Marketplace Car-hail service Uber fears no backlash from Prague launch
Prague has recently become the latest city where the smart-phone based car-hailing service Uber has become available. Since its launch in San Francisco in 2009, the app has become popular around the world. However, in many cities, the company faces protests by disgruntled taxi drivers as well as official bans over safety concerns. I sat down with Uber’s head of expansion for central Europe Patrick Studener, and first asked him why they picked Prague as their first location in the region.
“I think people here are very progressive and smart-phone penetration is higher than in many western European cities for example. All these factors come into play, and the size of Prague as well makes it a very interesting city for us, and we are proud to be here.”
When you were considering expansion in central Europe, was there any kind of tight competition between Prague, Warsaw and Bratislava perhaps, or was Prague the obvious candidate?
“I think there are numerous factors. We do have a bricks-and-mortar office in every city and we hire local people; one of our biggest jobs is hiring the right and the best people. Sometimes, we are thinking that these are the next three we want to do and maybe if we hire a couple of people in city quicker than in the others, it makes sense to go there first.
“Beyond that, we have a list of several cities. In the end, the idea is to get Uber to as many cities as possible because we get a lot of inquiries, ‘hey, when are you coming to Prague?’ from both people who want to use it and companies that want to provide their services using Uber, so you want to hurry and get to as many cities as quickly as possible.”
What are Uber’s ambitions in Prague in terms of market share or the number of vehicles or other measurable criteria?
“You know, people always ask me this question but for us, it’s not so much about market share of a specific number of cars on the road. For us, it’s more about getting what we call the estimated time of arrival, or how long it takes between you pushing the button to a car getting to you, under five minutes.
“Obviously, as the city grows and the number of users grows, the amount of cars in the system needs to grow to maintain that number. So what we want to do is as quickly as possible to get to that number so that you always see there is a car within five minutes of you.”
Do you know how many cars you need in Prague to achieve that?
“That grows as the city grows. We are on day three now so obviously, there are probably a lot less people using the app today than in a year’s time from now. So it has to grow but there are no exact numbers there.”
Prague’s taxi market has a notorious reputation for ripping people off. Was this an issue for you when you were planning to come to the city?
“No. We benchmark ourselves just on ourselves so we try to continue to strive to improve our own services. In new cities that we go to, we obviously partner we very high-quality limousine services, or as you call them here, contractual service providers.
“We want to provide a quality product, a high-end car with a driver that gets you where you want to go. If that’s the service you are looking for, it’s one further option now in Prague and everyone can choose whether they prefer that to other alternatives.”
So you didn’t take any extra care when choosing drivers or companies that are working with you here?
“We are a technology company so we don’t own cars or hire drivers. We are a platform and if you are a professional limousine service that meets all the requirements to operate limousine vehicles in Prague, and we feel that your company and your drivers are of high enough quality, then you’re allowed to offer your services on the platform.
“We have a very high bar for that quality to ensure that every time you get in a car, regardless of who the drivers are and what the car is, you have a great experience.”
Do you insist that the drivers who work with you have black limousines?
“The name of our original product is Uber Black because the standard executive car tends to be a black car. But we do see that in a lot of countries, these are also silver cars; in Dubai, for instance, all the cars are white because you would fry in a black car.
“But the product is called Uber Black because traditionally, a majority of executive cars are black. But they don’t necessarily have to be black so if you get a silver car, don’t worry, it’s ok as well.”
What about red cars?
“Well, you probably would not see that many red cars now. So it does tend to be black or silver.”
You have launched a limousine service in Prague – are you also planning to launch the car-sharing service in Prague?
“When we launch new cities, we tend to lead with our flagship original product, the Uber Black product, and then as the city progresses, we look at what other products the city needs.
“There are several products that we have around the world: we have the ride-sharing product, in some cities we see the need for larger cars so in the US, there are a lot of cities where we have Uber SUV. In Europe, there are some cities where we have Uber Van while in some cities like Amsterdam or Sydney we have Uber Boats because there is a lot of transport on the water.
“This is our first week here and we are focusing very much on the Uber Black product but as every city grows, the local team will evaluate what other products might add value to the city. And it’s also what people ask for. We want to provide what the people want and need.”
The owner of one of your competitors in Prague, a firm called Tick Tack Taxi, said he did not expect you to last very long here because he believes your service breaches the law on taxi services by not complying with the licencing requirements. What do you say to that?
“That’s incorrect. I think there is still a lot of confusion, and many people might think we are a taxi app. But you don’t push a button and a couple of minutes later, a car that says taxi on the side and has a taxi lamp on the roof shows up.
“You know those guys who stand at the airport with signs that pick you up in executive cars – that’s what this service is. It’s an unmarked contractual service provider. Those services existed before and we are just making it easier for people to connect to them.”
But several cities have banned Uber, most recently Berlin where the authorities said Uber was using ‘unverified drivers with unlicensed vehicles’, and was leaving passengers uninsured in the event of accident or injury. Are you concerned this could also happen in Prague?
“There is also a difference between the Uber Black product which are all professional limousine services, and then the Uber Pop product in some European cities which is the peer-to-peer sharing product.
“It’s quite innovative and new and regulation often tends to lag behind innovation so they need to play catch-up and potentially update some of the laws written in the 1970s and 80s to come with the times and corporate technology.”
I understand you did not approach Prague City Hall which regulates the taxi market here.
“We connect with existing limousine operators who are already licenced and regulated by the city. We are just another way for people to connect to those who have already been licenced.”
Finally, what are Uber’s plans for further expansion in the region? Are you perhaps considering other Czech cities as well?
“It’s a really exciting region. I think people in central Europe want more transport options in their cities and with every further option, someone has to decide, ‘do I still need to own my car?’ I think in Prague as well, you have services that offer the ability to rent a car for an hour or a day, and there are many cities that offer the ability to rent a bike for an hour or two. You have street cars and trains, and with all these options, someone has to say, ‘can I now just use all these options to get around?’
“We definitely have our eyes on a couple of cities in the region, and I think also within the Czech Republic. But we are on day three in Prague now so we are focusing a lot on Prague, and then we’ll see how it goes from there.”