How Uber Changes Emerging Markets

Uber (#Uber) announced today that they would drive a $1 billion investment into India operations this year, targeting to shore up traffic, spread footprint into dozens of cities and towns and add more rides. 

#Uber has already done pretty well and is currently doing an estimated 200k rides a day expecting to hit 1 million rides in 6-9 month (industry estimates). This phenomenal growth is expected to continue even as Uber has only just begun - covering only 18 cities so far and may be looking to cover about 100 in the next year.

As a regular user of Uber, I notice several not too-obvious areas that Uber is impacting in emerging markets, which I would like to share here:

#Uber is quietly converting cash economies into more transparent, invoiced, traceable transaction economies. In Indian cities you rarely get a metered taxi invoice or bill (except for the more recent VC-funded cab service firms) and its always a haggle and pay - with cash type service. Uber brings a huge relief as every transaction is crystal clear and invoiced.

For short city-rides, it was a common practice to hitch a three-wheeler ride - which is almost always never metered, or 'extra charged' with cash paid and no change ever returned. Besides one always was at mercy of the driver who may decide not to take you. Uber almost always never refuses a ride. 

By placing even micro-payments on record and via banks, small fleet owners now will no longer be able to avoid taxes as the entire earnings now is open and visible. As a corollary, cash and coin circulation will drop as well thus saving currency printing costs in the long run. 

Driver / Passenger rating is a huge feedback system which suddenly brings in self-regulatory mechanism into the relationship. Since rating system allows feedback to the driver it almost always ensures good citizenship. Perhaps such good behaviour will finally spill over to everything else and a sense of customer service will eventually prevail.

Bangalore's 220k three-wheeler drivers have already started feeling the pinch as more and more users are preferring to Uber their way out. Some of these drivers are now migrating to become Uber drivers and some others must be mending their behaviour to retain customers. The three-wheeler business still runs on an outdated gasoline technology which is both unsafe and polluting. 

Its quite amazing how a hugely successful model of city transport in some distant market begins impacting the same business in an emerging market - and then almost unknowingly starts affecting societal interactions, customer service, air pollution, transparency and tax collections in an equally powerful manner.

Not to mention, Uber has had its share of ills too (including the rape attempt in New Delhi by an Uber driver) and so on but the good impact factors seem to definitely weigh higher at this time. Perhaps the next thing that Uber should do is bring in Uber car pooling.