The advantage of Uber has nothing to do with price and everything to do with grotesque incompetence on the part of the taxi operators.
Five-six years ago, when I asked for a receipt for an expense report, I got a hand-scribbled note. Running credit cards often required hand-based crank mechanisms. Autoplaying TV on the back of a seat that was billed unless you explicitly opted out. It was, in short, a scammy operation designed to squeeze you in all the impolite ways, and there was nothing you could do about it. When Uber/Lyft came on the scene, it took the scam out of the taxi industry and transformed the situation into one where you had a clear understanding of the price, where you could get a clear and reasonable receipt (emailed, even!), where you could pay with a card. You get a clear idea of how long the operator will take to arrive.
I had to use a taxi in St Louis, MO last summer. In order to do this I had to call the taxi company. No app, no website, nothing. It took 45 minutes to show up, period. The driver couldn't find me when he got near. I am very glad I did not miss my flight. It reminded me again of how deeply I support the "ride-sharing" services.
I consider the taxicab operations to be corrupt and effectively incompetent, frequently propped up by asinine medallion systems and graft at the city level. Therefore, I refuse to use taxis if Lyft or Uber are available. I will NOT intentionally contribute one red cent to these jokers.
Now, all of what the author said about Uber's flouting of the law is true. And that's not something I'm terribly happy about. But I think there's a certain value in simply ignoring bad law and fixing it on the fly. Might be the American in me, but so it goes.
In any case: if the taxi industry in Japan is honest, competent and well executed, Uber/Lyft will not have the profound advantage it has over the taxi industry in the US.
I feel your pain. That's what taxi service has been like for me in SF and LA. Also it was effectively non-existent except for calling to be taken to the airport because there were so few.
Japan, or at least the populated parts generally have tons of taxis so they are easy to find. They are polite and very clean, one thing western cabs are not. If they do something wrong (go the wrong way, end up taking the wrong road) more often than not they'll refund a portion of the fare without asking. I've had this happen a few times a year over the last 20 years.
Singapore is similar. Tons of cabs. In fact in Singapore you could book cabs in an app / online since like 2009. You get told the number of your cab so when lots of cabs are driving up you know yours is #27B-6. I had similarly nice experiences. I tried to tip a driver $3 for a $7 fare just so I could give him a $10 and he was like "too much lah!" and gave me $2 back.
I don't know how Uber is doing in Singapore but my understanding is not well. It's higher priced than local cabs for one.
My point being I agree with you. It's totally the taxis fault for providing sub-par service. In places where that's not the case Uber is having difficulty.
I suppose there's also the issue of car ownership though. For Uber to work you need people who own cars and are willing to drive them. Places like Tokyo and Singapore where most people don't own cars would probably make it harder to find drivers. I guess NYC has people from outside to drive in?
>Singapore is similar. Tons of cabs. In fact in Singapore you could book cabs in an app / online since like 2009. You get told the number of your cab so when lots of cabs are driving up you know yours is #27B-6. I had similarly nice experiences. I tried to tip a driver $3 for a $7 fare just so I could give him a $10 and he was like "too much lah!" and gave me $2 back.
Singapore's cheapness is due to its extreme levels of labor suppression. A couple of years ago they imprisoned bus drivers striking over unfair pay (they essentially had explicitly racist pay scales * ). They've deported and imprisoned other union activists. In the 80s the prime minister stepped in to break a strike in Singapore Airlines staff promising "I will, by every means at my disposal, teach you a lesson you won’t forget. And I’m prepared to start all over again. Or stop it!" and subsequently threw the strikers in prison.
The practical upshot if this is that they have huge income and wealth inequality compared to other countries less brutal to labor movements and the workplace cultures are usually "keep your head down and don't EVER criticize the boss" (small wonder very little decent software is created there).
Food and taxis and other similar services are embarrassingly cheap. If you're relatively wealthy and gaping inequality doesn't bother you, it's pretty awesome. It scores really high on those "economic freedom" measures because of this.
This is also partly why Uber - whose USP involves is capitalizing on other countries trending towards low wage commoditization by accelerating that process, isn't doing especially well there compared to incumbents.
In Singapore the 'racial' hierarchy is: Chinese Singaporean -> White -> Malay Singaporean -> Indian Singaporean -> Malaysian -> PRC Chinese -> Bangladeshi
The bus driver salary hierarchy was : Singaporean -> Malaysian -> PRC Chinese
PRCs are regularly denigrated with terms like "foreign trash" and "PRC scum" - they get the epithets much worse than most other immigrants - with the exception of Bangladeshis. I don't know why they look down on them with disdain given their shared ancestry but they do. If you want to see this racism for yourself, look at the comments of a website called 'stomp'.
In any case, the salaries accurately reflected the default prejudices of the society. It would be like if American bus drivers paid whites more than latinos who in turn got more than blacks.
They went on strike because of this and got beaten up and thrown in prison before being deported.
The salaries also reflect the negotiating power of people from somewhat poorer and much poorer countries. If they decided to lower Malaysian and Singaporean bus drivers to the same level as PRC, there wouldn't be any Malaysian or Singaporean bus drivers. The pricing of labor is exactly what you'd expect from economic and political incentives: don't lay off native labor, source foreign labor from multiple countries so they can't form a powerful union bloc, pay as little as possible.
Right. And the 0 compensation of slaves before emancipation in the United States reflected their relative negotiating power.
>The pricing of labor is exactly what you'd expect from economic and political incentives
Right. If you get the police to beat up union organizers and throw them in prison it does tend to exert downward pressure on wages - which was exactly my point.
