Part of the aura of “driving in luxury” includes not worrying about paying at the end of the ride. Uber Technologies Inc. banks on that.
The San Francisco-based transportation-services provider stresses mobile scheduling and prepayment as a key aspect of its private luxury car and taxi ride services.
As part of a rapid expansion late in 2011, Uber began providing its luxury car service in Chicago. The company announced its intention April 18 to also offer taxi service in the city on a test run, using the same mobile-payment setup that customers have become used to when scheduling rides in Lincoln Town Cars.
Executives from Uber did not respond to PaymentsSource requests for comment.
Customers may download the Uber dispatch-service software from the Apple Inc. App Store for use on an iPhone or iPad, or from the Google Inc. Android Marketplace for Android devices to establish a Uber account and password for scheduling luxury car or taxi service, according to the Uber website.
When scheduling a pickup, the Uber accountholder uses the application’s map of the area served by Uber cars to position a red pin on the pickup location. He then presses a green “set pickup location” button. After confirming the proper location has been set, the consumer presses a “request pickup here” button.
Uber stores the credit card information provided when registering on file, so the customer never has to go through the payment process at the end of a ride. Payments include tips and tolls, the website states.
The software offers a “cancel” button in case the consumer has to cancel a pickup.
Uber charges an $8 base fare, plus $4.90 per mile and $1.25 per minute for the luxury car rides, but it will charge only what the driver shows on the meter for taxi rides. In addition, Uber charges only one account per ride, even if a pickup is scheduled for three or four riders, the website notes.
Chicago-based Braintree Inc. provides the security and payment processing for Uber transactions.
Braintree encrypts customer credit card and personal data stored in the Uber database and provides firewalls and other secure socket layers mechanisms, the website states.
Yet Uber faces the same challenge as other taxi firms incorporating mobile payments regarding consumer perception of security, Maria Arminio, president of Avenue B Consulting Inc., a Redondo Beach, Calif.-based payments management consulting firm, tells PaymentsSource.
Square Inc. has spearheaded much of what has occurred regarding mobile payments in taxis with its service in New York, Arminio suggests (see story).
But the rider’s experience of swiping a mag-stripe card through the Square reader on the driver’s iPad does not equate to a high comfort level about card data being secure, she adds.
“Uber seems to have a more secure part of the equation in place because anything in which you register and prepay ahead of time is likely more secure,” Arminio says.
Still, consumers are generally leery about providing card data to third parties, other than their banks, financial advisors or insurance companies, she contends.
“I think taxicab companies are probably pretty far down the food chain in terms of consumers being willing to share [private data],” Arminio notes.
For the generally smaller transaction amount of a cab ride, Uber likely provides a secure service, but the company has to realize consumers think about the broader implications of having card or personal data stolen, she adds.
However, Uber has received support from credible financial backers.
Funding from investors such as Goldman Sachs Group Inc. and Bezos Expeditions, which handles Amazon.com owner Jeff Bezos’ venture capital investments, late last year fueled Uber’s expansion to Chicago, Los Angeles and Paris.
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