What is Uber?

Uber is a San Francisco-based technology company founded in 2009, which claims to be , but at its heart, it is a smartphone app that acts as a middleman between freelance drivers and passengers.

When a user opens the app, they are greeted with a map showing their current location, and the drivers in the vicinity. If they request a driver, alerts go out to those in the immediate area, one of whom accepts it. Because they tend to be nearby, passengers tend to be picked up within minutes.

Users are then charged a base fare of £2.50, plus 15p a minute and £1.25 a mile for a journey, with a minimum fee of £5. Uber takes a cut, with the driver paying the rest, as well as paying for fuel, maintenance and so on. Users must give their credit card details before using the app, and the fee is taken off the card at the end of a journey.

There are various levels of Uber, from the standard UberX to more luxury-style services. Prices can also rise if there is excess demand, which Uber calls .

Uber: fare structure
Service Base fare per minute fee Per mile fee
UberX £2.50 £0.15 £1.25
UberEXEC £4.00 £0.30 £2.40
UberLUX £5.00 £0.55 £3.55
UberXL £7.00 £0.15 £2.10

Fares subject to Surge pricing (Source: uber.com)

Why is it controversial?

Uber is regulated as a private hire vehicle operator, also known as minicabs. These are regulated differently from taxis – minicabs have more freedom over setting fares, can’t be hailed in the street or at a rank and don’t use taximeters. Drivers also don’t need to pass The Knowledge – cabbies’ tough exam of London’s geography that can take years to learn.

When the rules on minicabs were introduced in 1998, Uber and smartphones were still years away. To arrange a minicab back then, one would have to phone up a company and give them an address, with the company then sending out a car out to pick them up. This meant that if you just wanted a ride straight away, you would hail a taxi.

TfL black cabs: fare structure
Distance Approx journey time Mon-Fri (06:00-20:00) Mon-Fri (20:00-22:00) Sat-Sun (06:00-22:00) Every night (22:00-06:00)
1 mile 6-13 mins £5.60 – 8.80 £5.60 – £9 £5.60 – £9 £6.80 – £9
2 miles 10-20 mins £8.60 – £13.80 £9 – £14 £9 – £14 £10.40 – £10.80
4 miles 16-30 mins £15 – £22 £16 – £22 £16 – £22 £18 – £28
6 miles 28-40 mins £23 – £29 £28 – £32 £28 – £32 £28 – £33
Heathrow – Central London 30-06 mins £45 – £85 £45 – £85 £45 – £85 £45 – £85

Source: tfl.gov.uk

Since then, smartphones and their location sensors have sped up this process significantly. You can’t hail an Uber in person, but doing so with a smartphone is almost as quick – on average it’s three minutes in London, according to Uber.

Meanwhile, Uber’s smartphone software acts like a meter in many ways – recording the time and duration of a ride to set its price. In effect, Uber has narrowed the convenience gap between private hire operators and black cabs, but without the latter’s regulations.

Cabbies and traditional private hire operators say Uber is taking advantage of the rules, while Uber itself says it is simply giving customers what they want – and it’s not its fault that black cabs are overregulated.

Marble Arch to Westminster: How taxi quotes compare
Company Average fare quote
Addison Lee 9.25
Black cab (Tariff 1) 10
Black cab (Tariff 3) 14.94
UberX 6
UberX (1.9 surge) 11.4
UberX (2.5 surge) 15

Source: Addison Lee app, Hailo app, TaxiFareFinder.com, Uber.com

So what’s happening now?

Transport for London consulted on new rules for private hire vehicles earlier this year and has now launched a new consultation on a list of proposals that it says will bring regulation up to date.

According to TfL’s consultation, it wants to “improve passenger safety” and “maintain a clear distinction between the taxi and private hire trades… further improving the quality, safety, accessibility and overall standard of private hire vehicle provision in London”.

Many of the proposals would hit Uber particularly hard. They include a minimum five-minute wait between ordering a minicab and it arriving, and banning showing available cars within an app.

Uber has said that if these proposals were adopted it “would mean an end to the Uber people know and love”. It has urged its users to sign a petition against them, and almost 100,000 have signed it. It claims regulation should be relaxed on cabbies, not tightened on Uber.

TfL, meanwhile, says that no final decisions have been made but that the proposals could raise standards.

The consultation is due to end on December 23.