That's partly why it's the "2nd best country" to do business according to CATO: docile, servile labor.
Note that the only disagreement I have here (that I felt like articulating) is that the pay scales are "racist." Though I do want to point out that prohibiting unions from forming based on racial or country-of-origin lines is obviously a very reasonable thing for a country like Singapore to do. And so is prohibiting strikes without notice, or strikes, period, in essential sectors -- if you don't like it, go work in a non-essential sector.
Don't know about Singapore, but they do it the same way as taxis the world over - they either find some place that's out of the way of traffic, like a side street or driveway (especially if the stop will take a while)... or they just sit there disrupting traffic and make people deal with it. Usually it's either a multi-lane road, or a smaller low-speed road where traffic can slow down a little and squeeze by. Not strictly ideal, but people cope.
The taxi stops are there simply for the convenience of drivers and people looking for taxis. Taxis can still stop and pick up passengers anywhere cars are allowed to stop (double yellow line).
What's the lah mean exactly? Heard it a lot in Kuala Lumpur but did not check then. Can sort of guess, but good to hear from someone who knows. Enjoyed being there.
>if the taxi industry in Japan is honest, competent and well executed
I've used Taxis in Japan across the country for 20+ years, can attest to its quality, reliability, and professionalism. It's on the expensive side, with rides usually starting at 700 yen (roughly 7USD) [1], but the drivers are courteous professionals who drive smoothly and know their cities and routes cold (if they don't, they'll apologize for not knowing and ask you for directions).
The only downside is that sometimes the drivers are cigarette smokers. While they won't smoke inside the car, the odor can be very noticeable.
[1] I believe this will be reduced to 500 yen soon.
One of my best friends is from a country without tipping. He's well-traveled and has something like 20+ stamps in his passport. He says he loves tipping. I was a little curious so I asked him why, he said in countries without tipping, service is shit. Moreover, the demeanor of everyone involved is shit. He said "you Americans don't know how good you have it". I guess even someone fake being nice to you in expectation of a tip is better than being treated like dirt because you disrupted someone's cigarette break in Paris.
He said the only exception to this is Japan. He says they have, hands down, the best service in the world. Whether you're in a family owned shop out in a rural area or some upscale joint in Roppongi, the people there actually care if you've enjoyed your food (and will nearly be offended if you try and tip them).
Thought his opinion was a bit odd, but I think it might be valid considering his experience and the fact that he's not a naive, anti-establishment 20-something. He's fairly pragmatic and a realist.
Nonsense. In my experience (granted not 20 countries but more than a dozen) the service is at least as variable and often worse in countries where tipping is common. Also, it encourages behaviour that exists only to extract a larger tip.
Just price the goods correctly so that I know when I start the transaction what I am going to pay, then I'm more likely to return to your establishment to enjoy the food and service.
That has also been my observation. However, where the US stands out alone for me in the developed world, is that tipping hasn't just become common in a few isolated situations - like getting something served at the table or getting ones' room cleaned. I can somewhat understand those because you as a customer can judge best how labour intensive / stressful your particular case has been for a low paid worker. But in the US it's everywhere. Why the hell do I have to tip a hairdresser? A taxi driver? A gas station serviceman? They have prices based on workload and materials anyway, so please, why do I have to figure out your correct salary for this interaction based on some arcane percentage system myself? This, at the end, is just what I call unprofessional. If you want to see how professional the service industry can get - as others have pointed out - just visit Japan.
Hmm, from my years in New Zealand, I can't say service was any less good than it is in the U.S.. There were more "pay at the counter and take a number to your table" establishments, but usually that was for classes of restaurant where that model totally made sense (e.g. pubs).
I'm told that Switzerland is a no-tip country, but the service there was excellent the two times I visited Zurich. I left tips anyway, because I didn't think the staff having to put up with my atrocious attempt at speaking German was part of their normal job description.
Why countries besides the US and Japan is he talking about? I live in the US and have received great service everywhere I've gone, including no-tipping countries like China, France, the UK, Spain, Italy, and Greece, so this doesn't fit my observations at all.
In Russia, such kind of services started way before Uber just as the next step in the evolution of taxi companies, benefitting from the same things as Uber did: no regulations, no taxes etc. The first apps were targeting JavaMe phones! So, from the Russian perspective, Uber is just another competitor in the flooded market. We were actually surprised that Uber is treated as an innovative startup in the USA.
A few years ago I was living in Boston across the harbor. The only way to get there is via subway (which closes at midnight) or via car through an underground/underwater tunnel.
If I hailed a cab and make the mistake of disclosing my destination before getting in the car, they'd usually just drive off without saying anything. If I got in the car before telling them where I was going, they'd often start making a fuss and listing off excuses as to why they couldn't go there, and I'd basically have to "force" them to drive.
Totally agreed. I am on a business deal that brought me to the country of Qatar. Many of the yellow cabs here (blue over here) refused to turn on their meters instead trying to negotiate a fare with you -- often starting at 2x or 3x the actual fare and trying to see how much upside they could keep. They would be nice initially and then try to arm-twist you at the end of the ride. Uber arrived and caught on like wildfire. You didn't need to negotiate, they didn't need to pretend not to have change, etc. The no-nonsense system is what makes Uber so remarkable.
I mean it really depends... like in Morocco this never happens, unless you look foreign. All taxis have a number on the top of the car, so you can just easily report it. And the penalties for drivers are actually quite harsh, even just referring to 'I know the taxi number' means he's shutting up, turning on the meter and getting you to where you need.
