So sue me: When a company gets a cease-and-desist letter from taxicab regulators, you know it has an interesting business model. That’s what happened to UberCab, a startup since renamed simply Uber, whose app acts like a pocket limousine dispatcher.
Uber is simple: ask it to send you a car, and soon you’ll see a black limousine inching toward you on the screen. Limo drivers who sign up use the app, too, and see the location of fares. The experience is intimate; soon you’ll be IM-ing John, Bill, and the rest of your fleet of drivers.
Uber means competition for taxi fleets and limo dispatchers. Cofounder Travis Kalanick says he had the idea for the app after getting annoyed waiting for taxis in San Francisco. Cities create artificial scarcity by limiting the number of cabs, meaning that riders face waits and medallions can cost over $1 million. “The system is dying for a change,” says Kalanick. “Everything today is click a button and no more waiting for anything.”
Once you’ve given your credit card number to Uber, payments to the driver are automatic. Uber’s cut of the driver’s fare: about 20 percent.