Tag: Sydney

Uber’s New Year’s test

New Years Eve 2012 is going to be a tough test for the Uber hire car booking service as prices surge.

Update: It appears Uber passed the New Year’s Eve test without problems. There were almost no complaints at all.

New Years Eve 2011 was a tough night for customers of the Uber hire car booking service in New York City when fares surged as partygoers headed home.

This year, Uber hopes to overcome problems by making sure customers are aware with big warnings of prices and even a sobriety test so users can confirm they know what they are doing when they agree to catch a cab.

Uber’s dynamic pricing matches supply with demand, which means a more reliable service but also opens the company to allegations of price gouging during busy periods.

Those allegations are exactly what happened in New York last year and in 2012 Uber’s risks of bad publicity are far higher as the service is now international with operations in cities like London, Paris and Sydney.

Sydney will be the first city to encounter the effects of surge pricing and big risks lie in the Harbour City as Sydneysiders are used to fixed cab fares and enjoy a good whinge when things don’t work in their favour.

Over a million people are expected on the shores of Sydney Harbour to watch the New Year’s Eve fireworks which means cabs and hire cars are at a premium.

If Sydney has the triple fares expected in New York then Uber’s fare from Circular Quay to Bondi Beach will be around $150. This compares to the standard cab fare of around $30.

Those markups will be exploited by the incumbent taxi companies and booking networks. We can expect a wave of stories over the next few days from tame journalists regurgitating the incumbents’ media releases.

How Uber’s Australian management deals with this will be worth watching. One hopes they are prepared a tough week and don’t enjoy the festivities too far past midnight.

Another problem for Uber is going to be Sydney’s mobile data networks which are horribly unreliable during peak periods. It may well be that Uber’s customers and drivers never get a fare anyway.

Last year I was near the Habour Bridge and didn’t have a Vodafone signal from 8pm onwards. I’ll be comparing the performance of all three Aussie networks from the same place tonight.

Desperate Ken and market realities

Adam Smith’s invisible hand of the market is giving some people a nasty slap over the head.

Ken Slamet has a problem, his in-laws are trying to sell the family house and no-one will give them the price they want.

The house at 228 Warrimoo Ave has been on the market through an agent for more than 100 days, pulling in ridiculously low offers, Mr Slamet said.

Depending on the deposit, Mr Slamet is seeking between $1.5 million and $1.6 million for the house his wife grew up in.

One would argue that those “ridiculously low offers” are actually Mr Market giving Ken and his in-laws a slap of reality. They are simply asking for too much money.

St Ives, a suburb on Sydney’s Upper North Shore, is going through demographic change. In 1960s and 70s St Ives was the suburb for successful stock brokers and bankers, however in the 1980s and 90s that demographic decided they wanted to live closer to the city and Harbour and suburbs like Mosman and Clontarf became their areas of choice.

For Ken’s in-laws and their neighbours, this is bad news as few other people can afford 1970s mansions on large blocks within 30km of Sydney. Those who do manage to sell often find the buyers are developers who sub-divide to build townhouses or apartment blocks, madness in a congested, car-dependent suburb with poor public transport links.

Adam Smith’s invisible hand of the market is giving those holding properties that were attractive to stockbrokers in 1972 a nasty slap over the head in 2012.

Ken though has a solution for his problem – he’s offering a rent to buy scheme at a mere snip of $2297 per week. An amount 70% higher than the average Sydneysider’s gross income and a whopping four and half times the city’s average rent of $500.

Good luck with that.

The real problem is that Ken’s in-laws are stuck with expectations higher than the market reality. Like many of us in the Western world, they believe their assets are worth more than they really are.

As the global economy deleverages there will be many more people like Ken’s family. For many the transition to a less wealthy lifestyle is going to be tough.

Travel review – Jetstar JQ406 Sydney to Coolangatta

Jetstar delivers on the low cost operator promise, just don’t expect anything more than a flight.

One of the delightful aspects of the low cost airline model is the contempt management has for their customers.

That scorn for the people who fund management’s salaries is guilty pleasure to watch on a third rate TV “reality” show, but it’s not fun when you’re on the receiving end.

So with a fixed smile and a grim determination not to to let the bastards grind me down, I headed to Sydney Airport to catch Jetstar’s flight JQ406 to the Gold Coast

Check in

It’s no conincidence people make reality TV shows documenting the clash of penny pinching, ticket clipping corporatism with the modern lumpenproletariat; the queues are long and the tempers are frayed.

The key to your temper surviving Jetstar’s check in is not to have checked baggage so you can dodge the general grumpiness in the queues.

Otherwise have your all your documents handy when you get to the check in clerk as they are quite friendly once they realise you aren’t going to mess them around.