You can still have a shitty experience, but for locals it's mostly fine. I doubt Uber will take off there in any big way. I'm wondering if that's the same way for Qatari locals, or if there was another reason for Uber to catch on.
In many countries Uber is just another taxi brand, one that's licensed by the local authorities. The only thing it has going for it is the app, but all their competitors have apps too. Plus, I've never had to use an app - I just call an automated number, press one digit and a taxi arrives at my door within a few minutes. If I'm using a mobile phone then the operator answers.
Maybe - but in many countries it isn't. In my European country, calling a cab means always talking to the operator (often after 2m ringing) and then waiting 10-30m. Around 10% of the time it never comes, so you'll have to call again. When it finally does, your reward is paying an extra fee for having called.
Then there are the zones; your home is a bit outside the city? The meter will be running - at an increased rate! - before the car even arrives.
Never had that problem here in Edinburgh - been using the same cab company for years (both personal and business). They have an app or an IVR system or an operator.
Never had a missed cab, cars are always very clean and drivers good. I honestly can't think of a single problem I've had with them in what must be 15+ years of regular use.
Absolutely the same case in India and then some more.
I would argue that Uber (and Ola) have raised my standard of living as far as transport is concerned. I've stayed in Bangalore & Chennai and have travelled in a few more cities.
All problems that you mention ring true here plus an additional things - most taxis & autorickshaws don't even run on the meter. Every ride involves a ritual of haggling the price. If you're new to a city, it is certain that you would be fleeced. Then, many would deny the ride to a destination if it is not a hotspot. On few days I've take the local transport, I get dropped off a kilometre away from my home and have to walk the rest.
I would never take a local taxi or an autorickshaw if there is an Uber/Ola available.
> Now, all of what the author said about Uber's flouting of the law is true. And that's not something I'm terribly happy about. But I think there's a certain value in simply ignoring bad law and fixing it on the fly.
And this is the problem. Uber is providing superior service for less cost. Clearly the city, which enacts laws on my and other tax payers behalf, isn't actually acting in my favor when it goes after uber and lyft.
If we manifestly don't need the laws protecting the taxi racket then let's do away with the regulation -- not pile more on.
Trying, plus $5, will get you a Starbucks latte. Results are what count. I couldn't care less about the motivation behind regulations, just the outcomes. The outcomes in many places are that taxis are inferior in every way.
> The advantage of Uber has nothing to do with price and everything to do with grotesque incompetence on the part of the taxi operators.
Which is why in Europe things like Hailonand MyTaxi are taking off. They put a level of indirection between you and the driver by handling the payment and receipt. They are great as a result. The rest of the uber experience I care a surprising little amount about.
"I had to use a taxi in St Louis, MO last summer. In order to do this I had to call the taxi company. No app, no website, nothing. It took 45 minutes to show up, period. The driver couldn't find me when he got near."
This is almost all true and ride-sharing has totally changed the game in St. Louis. One nitpick: the area's biggest cab company has had an app for a few years [0]. It's not a perfect app, but I used it a lot before Uber started operating.
Yes. You need to figure out your address or cross streets instead of having your phone give your position with three meters of accuracy, you have to wait if the operator is busy with something else, you have no record of your request if they forget about you, the ETAs are often completely made up, you have no way to track your car and know when it's about to arrive, and get no identifying information about the car or driver that's picking you up.
Posibly the taxi companies need to invest in some basic sms/gps tech.
How it works for me is:
ring ring "hi can I have a cab to location I am at location y"
Dispatcher asks my name and "says that will be 10 min" I get an sms when the cab has been dispatched and another when it arives that says ita a silver priaus licene plate no xxxxx.
Yes, taxi companies could definitely improve. Many American taxi companies have become completely complacent about any new technology. In DC, they're still struggling to implement credit card payments!
While I don't know about this particular app, some taxi apps track the unit by GPS and show you where it's currently located, which lets you know wether the wait was warranted or not.
The article has a point but didn't get it right. I'm a startup developer and my family runs a taxi business in Japan, and believe me I thought about making Uber for Japan the moment I heard about Uber, but I realized it's not going to work out. Here are my notes I jot down at that time.
1) People don't drive
In US everyone drives, in fact you need one. But you see none of my friends in Japan own a car. The only people who owns one are people that are well offed. This is because owning a car in Japan is expensive (there is thing called 車検), a hassle (no parking), and getting a driver's license is long and hard. Supply is low.
2) Cash
In Japan most people still carry cash. Their preferred method of payments (in order) are: cash, Suica (debit card for train), and then credit card tied with NFC in phone that charges your phone bill. So Taxis are more convenient than Uber.
3) Part-time jobs are everywhere
You see it's very easy to get a part-time jobs. In fact most college students are doing it all the time. In US Uber looks attractive "I can drive and make money!", but in Japan it is "I just have to go to that place that dispatch part-time jobs and will make money".
4) Zoning
This is a bit similar to what the article talks about but in a different perspective. Don't forget that Japan fits in California. Each city have its own law and you need to pay a lot for each zone. My family operates in one district and have 2 competitors. Other district have its own. Each city have its own market and demand. You can't even pilot in a small region because if you drive 15 minutes you are already in another district, which you are not allowed to pickup. These zoning are strict, and japanese people know about it. It existed from the day yakuza used it as protection fees.
