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Providence Taxi Company Criticizes Uber For Price Gouging, Undercutting Competition

Friday, October 31, 2014

 

Providence area taxi drivers and companies are joining the ever-growing efforts to regulate Uber and other ridesharing companies throughout the nation because their current pricing model undercuts local taxi drivers to lure in business just to price gouge the customers that they bring in.

While any company is going to be hesitant to competition, Economy Cab, Inc. based out of Johnston is growing upset and impatient because they don’t consider Uber legitimate competition because of their continued not following of local and state regulations.

“We are regulated and told what we can and cannot do as a taxi company and that is the big issue, Uber and other ridesharing companies do not abide by these same rules and regulations,” said John Petrarca, President of Economy Cab, Inc. “They always say that just because they are an app, they can do what they want. There has been a lot of controversy surrounding Uber and how they come to a city and do not follow the rules, which negatively impacts local taxi companies and consumers.”

While many taxi companies throughout the United States have made the same claims, evidence from the Better Business Bureau backs it up. According to their report card for Uber, the BBB gave the company an F grade saying, “some consumers claim that they were told the final cost of the transportation service the company provided (through Uber Technologies' phone app, the driver, and the consumer's receipt), only to be subsequently charged a substantially larger amount).”

Uber Drivers Upset as Well

Uber has also been under a lot of criticism from their drivers because the company has over-saturated the market and lowered the prices for each ride, which serves as a loss of money for the drivers themselves. Recently, Uber drivers have protested in San Francisco and Los Angeles while there have been strikes in New York and London.

While Uber drivers have yet to protest or strike in Rhode Island, there is a growing distain on the local message board on UberPeople.net, an online forum that describes itself as an “independent community of rideshare drivers.”

Much of this ill will toward Uber stems from a recent cut in Uber prices, which directly impacts the drivers, coupled with a lack of jobs in the area. One local Uber driver took to the forum to say that he is making so little money that he can’t work for the company anymore.

“[The] rates went down, and I'm sending the phone back. [It’s] not worth it to me anymore,” said an Uber driver who identified on the forum as “tj06civiclx.” “I only did this on the side for some extra cash. I would turn it on during the day (and usually be the only one on the island, Newport area) and get a few pings here and there, [with] some good rides to Providence (which aren't worth it to me anymore at the new rates).”

Lower Prices = Increased Demand

While there has been much negative attention paid to price gouging customers, undercutting established taxi companies, and workers outraged with being paid much less than Uber reports to the media both locally and internationally, Uber insists that its business model is working to the benefit of both employees and consumers alike.

While the company admits that they do price gouge during busier parts of the day, they claim that their app reflects all costs at the time of purchase. Additionally, Uber has made rates cheaper for customers overall – which means Uber drivers are being paid less – but the company says that the lower rates mean higher demand for services, meaning that drivers have the potential to make more money than ever.

“What we've seen in cities across the country is that lower prices means higher demand, resulting greater earnings for our partners” said Taylor Bennett, a spokesperson for Uber. “This higher rider demand will help drivers stay busier during the normal hours they're online, and to spend more time on the road earning fares and less time waiting for requests, therefore earning as much money or more in the same amount of time.”

 

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