Uber today is announcing the expansion of its Toronto business to include cab service in addition to its black car and SUV vehicle options. The Uber cab program originally began as a test initiative launched in Chicago in April, and the expansion to Toronto, alongside the announcement of motorcycle cab service in Paris, signals a desire to branch out considerably from its core offerings for the startup.
The Uber service was introduced in Toronto back in March, and since then the service has accrued “many thousands of users” in the ensuing five months, according to Uber Toronto General Manager Andrew Macdonald.
“As far as the Uber business goes, we’ve acquired many thousands of customers in the five months since our initial black car service launch, and have seen our growth rate amplify with every new product release and innovative marketing initiative,” he said in an interview. “Users have really taken to our car types launch, which allows them to choose an SUV when they wanted one. Over 20 percent of our customers have tried this feature – and the reviews are rave.”
Lately, Uber has been offering a number of promotions associated with the service, which some might consider an indication that interest in lacking in certain markets. But Macdonald says that’s just the way the company chooses to market, since its growth comes from word of mouth and referrals, and isn’t a reflection of poor traction. And the decision to launch Taxi should help Uber reach even more users, especially since Macdonald says that Toronto in particular is very much in need of a service like this because of its current taxi situation.
“We think that the cost vs. quality equation is out of whack in Toronto,” he said. “While taxis are notoriously expensive, city taxi drivers earn less than $15,000 a year in take home income, on average. There’s a lot of inefficiency in the system that leads to higher costs, but still translates to less than minimum wage incomes for drivers. We think this reality will help our growth.”
Uber will be partnering directly with drivers in Toronto, offering partnerships to any drivers licensed to operate in the city. The app will provide drivers with the ability to do more trips, Macdonald says, and to earn guaranteed tips, which should lead to higher take-home income. On the consumer side, he says Uber will be investing in driver training, and operating with “rigorous quality standards” that should help improve service levels for all.
At launch, Macdonald didn’t specific exactly how many drivers the service will be partnering with, but he did say it’s “enough of a fleet to server our expected demand over Labor Day weekend here in Toronto,” and ultimately, he anticipates that “there’s no reason the entire taxi system in Toronto couldn’t be on the Uber platform.” The rates charged are the same as city of Toronto metered fares, with a 20 percent tip added automatically, of which Uber takes a small percentage. It’s a guaranteed tip for drivers, vs. an amount that can vary wildly by trip, and a known quantity for passengers.
Uber’s Taxi launch in the city is well-timed; UK-based Hailo is about to launch its own app-driven on-demand taxi service, and has been dropping hints that’s its coming soon for weeks via Twitter. Asked about the competition, Macdonald went back to product as the company’s primary focus.
“We are always quick to move, and of course we keep an eye on our competitors,” he said. “We wanted Taxi in Toronto this week because the city needs it. This is expanding our offering set to include all 2.5 million Torontonians (or 5.5 million across the GTA). Uber now provides a quality choice at all price levels – and we’re proud as hell to be doing it.”