5) Anybody can be a taxi driver
You see its not hard to be a taxi driver if you really want to be one. These are called 個人タクシー and can operate on your own.
How big is smartphone penetration? Is the app based dispatch useful in japan or are they really everywhere? Are there normal taxi dispatch smartphone apps?
Preferring cash payments and taxes already being good enough is not supply side. Once self-driving taxis are available, they won't be uber exclusive. More likely all taxis will become self driving. If uber wasn't in the market before, it won't become welcome just because.
In addition to that, part of taxis service is human powered. Like helping you get luggage in a trunk and providing local knowledge. A taxi driver in Japan once told me they make most by driving old people from grocery stores back home. Will self driving car have a robot helping them with the bags?
As a westerner with incredibly limited Japanese language skills, I've found the interactions with taxi drivers in Japan to be amazing. Showing an address or saying a name of a restaurant / landmark will get you taken directly there. Even sometimes when the taxi doesn't fit down the smaller lanes (in Kyoto) - the driver will get out and show you to the door of your destination.
"In fact, there is a school of thought in the West that when the fines are cheaper than the cost of compliance, it is not only OK to break that law, but that the CEO has a fiduciary duty to break the law."
This claim seems absurd. Fiduciary duty is a legal concept, and for obvious reasons, there can never be a legal obligation to break the law. Americans might think it's ethically OK for corporations to break some laws. But a claim that a CEO had violated legal duties to shareholders by not breaking the law would get instantly laughed out of court.
I agree. And as Slavoj Zizek is fond of saying many (most) people are ok with someone doing the dirty work for them (break the law, torture, what have you) they just don't want to explicitly be told about it.
And anyway, if there's a better service to be had, that people want and are willing to pay for, screw the law, it's a high-latency side chain of authority that has built-in, but slow and political, update mechanisms, not the actual Word Of God.
To follow up on this, here is the full quote from Slavoj Žižek in conversation with Paul Holdengräber:
Zizek: Here I’m a little bit of anti-democratic pessimist in the sense that if you really ask people, cut the bullshit, what do you really want from government, I don’t think people really want that government should not torture people and so on, the point is do it but do it discretely I don’t want to know it.
The article basically states that Uber's cavalier attitude towards the law was the wrong approach to use in Japan, because the Japanese public does not respect this attitude, and that they should have worked it out with regulators before they started operations.
I guess the broader lesson implied is that you need to put in the effort to understand the local culture, and adapt your strategies accordingly, before you try to enter a new country.
That and, having taken taxis in Japan... they're honestly very decent. Much better than the taxis I've taken elsewhere.
Partly because the roads are less congested, even in the heart of Tokyo, since so many take the train. I never found myself wishing I could take an Uber in Japan -- a taxi was always there when I needed it... and that was only if I wasn't near a train station, which was almost never.
The biggest culture shock coming back to the bay area from a long Japan vacation was the taxi from the airport to a nearby hotel. The day before out return we had a driver in Tokyo who had approached it hotel from the wrong direction and had to drive around the block to get us to the front entrance. We were happy to walk half a block but he was very embarrassed and insisted to drive us to the front door and took way more off the charge than seemed reasonable and refused extra money we wanted to pay. Needless to say the car was immaculate.
The taxi at SFO was filthy and the driver got grumpy as soon a we told him that we were going to a nearby hotel. He ignored both the directions from his navigation system which he claimed was broken as well as our instructions and kept missing roads leading to the hotel that he claimed he couldn't find despite it being in sight and us telling him where it is. When I protested and told him that I'm concerned about having to pay higher charges because of his obvious mistakes he insured me to not worry that he would take that off the charge. When we arrived at the hotel he took less than 10% off and got rude and insulting when I protested.
Bottom line: I would not hesitate to take Japanese taxi any time even over an uber black. I can't wait for the SF taxi industry to completely collapse.
Edit: There is a flip side to this though. In Japan it was obvious to me that people take pride in their work. Even people who drove taxis out clean train stations. The resulting quality of work was astonishing. However, I also got the impression that these people are give respect for their good work. I don't think many taxi drivers in the US respect their own work and society for sure doesn't make them feel respected. Respect seems to be much tighter coupled to monetary success and I can't say I'm free from that.
> I don't think many taxi drivers in the US respect their own work
For me, taxi driving was a game: "I wonder who I'm going to meet today..." One of my passengers had been nominated for the Nobel Peace Prize. He didn't win - I picked him up at the homeless shelter. He was going to work, and was almost back on his feet...
Sometimes passengers remembered me.
Sometimes passengers provided the rest of the story for things I'd been wondering about, or confirmed 'tall tales'. Like the bartender who confirmed that the visiting NBA basketball players really did come into his bar that night... Months before, the other night driver on our little team had said, "YOU'LL NEVER GUESS WHO WAS IN THE CAB LAST NIGHT!"
> and society for sure doesn't make them feel respected. Respect seems to be much tighter coupled to monetary success and I can't say I'm free from that.
Plenty of my passengers let me know that they appreciated us.
Taxi driving has traditionally been a rough occupation. Drivers used to carry a lot of cash, and were seen as targets for thugs who were desperate for money. Cash isn't as common as it used to be, so taxi drivers don't have to project as much "toughness" as they used to.
I was always looking for a bigger picture, so I guess my experiences in the cab reflect that.
Yeah, when it comes to services in Japan, they go REALLY hard. In the hotel I stayed in, there was always a team of people standing by the entrance to the lobby just to welcome you inside, or tell you to have a nice evening when you leave. They had other people at the elevators with the same job: greet the people who come out of the elevators.
