Telematics – Internet + telecommunications – continues the 'creative destruction' (as Schumpeter called it) of sectors and services. Now it's time for taxis. An app called Uber allows the ordinary citizen with a cell phone to call a car and have it take him wherever he wants at a much lower price than a taxi. Drivers are chosen by the Uber manager, they must meet certain requirements, have a 'casco' policy, and have a car in good condition (2005 model or more recent). Naturally, traditional cabbies are furious and, where the service is already in place (in some US states and elsewhere) they have fought hard, portraying the dangers of relying on an unregulated structure and unfamiliar drivers. In some cases Uber has had to obtain additional insurance, adding a dollar to the rates: the company takes 20% of the proceeds and the driver the rest.
The battle will continue, but it is not difficult to predict the victory of Uber. If drivers misbehave they will be excluded from the service: there is therefore a self-regulation mechanism, a bit like what happens on eBay, where the risk of being cheated is mitigated by the 'reputation' built up by the seller and made public. Uber, which originated in the US, was funded by Google with $250 million.
