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Uber launches uberPOOL in another self-disrupting move

The service enables riders with same destination to share a ride, which could cost up to 25% less than an uberX ride
Thursday, June 30, 2016 - 05:50
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Class 95 DJs The Muttons, namely, Vernon A and Justin Ang (above, nearest to car) arrived at the uberPOOL launch venue in a white Honda Vezel amid showers of confetti.

Singapore

IN true "disruptor" style, Uber threw a raucous party on Wednesday to mark the Singapore launch of its carpool service, uberPOOL.

A white Honda Vezel, decked in splashy uberPOOL decals and carrying the popular pair of Class 95 DJs called The Muttons, pulled up at the Museum of Art & Design in Tanglin Road to showers of confetti released with a triumphant bang.

The long-awaited service, which enables riders headed for the same destination to share the journey, will be available in Singapore from Friday.

This is not the first time Uber has yanked the rug out from under its own feet, that is, launched a service that could threaten the survival of its existing offerings.

But Uber Singapore's general manager Warren Tseng put it this way: "Better Uber disrupts itself than have someone else do it."

In the past, the ride-sharing firm has introduced its lower-priced private vehicle booking service UberX, despite the risk of this cannibalising the high-end uberEXEC service that Uber had debuted with.

Uber has also launched its pay-in-cash option, which flew in the face of its cashless-only policy.

Mr Tseng told The Business Times on the sidelines of the launch of uberPOOL: "Different products serve different parts of the market. We don't see a new product as necessarily cannibalisation, but as another option."

For instance, uberPOOL is about getting more butts into fewer cars. This translates into less congestion over time and cost savings for riders, he said. An uberPOOL ride can cost up to 25 per cent less than an uberX ride - whether or not the app pairs a rider with another rider.

Mr Tseng said: "The guaranteed discount is a poignant reason to use uberPOOL."

UniSIM senior lecturer Walter Theseira said there would be some cannibalisation between uberPOOL and uberX or uberEXEC, because uberPOOL was "still basically a private transport service"; however, its lower fares could expand the market to include commuters who may not be able to afford a taxi or private-hire car, but who can afford a carpool ride.

"So the overall impact on drivers and the market will depend on the extent to which the market is expanded."

Uber's Mr Tseng pointed out that uberPOOL will also benefit drivers who will spend less "dead time" driving unpaid in between paying trips.

Singapore is the third city in South-east Asia, after Jakarta and Manila, to land uberPOOL; globally, the carpool service has been rolled out across some 40 cities such as Los Angeles, London and Chengdu since its August 2014 founding.

Uber's ride-sharing rival Grab has a similar service named GrabHitch, a beta version of which was launched in Singapore last November.

Asked to distinguish the two services, Mr Tseng said uberPOOL enables every uberX driver on the road to become a carpooler without the driver having to be headed in the same direction as his rider or riders. GrabHitch, on the other hand, is a social ride-sharing service, under which the driver and rider are both headed in the same direction.

A GrabHitch spokeswoman added that GrabHitch fares are not pegged to make a profit, but calculated to cover fuel cost and and variable costs such as wear and tear.

She added that GrabHitch drivers were a separate pool from GrabCar drivers; GrabHitch drivers operate under private auto insurance, and their GrabCar counterparts, commercial auto insurance.

She told BT: "We don't have a firm date on when the GrabHitch beta will become live."

GrabHitch lets riders pre-book a ride seven days in advance, right up to 15 minutes before pick-up. In line with Singapore carpooling regulations, GrabHitch drivers are able to accept up to only two rides a day.

UberPOOL, on the other hand, works by letting the first rider request for a ride through the Uber app and get picked up by a driver; along the way, another rider going in the same direction can request an uberPOOL ride. The system will recognise this and match both riders.

If the driver accepts the second request, the mapped route will automatically be updated to accommodate the new pick-up and drop-off locations. The riders split the fare on the shared portion of the route.

UniSIM's Dr Theseira cautioned against "regulatory concerns down the road" should these carpool services take off. He noted that there have already been concerns in other countries about criminal acts by Uber drivers. "It's not far-fetched to imagine that in the near future, a carpool rider could commit a criminal act against another rider."

In response, Uber's Mr Tseng said that when facilitating "millions of trips", such incidents will crop up, but remain extremely rare.

"Uber will always be on top of each of these cases; we have all the processes in place to manage these."

Dr Theseira, casting an eye down the road, said autonomous vehicles were the future of mobility - they would provide mobility, and obviate the need to own an expensive vehicle and even the need to learn how to drive. "Everything else is just passing time until the technology matures."

Uber Singapore's Mr Tseng, unperturbed, said global companies from auto manufacturers to Google and Apple all see autonomous vehicles as the future, and added: "We are equally bullish here. We have one of the biggest engineering teams focused on autonomous vehicles. Uber is definitely in the game."

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