, and to drivers. Uber charges $35 per Ride per minute and $45 per Ride, which adds up to an average ride time of about 20 minutes, not including the time it takes to pick up after an order, a delivery or a pick-up, and that amount can go up if the driver needs to pick up more passengers than a given set amount of minutes. Given the current average of 20 minutes, each driver might be doing 20 rides or 20 deliveries a day, or they might be bringing in 100 passengers in 20 minutes, or they might be bringing in 30 passengers in 50 minutes and so on.
The problem here is that once you pay the driver a set amount to take a certain amount of passengers on a given day, you can’t easily scale back their workload. Once you pay your driver an $80 or $100 a day to take 15,000 or even 15,000 passengers on a day, and the app still has to show you an average ride time of at least 20 minutes, they are going to get the work. It’s easy to see that the value of the Uber “product” is going to be increasingly unsustainable.
The other thing to consider here is the cost to the city. If you’re a passenger and the Uber-pickup option is available, you
