UberX officially launched in Toronto today. Which means that Toronto’s taxi and limousine industry is about to get a lot more grouchy. For those of you who may not be familiar, uberX is Uber’s low-cost car service. Just like the regular version, you hail a car using your mobile phone. But this option will cost you 40% less than a regular taxi!
Here are sample rates from the Financial District to Yonge & Eglinton (midtown):
And from the Financial District to Pearson International Airport:
This is pretty exciting. Because as much as I think it’s great to use Hailo or Uber to hail and then pay for a car, the big problem in my mind has always been that cabs in Toronto are just far too expensive. The meter starts at $4.25 and shoots up faster than you can take a selfie in the backseat.
But obviously there’s an entrenched industry here that is not going to be happy about a startup eating into their fares. So I wouldn’t be surprised if we see a lot more backlash here in Toronto – as has been the case in many other cities. However I don’t think that’s a viable long term solution for the incumbents.
Uber is thought to be worth $18.2 billion right now. It’s probably not going to go away.
So instead of protesting and trying to ban it, we should be figuring out how to adjust to this changing reality. For the incumbents, this might mean lowering fares or figuring out a better way to differentiate themselves. A 40% discount is a pretty compelling value proposition. For me personally, I don’t know why I would ever pay more for a regular taxi, unless there was no other option.
On a side note, it’s worth pointing out that an uberX trip from downtown to Pearson is estimated to cost around $33 – roughly the same as what some people think the Union Pearson Express train will cost. That’s further evidence that charging a lot and targeting business travelers may not be the best strategy.