When we missed the shuttle to the train station, the shuttle manager apologized profusely, like they had done something wrong, when really we had just showed up a few minutes late.
This is basically it. Japan is a very service-oriented country. People take pride in how well they interact with customers from book stores to restaurants to taxis. This interaction assumes a certain level of honesty and it really changes how you interact when you exchange money with someone for something.
Not to mention that there is generally a line of taxis outside of most Japanese train stations and office buildings, ready to go at a moment's notice. Uber is actually slower, because the taxis are already right where you are.
That was one half of the reason. The other being that existing taxis are good enough.
A similar story is playing out in Hong Kong, even without the government cracking down as hard. There are some annoying taxi drivers, but for the most part, local taxis are cheap, fast and comfortable.
I'm not sure that argument really holds up. AirBnB is very popular in Japan (hosting not renting), tons of listings, all of them are breaking the law. (most of them are lying about their listings as well with AirBnB's blessings)
Legal short-term apartment rentals in Japan are kind of broken due to one month plus minimum stay requirements. Airbnb fixes an actual problem here.
I use Uber pretty much exclusively these days, but in Japan it doesn't make sense: in central Tokyo, you can hail a cab in seconds on any major street, and outside it, the nearest train station will have a taxi rank. And if you go out far enough that you need to call a cab, then Uber's unlikely to serve the area either.
Honestly, I got to the early paragraph where the author mentioned trusting government, and I was sad. Not trusting government is a great disadvantage to America in most times, but it's our great strength in the times it matters most, and I'm really afraid my generation has lost that thread. Government is great when it goes right, but it's a prisoner's dilemma with a strong bias against you when its wrong. The value of government can be huge, but it can just as easily screw you over, at whims driven by small scale petty politics. Government is great when working well, but the damage it does when not working well is worth avoiding giving it much power.
Better title would be "How Uber's Failure in Japan Can Help Multinational Corporate Expansions Everywhere". It's a bit of a stretch to still call Uber a startup, and even if you grant that, these lessons are not for startups.
I happen to have co-founded a multi-national startup. The best advice I have for going multi-national as a startup is don't.
> If the start-up core product isn't something that bypasses laws, why would it be bad?
This seams like a pretty naive rhetorical question.
Regulatory burden is different in each country. Look at github problems with Russia in the past. Or Google and EU's "right to be forgotten," worse yet, local politicians that make your business model illegal.
Also, culture / sales process is different in every country. VP of sales for North America is not going is going to have a hard time making a dent in Asia. The sales culture in Japan is very different from the one in China.
Some places have a culture of bribery to get anything done. And you know what the SEC/FTC can go after you in the US because the money goes through a bank in the US.
Now if you happen to have employees in that market place (and in some cases you're require to sell locally) you have to follow local labor which vary tremendously from country to country. Then you have local taxation laws, then you have your home countries taxation laws that deal with foreign sales.
If you multiply these headaches by say 10 or 20 markets. That's something very difficult for most startups (or even mid-size companies) to tackle.
> Was dropbox not a startup when it went to become available outside the US? Their expansion plans didn't require offices in each country
Dropbox being a self service product over the web is not a great example. Sure that can be a replicated by some segment of SaaS companies... but there's a lot more segments out there then SasS.
I think it also depends on where you are starting your company. If you are a US-based startup, you are already present in a massive market, and it may well make sense to focus on the US market only initially and only worry about selling to other countries later. Conversely, if you are based in a smaller country, then the small size of the country implies a small market which means limited domestic opportunities so the need to expand internationally early (even if just to a handful of larger markets such as the US) is much greater.
Every situation is different, I don't mean to preach like I know what is best for all startups, so take it with a grain of salt. MUBI definitely has a licensing burden, but it goes beyond that, even to very vanilla SaaS.
My thesis is this: if you can't get traction in one country, then acquiring customers in other countries is not going to make the difference which pushes you over the top. It may be the case that the country which you can gain traction in is not your own country, which will bring its own challenges but still doable. However, if there is not one single country which can offer you a sufficient market then I suspect that trying to piece together a customer base from many countries will drown you in overhead. You can make qualifications like English-only, USD-only, EST-business-hours-support-only, etc, etc, but at the end of the day each country has its own culture and you end up diluting your effort. This is to say nothing of regulatory or billing issues (note that accepting and clearing payments in other countries is a lot more involved than just looking at Stripe's supported countries list). My experience is that the human mind, especially the software engineer's mind, is very susceptible to building a mental model where going global appears to be a small marginal effort. You can even design your business plan that way and it still looks relatively tidy, but then once you get into the weeds you find a never-ending stream of details you overlooked. I guess this happens in all companies, but if you are serving multiple countries it's just more compromises you don't want to choose between: do I do something that sort of works globally, or something that really works locally? Companies that have some kind of physicality like Uber or Airbnb obviously have to think even more locally to individual cities, but for the average SaaS my instinct is country is the right granularity.
Sounds like Uber's failure in Japan is related to a reasonably honest and effective government.
The biggest failure of Uber that I'm familiar with of is ex-NYC New York, and that's essentially because the Feds are tapping every politician's phone at the moment[1], and it's difficult for their lobbyists to do whatever they do to "influence" outcomes.
Japan's Yakuza hasn't been a thing since the U.S mafia was a thing. They have similar political influence these days; little to none. They've either all gone legit, gone into grey area markets (pachinko, porn, etc) or flat out folded. Many have actually gone white-collar, getting into internet start-ups and investing in the stock market.