Seats

A positive with Jetstar is the seats are spacious and comfortable compared to their Virgin competition and Qantas cousins.

While seat comfort isn’t an issue on a one hour flight it is a plus on longer flights and actually makes Jetstar a reasonable choice if you want to sleep on a ‘red eye’ from Perth.

Meals

As a low cost airline, meals and drinks are an extra charge on Jetstar and really who can be bothered on a mid-morning one hour flight?

During the Flight

An irritation with JQ is the early “turn of electronic devices” policy that sees cabin crew telling you to turn off devices the moment the plane starts its descent.

On short trips this weird policy means as little as twenty minutes time available to use a laptop or tablet, if you want to work on your flight then choosing Virgin or Qantas will give you more time to get things done.

On arrival

Baggage collection was surprisingly slow for a relatively quiet airport and Coolangatta Airport’s management save a few bucks by opening a minimum of luggage carousels which can cause crowds if two flight arrive at once.

Getting away

Coolangatta Airport is a delight for transport with plenty of taxis, including Maxi Cabs that seat half a dozen people and a regular city bus service that runs the length of the Gold Coast.

Overall Jetstar delivers what it promises, an 21st Century air flight that does its best to imitate a 20th Century bus.

If there is an alternative at a reasonable cost then go for it, otherwise accept the low prices and avoid checking baggage.

Paul travelled to the Gold Coast courtesy of Microsoft to attend their Australian TechEd event.

When disruption meets regulation

Innovation wasn’t meant to be easy, particularly when you’re against vested interests.

Taxi booking applications have been one of the big areas for smartphone developers. Around the world apps for hailing cabs have popped up following the lead of San Francisco’s Uber.

One of the opportunities for copycat developers is that in most places taxis are regulated by the local city or state government, so an app for New York will struggle in Los Angeles, Paris or Tokyo and savvy entrepreneurs can create their own Uber knock off suited to their own location.

The problem is in most places taxis are regulated as a cartel, not a public service. Sometimes that cartel is to protect drivers, sometimes the companies that run the networks and often taxi license holders.

Sydney, Australia, is a good example of the latter two. The New South Wales state government’s rules are designed to protect the interests of the greedy ‘investors’ who’ve bought taxi license plates and the networks who run the booking systems and management of the cabs.

The result is Sydney cab drivers are treated like serf in what can only described as a feudal system while customers have to put up with lost bookings, poorly kept vehicles and high taxi fares.

It’s a lousy deal all round and is a great example of where disruption can change things for the better.

The problem is the incumbents will fight innovation that threatens their cosy and profitable arrangements and the regulators are part of that comfortable alliance.

In New York it looks like the Taxi and Limousine Commissioner does have some of the consumer interests at heart, pointing out that the metered fare is what passengers have to be charged by law. In most cities though, particularly Sydney, protecting the passenger is just another smokescreen for protecting vested interests.

Something that many innovators don’t realise is the power of those vested interests.

In the case of the taxi app developers many of them are about to get a nasty taste of just how vicious incumbent and their tame regulators can be when confronted with a threat to their cosy business arrangements.

Darling Harbour and the peak of consumerism

Sydney’s old docks reflect the changing economy

Sydney’s Darling Harbour was one the centre of the nation’s mercantile economy, from across the country millions of tons of grain, wheat, sugar and other commodities were loaded onto ships and exported to the empire.

Eventually Darling Harbour fell into disuse, the docks became containerised, bulk goods moved to specifically designed loaders and the new breed of cargo ships were often too big to fit under the Sydney Harbour Bridge.

What really sealed Darling Harbour’s fate was Australia moved from being a largely export based agricultural export economy to a service based consumerist economy.

Today Darling Harbour illustrates that change, the docks have become expensive restaurants, hotels and shopping centres. The notorious “hungry mile” of docks is being converted into “Barangaroo” complex of office blocks, apartments and possibly even a casino for “high roller” Chinese gamblers.

Even the cruise liners are going. The 1980s vision of Darling Harbour as a temple to consumerism and property speculation is complete. In this way, Darling Harbour has become a picture of the Australian economy.

Just as Australia’s mercantile era peaked just before The Great Depression of the 1930s – the depression of the 1890s was actually far harder on Australia, particularly Melbourne and Victoria – the consumerist era finished with the Global Financial Crisis of 2008.

It will be interesting to see how Darling Harbour evolves over the next hundred years.

For a glimpse of the final days of the old Darling Harbour, Island Shunters an ABC documentary from 1977 showed the working lives of railway workers in the goods yards on the Western side of the docks. Today those railyards are the Australian office of Google and Fairfax’s headquarters.