In September 2024, Kate got off her flight from Sydney at Melbourne Airport and went straight to the Uber pick-up zone, conveniently located right outside the airport terminal exit. It's a routine she follows many times a year for work trips.
After waiting in a queue for around 45 minutes, her husband texted her to tell her there was industrial action by Uber drivers and they weren't taking pick-ups from the airport.
"I needed to be in the city for a meeting urgently so I asked the Uber employee (who monitors the queue) where the taxi rank was and he said there was no taxi rank, which is a lie," she says.
She eventually found the taxi rank hundreds of metres away. It had a short queue and she was in a taxi on the way to the city in minutes.
"When you've just gotten off a plane you just care about convenience and getting out of there as easy as possible, usually that's Uber, but it's not always the case," Kate says.
Uber's priority location at Melbourne Airport is exclusive to the company and other rideshare competitors like Didi have to use another pick-up zone further away. The taxi zone is also less conveniently located than the Uber zone.
Uber's priority location at Melbourne Airport is exclusive. Other rideshare competitors like Didi have to use a pick-up zone further away and the taxi zone is also less conveniently located
Neither Uber nor Melbourne Airport would tell us how much the rideshare company pays for its prime real estate arrangement, but Melbourne Airport says they average around 5000–6000 Uber pick-ups a day, or 1.8 million a year.
"Melbourne Airport caters for around 100,000 passengers a day, but with limited space on our arrivals curb we need to make decisions on space allocation that reflect customer preference and demand," a Melbourne Airport spokesperson says.
Uber it
Like Google or Band-aid, the word 'Uber' has basically become a noun in Australia, synonymous with the act of booking a rideshare from point A to B.
And Australia is the most Uber-dense market in the world, with almost 20% of the overall population having taken a ride in a single quarter in 2023 – a greater proportion than any other country, according to the company.
As competitors like Ola and GoCatch have folded in Australia, one analyst estimates that Uber now controls around 80% of the rideshare market, not including the taxi industry, which remains a major force.
Australia is the most Uber-dense market in the world.
Not always a smooth ride for Uber
Uber has also been mired in legal troubles for years.
In 2022, Uber was forced to pay $21 million in fines for misleading and deceptive conduct in a case brought by the Australian Competition and Consumer Commission (ACCC); and in 2024 a class-action by taxi drivers over Uber operating illegally when they first launched resulted in a $272 million settlement – one of the biggest class action wins in Australian history.
Currently, Uber is facing lawsuits over alleged unlawful corporate espionage and anti-competitive behaviour against GoCatch, and a separate suit about allegations of disability discrimination against a blind customer with a guide dog.
The company denies any wrongdoing in the GoCatch case and says individual drivers must comply with disability discrimination legislation relating to guide dogs or face being banned from the app.
When rideshare players like Uber entered Australia in the early 2010s, CHOICE hailed them as a win for competition and consumers looking for a ride. But has the pendulum swung too far? Is the technology giant's market-dominant position in the best interest of customers, or is the monopoly position they hold stifling competition and increasing fares?
Capturing the market
Uber first launched in Sydney in 2012 and since then has grown aggressively to be by far the biggest player in the rideshare gig economy industry.
Uber Australia's ridesharing revenue grew in 2023, reportedly to $646 million – well above its nearest rideshare rivals, Didi, at $14.3 million. The company's global profits – the combined figure of revenue minus expenditure – have previously been much more modest, and most years it has run at a loss.
Taxis still hold a significant market share too, with A2B, Australia's biggest taxi company and owner of 13Cabs and Silver Service, bringing in $147 million in revenue in 2023.
Allan Fels, former ACCC chair, says Uber has substantial market power in Australia, even if competition from Didi, and taxis, prevents it from being labelled a pure "monopoly".
Uber's market-dominant position puts consumers in the crosshairs when prices surge
Rod Barton is a former taxi driver and a former MP in the Parliament of Victoria. He says Uber's market-dominant position puts consumers in the crosshairs when prices surge – a reference to when the app's algorithm inflates the price of a ride in times of peak demand.