Japan has cracked down on the Yakuza governmental/political corruption so much so, that it doesn't exist anymore.
Don't get me wrong, the yakuza exists, sorta, but not in the same way they existed back in the 1970s or 80s when they ran the show. Things have changed dramatically since.
You know what, it's not going super well here in Sweden either. Can't say I'm sorry about that. There are some things I'd rather not "disrupt", one of these things is basic workers rights. I'd like to see Uber as masters of gamification. They've successfully gamified fast money, and screwing yourself (but perhaps mostly others) over in the long haul.
Uber and other type apps are successful disrupting traditional taxi services where a heafty price tag is on medallions.
Where countries like Japan who do not have a medallion system really, there is not much to drive prices up for taxi fares for Uber and like to undercut to be successful.
A good taxi and transit system isnt everything... I live near YVR, we have taxis lined up at YVR for convenience.
You are also paying way more cause first, the taxi medallions are so expensive... Then there additional fees for being licensed to do pickups at YVR in the designated area.
Everyone I know who commutes via taxi or transit wishes Uber types were here (banned).
Especially when u fly to DFW and the only options for a taxi is a broken minivan 20 mins later.
And then Uber being less than half and a lot quicker.
Convenience and cost. If Japan has those covered, then no reason for a Uber type to be operating there
About 5 years ago we had a new taxi firm open in my home town, the boss(es) invested heavily in technology, you could book via a text, app or call.
They had a ruthless focus on clean cars, uniformed drivers (I was talking to one of the drivers, if they where not clean and presentable he wouldn't put them in service), they'd even jump out and help you load your shopping etc.
You got a text with the drivers number and plate number and could even set it up so someone else got the same details (handy for parents, partners etc).
He absolutely decimated the local badly run taxi firms, the good drivers moved to him and the other firms had to run to catch up or die out.
It was fascinating to watch as an outsider the change across the whole city once word got out.
In Japan, taxi services fall into broadly 2 categories,
- large to mid size fleets 2000+ and - private 'kojin' taxis
There is yet another category commonly referred to 'izakaya' taxi, these are also private taxis who work together as a network to compete with the big players.
Things to know
* all taxis are clean
* some are spotless ie washed every morning
* 75%+ are equipped with wireless radio
* 90% of cars in general in japan have gps, so it should not come as a huge suprise to see taxis who have 2 units.
* Most of the big fleets accept every credit card under the sun including certain cards from some processors not too popular elsewhere (JCB).
Some accept nfc 'type' payments from several different incompatible processors.
* In the good old days 90s - you could call a cab company and they would radio (motorola) a taxi to your location. Now the big companies have apps developed by 3rd party vendors which support points for free rides etc.
People in Tokyo prefer the subway because its quicker in most cases- So you are left with
* people use cabs to get from pt a to pt b by making an on the spur of the moment decision. i see a cab i jump in. Uber would have a problem unless the fleet was huge from the get go.
* other people who 'plan' and use a cab can easily call one of the established players. Addresses are fairly resonably defined in tokyo and gps kits are excellect after having being engineered for 10+ years. Uber would have a problem because their software is not adding any value to what incubments are offering
* then there is this segment of people who use taxis for everything- thats where the izakaya taxis come in. They provide a first class experience using luxury grade cars (think lexus++) that are able to handle the longer distance rides, they might offer you a beer, tea etc. This is a premium service, you call the cab and he has you registered if youve used hiw before so he knows you by name. If hes busy enroute with another customer, he will just route you to his buddy. They mostly have 2 smart phones to help with this and they do this while driving with off the shelf apps well configured.
All factored in Uber's traditional model is challenged. But Uber hopefully has deep pockets, they should start by buying a small fleet and focus on certain/towns.
I don't understand where this notion that 90%+ of taxis in Japan have GPS comes from. I can only think it's from people how hang out in central Tokyo.
Even at the main Shinkansen station in Osaka, there's a 50% probability that a taxi driver wont have (or wont know how to use) a GPS. I've regularly had taxi drivers dig out dogeared maps to try and figure out where I want to go.
If you give an taxi driver and address, they often take you to the general location and then need help from there.
Good article, but I think the author understates a bit how hard it is for ANY foreign tech company to do well in Japan. You can almost always take your American business, apply it as-is (with some decent translation/localization) to major European markets, Australia, Canada, New Zealand, even South America, and so pretty well in most cases. Try the same in Japan, though, and you'll generally fail.
It's a wildly different culture in so many different ways, and there are tonnes of local competitors who are likely in your niche, but specifically targeting Japan, with an intimate knowledge of Japanese culture. The few foreign tech companies that have done well in Japan basically have a separate business and product just for Japan, like Yahoo Japan.
If you're thinking about investing significantly into entering Japan as an American tech company, you probably shouldn't, unless you're willing to invest HUGE resources into it (and even then, it's a massive gamble).
I think in many countries companies like Uber and AirBnB are seen to be a challenge to the democratic will of the people. It should be no surprise that we don't care very much for this!
I wonder if Uber could have achieved success in markets with more trusted governments (Germany, Japan) if they started with a softer approach.
Uber solves a problem in the US because the US government is failing to provide adequate public transportation and fails at properly regulating taxis.
In most other civilized places with governments that succeed in these areas, Uber just doesn't have product market fit. The legal problems are only producing noise.
Uber is much more efficient than taxis regardless.
