BUSINESS

Where's that cab? Uber launches in Toronto with slick cars tracked by GPS

03/15/2012 12:12 EDT | Updated 05/14/2012 05:12 EDT
TORONTO - Betting that Canadian big-city dwellers are tired of dealing with cabs that take forever to arrive and the discomfort of sliding across grimy backseats, high-tech car service company Uber has brought its business north of the border, with a fleet of GPS-trackable luxury cars to compete with unreliable cabs and expensive private drivers.

Customers can use a smartphone app to trace exactly where their car is and precisely when it'll arrive. A text message is also sent by Uber just before the car pulls up.

At the end of the ride, the transaction occurs digitally so there's no fumbling with cash or collecting change for a tip.

Co-founded by Travis Kalanick and Canadian Garrett Camp, who is also behind the social media site StumbleUpon, Uber launched in Toronto on Thursday and is expected to hit Vancouver in a "few months." Montreal is also being considered.

"Our motto is: we're everyone's private driver. And that means taking this stodgy luxury that only the super wealthy had — an actual private driver — and bringing that to the masses," says Kalanick.

"It's an on-demand car service, you push a button and in five minutes a town car appears."

The service, already available in Boston, Chicago, Los Angeles, New York, Paris, San Francisco, Seattle and Washington, D.C., typically costs 50 to 60 per cent more than an average cab ride.

In Toronto, however, Kalanick said the premium was scaled back to 30 to 35 per cent because cab prices were already so high.

"We look at what taxi prices are, what disposable income is like in the city and also what do black cars cost," he said, noting that Uber hooks up with local limousine operators to provide its service.

"Taxi prices being so high in Toronto, we definitely scaled down the typical premium that our prices have on top of taxis."

Kalanick says two-thirds of its rides are personal, ordered for fancy nights out or by customers willing to pay a premium for the Uber experience. The other third of its business comes from the corporate world, which made Toronto a good fit for expansion.

"This is one of the world's major cities and it's certainly the economic and financial capital of Canada," said Kalanick.

"It's really dense, there's a lot of folks, a lot of professionals here — a lot of young professionals — and a lot of people who live in the city who need an alternative way to get around, so it was kind of a no brainer actually."

Uber, which got started in San Francisco in 2010, will face a direct competitor in Toronto, a small start-up company called Winston, which launched an almost identical service late last year. It does have a slight advantage over Uber in that its rates are a little lower, it has a dedicated BlackBerry app — Uber only works with iPhones and Android phones or by text message— and it allows customers to pre-schedule rides.

But Kalanick says he's not concerned about the "Uber clones" in Toronto and elsewhere.

"Competition is good, I think at the end of the day superior service and superior experience is what wins so we'll be working really hard to make our experience really quality."