"You've got this problem when it starts to rain, or when Collingwood is playing Essendon [in the AFL] and suddenly the price gets out of control," he says, adding that it becomes a problem where taxis ask for a set price instead of turning on their meters (a practice that is illegal unless the trip is pre-booked) or refuse shorter trips.
"The government has really lost control of this space," he says.
Taxis still hold a significant market share.
Surging ahead
Asked whether he thought Uber used its market position to the detriment of consumers, Fels, who served on – but later abandoned – Uber's Global Advisory Board, said that there is no law in Australia that prohibits high prices.
Dr Rohan Miller from the University of Sydney Business School says more competition in the rideshare market could benefit consumers at times when the Uber price is surging.
"As a consumer you should see them as interchangeable, not enough people are playing this trade-off game between the prices of taxis versus the prices of Ubers, working out which benefits you," Miller says.
The benefits of having one big player
Independent transport and infrastructure expert Marion Terrill says there are network benefits for consumers of having one player, such as Uber, dominating so much of the market.
"When I'm a rider, what I really value is my ride turning up quickly. So the more people choose Uber rather than some other service or taxis, then the more likely it is that I'll get matched with a driver more quickly. It's the nature of the service that density of users and providers is good for consumers," she says.
Terrill adds that even price surges, which can be annoying and financially detrimental for customers, serve to encourage more drivers to get on the road and work for the app, as they can earn more money at a quicker speed.
"You don't want a situation where every driver is working a set shift. The idea is that you can have a more responsive supply of drivers, I think that's a good thing," she says.
A driver's experience
Jay Young has been driving Uber in Newcastle, NSW for over two years and says he appreciates the flexible hours and his ability to fit trips around his chauffeuring clients.
He says the surge pricing map shown to Uber drivers does influence where he goes and the hours he works.
"I'm able to kind of make a decision, I'm gonna head over there and then I'm gonna try and get a trip with a reasonable amount of surge on it just to boost your earnings. Because without the surge, the earnings aren't fantastic," he says.
Without the surge, the earnings aren't fantastic
Newcastle Uber driver Jay Young
"Obviously, you're gonna do what you can in order to boost those earnings, and if that means working those unsociable hours to 3am or 4am in the morning and dealing with the drunks, that's what I'm gonna do," Young says.
Young, a member of the Transport Workers Union, which represents rideshare drivers, says Uber should be committing to minimum pay and conditions for drivers and also paying things like superannuation. But he says he keeps driving with the company regardless, because the earnings are better than with Didi or elsewhere.
"If it's a particularly slow period, then it can be really a struggle and you have to push yourself to work more and more hours to make ends meet," Young says.
Uber responds
A spokesperson for Uber says the company operates in a competitive environment, but declined to provide figures on their share of the market compared to taxis, citing commercial sensitivity.
"The advent of ridesharing has offered greater choice and improved experiences for consumers across the point-to-point transport industry, as well as new earnings opportunities for hundreds of thousands of Australian workers," Uber says.
"Aussies have many choices when it comes to how they get around town, and the local environment remains competitive for point-to-point transport players. Australians regularly use Uber as a safe and reliable choice to get from A to B, and governments across the country have recognised ridesharing as an important part of the transport mix," the spokesperson adds.
Eventually the capital runs out and you have to be a company that turns a profit
Professor or Planning at University of Queensland, Neil Stipe
Neil Sipe, professor of planning at the University of Queensland says Uber has succeeded in completely disrupting the rideshare economy in Australia as well as in many other countries in the world. Now it faces the challenge of turning its market position into a regular and consistent profit.
"Amazon went over a decade without turning a profit based on venture capital investment. There was lots of revenue, but not much profit. Uber is operating off a similar model, but eventually the capital runs out and you have to be a company that turns a profit as well," he says.
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