For one, it uses the spare time and preexisting cars of regular people (which are cheap) and two, it has the algorithms and data to pool more than one person in the same car.
Uber is not uniquely positioned to pool multiple people in one car, to suggest otherwise is quite frankly ridiculous. Also there are no preexisting cars of regular people for Uber to take advantage of because regular people don't have adequate insurance.
> Uber is not uniquely positioned to pool multiple people in one car, to suggest otherwise is quite frankly ridiculous.
Of course they are, this feature is highly dependent on network effects and Uber is the biggest player.
> Also there are no preexisting cars of regular people for Uber to take advantage of because regular people don't have adequate insurance.
Besides the fact that most people don't give a shit about this, Uber does provide commercial insurance for UberX drivers while they are logged in: https://www.intact.ca/uber-ride-sharing
Really? I find that most people think it's the other way around, that Uber and AirBnB represent the democratic will of the people, challenging broken systems that the people do not endorse now that a better idea is available.
Here in Germany companies like Uber are largely perceived exactly as the author points it out, especially this stuck out in the article:
>Their significant price advantage comes from the fact that they choose to ignore a great many laws and regulations that their competition must follow.
Airbnb hosts routinely ignore zoning laws, hotel taxes, safety regulations and insurance requirements. Most Uber drivers do not have taxi or chauffeur licenses, obtain commercial insurance, pass safely inspections or comply with ADA regulations.
In my opinion Uber is nothing but a business that makes money by shifting every responsibility that an employer should hold on the drivers who function as pseudo self-employed individuals while Uber rakes in a quick buck. A business that any nation can do without. Companies need to be able to be held reliable to regulations and standards. Uber's whole model is incompatible with this.
At least with Uber I think Australian governments are getting it right because even after (imo) Uber acted in bad faith by ignoring the law, ride sharing is still being legalised. I think US governments are still a bit behind, especially as Uber has been there for longer.
I've always dislike the idea that "people vote with their dollars" because theirs no way people "voted" that all their dollars go to a 1% of individuals, who strictly speaking are rarely model or even popular citizens (.i.e. the Walton family).
I'm missing your point. In the example of Walmart, individuals chose to take there business there, enriching the Walton family at the expense of other merchants. While literally not voting for the Walton family to receive their business, a large number of individuals did make the choice of doing business with the Walton family didn't they?
I think in many countries the freedom to engage in gay sex is seen to be a challenge to the democratic will of the people. It should be no surprise that we don't care very much for this!
Those of us who are less democratic and more individualistic recognize how horrible it is when democracy prevents consenting adults from engaging in harmless private activities. The tyranny of the majority is still tyranny.
One is a harmless private activity - the other is a large company gaining an unfair advantage by choosing to ignore the law. Even though they are are both about freedom I think it's impossible to compare these.
> an unfair advantage by choosing to ignore the law
It's 100% okay to talk about this, but if we do talk about this, let's also talk about what happens when you get the local politicians to enshrine your particular business model in law and block all your competition from stealing your property - I mean, your customers.
You have this backwards, the incumbent taxi companies are the ones with the unfair advantage enshrined in law (medallions purchased 20 years ago for 1/10 of the price).
You make a convincing argument. We need to strictly regulate gay sex on public roads, and in all other places where it might endanger innocent bystanders. While we're at it, let's tax gay prostitutes who use our tax-funded public bathrooms for commercial purposes.
I'm confused what public roads have to do with anything. Does this mean you oppose regulation of private acts happening off the public roads? For example, if I want to employ people in a racist manner and pay them $3/hour in the privacy of my own bedroom, that's ok?
Or perhaps if the democratic will of the people decides that blacks must use a separate but equal set of public roads, that's also OK?
My only point is that appeals to the "democratic will of the people" are a dishonest justification for a policy. People are perfectly happy to ignore it when it leads to policies they dislike.
Correct. I favor ignoring the democratic will of the people and protecting individual rights. I make no pretenses about this, and I think the tendency of democracies to violate individual rights is one of their deep flaws.
I'm just pointing out that either a) you favor laws against gay marriage since the democratic will of the people supports them (and similarly segregation in the south in 1969) or b) your appeals to the democratic will of the people are dishonest. Which is it?
Are we talking about the "gay marriage" kind of gay marriage, or the "exposing people to the single biggest threat to life and limb, without telling them that you don't have insurance" kind of gay marriage?
Either way, I guess you caught me. I'm a giant hypocrite. I am of course quite angry at you for exposing my terrible secret. Fortunately for me, you are a supporter of individual rights against all laws and public consensus who will gladly support my right to hit you in the face with a piece of rebar.
I simply said "democratic will of the people" is a terrible justification for a law and can be used to justify all sorts of horrible things.
Similarly, on the safety issues which you bring up, I think you are also being hypocritical. If regulating safety is your goal, then either you should a) support banning gay sex, which is extremely unsafe and spreads disease to unwilling participants, or b) it's just another cheap excuse to pass laws against people you simply don't like.
It's not always perfect, but I'm interested to hear your alternative. What if not the will of the people should be he foundation of your government? Brute force? The will of God?
And yes, I do support a ban on gay sex that involves unwilling participants.
I think Uber's failure in Japan means the failures in Tokyo downtown and other large cities like Osaka. In those cities you don't have to wait much to pick the cars up. It's not the same like in SF. Discovering a niche market for Uber in Japanese large cities might be difficult.
Yeah, Japan does not really have the problem that Uber is supposed to solve. At least, not to the degree that we have in the US.
