Why don't taxi companies just become like Uber? originally appeared on Quora - the place to gain and share knowledge, empowering people to learn from others and better understand the world.

Answer by Peter Ashlock, Uber driver and former San Francisco cab driver, on Quora:

Uber and ride share companies use a false economy because they have sold the public an illusion that will not sustain. They have temporarily made up a situation where by the company and the driver subsidize the cheap price of the ride.

The company is doing what it can to kill off competition by subsidizing with start up money (that will have to be paid back or they lose credibility with investors) and by the drivers who are destroying their cars in order to get fares.

A taxi company by comparison is regulated by the Public Utilities Commission that sets the rates so that both the company and the driver get a fair return for the cost of the ride the public pays.

A cab driver pays a company a fee (the "gate") every time they go to work. It might be in the neighborhood of $100 a day in a city like San Francisco. That money buys the driver the use of the car (with a unique color scheme and logo and lighted sign) as well as all maintenance covered by the company. The driver is free from concern about liability insurance, oil changes, transmission failures, tires, brake jobs, etc. The money also pays for operational expenses to the taxi company that owns the car. The cab driver pays for gas out of their income.

That is what you are paying for in a taxi ride. The car's quality depends on the companies ability to properly maintain the equipment. Some taxi companies are better than others.

With ride share cars you are at the mercy of the driver who is not a licensed professional, and who will likely not drive full time and soon realize that the cost of doing business in this model is so high for the driver as to be break even or perhaps at a loss eventually.

Thus the ride share model is appealing to customers who like cheap rides and who do not realize that it will not last, that any such "driverless car" in the future will be charging them for the use of the equipment that they are currently expecting the driver to pay for.

Thus far, the ride share business is floating on a series of illusions, inflated by the hubris endemic to the tech community. It will not last in this current form.

This question originally appeared on Quora - the place to gain and share knowledge, empowering people to learn from others and better understand the world. You can follow Quora on Twitter, Facebook, and Google+. More questions:

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Published on: Feb 2, 2018