EDIT: however, I did see TONS of AirBnB (or the like) in Japan. Temporary housing is certainly a problem they DO have (at least in the cities)... perhaps even more than western nations...
Personal anecdote, we flew into Narita and the customs line caused us to miss the bus that would have connected us to Haneda for our next flight. We were certain we would miss the flight, but instead we got one of the best taxi drivers I've ever met.
From what I gathered, in Japan you basically pay a set fine for travelling over a certain speed. So he added that into the fare (vaguely recall it was 15% or so).
Long story short, after some very impressive driving we got there in time. I gained a massive appreciation for Japanese taxi drivers that day.
There are ultimately many reasons why US startups fail in some Asian markets (including China and Japan), and it can't be reduced to cultural differences or protective regulations.
Taxis are about 20% (rough estimate) cheaper than Uber in Japan. That, plus the already mentioned abundance and good quality of service of taxis in Japan (as well as the ease of booking one through phone/internet/mobile apps), leaves no real reason for most people to use Uber in my opinion.
Technology was sourced from different companies, it just so happens that this is how they chose to deal with this problem. From your link:
> In Japan, the western part of the country (Kyoto and west) uses 60 Hz and the eastern part (Tokyo and east) uses 50 Hz. This originates in the first purchases of generators from AEG in 1895, installed for Tokyo, and General Electric in 1896, installed in Osaka. The boundary between the two regions contains four back-to-back HVDC substations which convert the frequency; these are Shin Shinano, Sakuma Dam, Minami-Fukumitsu, and the Higashi-Shimizu Frequency Converter.
Uber is just a management that controls bunch of small entities providing a service. You can hate it or feel envy, but actually there are millions of companies with bad and foolish management that cannot even do their service at all.
I hope someday I'll see the company that will act as an umbrella to all service companies out there, and will filter out all those pretending fools unable to clean my carpet, install new furniture or repair pc. I'm really tired of this local 'legal market'. I need it done, not legal.
Uber may be fighting against the law, but when the government does not respect the democratic will of the people, it is actually ok and in the long run will benefit all.
I'm based in Helsinki, Finland and Shanghai, China (50/50). Two very different countries in all aspects. In both countries government used to regulate taxis and today China does not anymore but Finland still does.
In Finland taxis are very new (BMW, Mercedes Benz, Audi, Tesla etc.) and expensive (supported with tax payers money) and they are REALLY expensive to take. Way too expensive. This may sound ridiculous, but in my home town (major Finnish city) during the weekends it was common for people to walk home 7-10km after the night out, because taxis are so expensive. They are not seen as normal transportation service but instead more as a luxury service that you have to carefully consider before taking. They are still very safe, clean, have their own Uber-like app etc. Finns have demanded many many years (long before Uber) for the taxi-monopoly to be destroyed, but the government has happily turned a blind eye to them. Ubers in Finland are usually Toyotas or Volkswagens, quite new and clean. Prices are only 50-60% of traditional taxis.
So what about China? Taxis are old/medium-level volkswagens, little dirty, driver may be smoking inside the car, quite safe but there are many people playing with the meter or overcharging in some other ways. Some drivers are also really greedy and arrogant: They may ask you where are you going before letting you into the car and if they don't like the route they'll not take you. Anyway they are relatively affordable for average people in China. When Uber and it's Chinese competitor DiDi came to the market, the government was confused at first but later legalized them when they realized that competition will benefit all in the long run.
Now? Uber and Didi are extremely popular, significantly cheaper than traditional taxis, clean, safe and no more people have to worry about getting bullshitted with the cab fare.
So once again Uber made things better for all. Sometimes breaking the law in not only acceptable, but required for a greater good and change to happen. In Finland however it might take a while since the government is still living in their 1950s mentality and currently hunting down Uber drivers and suing them.
Some might say it's wrong that Uber is putting all the responsibility on the driver. You know what? It's not.
They know what they are signing up for and besides if Uber as a company was responsible for every single incident all over the world in every country, the company wouldn't exist anymore. No investor money could cover all those fines. The current way is the only way Uber can exist and only way the change can happen.
Five-six years ago, when I asked for a receipt for an expense report, I got a hand-scribbled note. Running credit cards often required hand-based crank mechanisms. Autoplaying TV on the back of a seat that was billed unless you explicitly opted out. It was, in short, a scammy operation designed to squeeze you in all the impolite ways, and there was nothing you could do about it. When Uber/Lyft came on the scene, it took the scam out of the taxi industry and transformed the situation into one where you had a clear understanding of the price, where you could get a clear and reasonable receipt (emailed, even!), where you could pay with a card. You get a clear idea of how long the operator will take to arrive.
I had to use a taxi in St Louis, MO last summer. In order to do this I had to call the taxi company. No app, no website, nothing. It took 45 minutes to show up, period. The driver couldn't find me when he got near. I am very glad I did not miss my flight. It reminded me again of how deeply I support the "ride-sharing" services.
I consider the taxicab operations to be corrupt and effectively incompetent, frequently propped up by asinine medallion systems and graft at the city level. Therefore, I refuse to use taxis if Lyft or Uber are available. I will NOT intentionally contribute one red cent to these jokers.
Now, all of what the author said about Uber's flouting of the law is true. And that's not something I'm terribly happy about. But I think there's a certain value in simply ignoring bad law and fixing it on the fly. Might be the American in me, but so it goes.
In any case: if the taxi industry in Japan is honest, competent and well executed, Uber/Lyft will not have the profound advantage it has over the taxi industry in the US.