Uber in Small Towns: the Good, the Bad, and the…Inevitable?

rural town

Taxi drivers have been scrambling over the past six years to quickly adapt and keep up with Uber. Car services in cities across the U.S.—even those with sponsored taxi fleets like New York—have been completely transformed. Uber, as we might’ve expected, never planned to stop at cities, and this summer, they began rolling out service in small towns across the U.S.—places still staunchly mom-and-pop, with local (and not especially modern) taxi companies. Uber’s impact on these rural towns has only just begun, but we can expect to see some fairly major shaking-up of the old guard.

Recruiting Locals

At the beginning of September, The New York Times detailed Uber’s move into quaint, quiet, traditional (in the sense that nothing much seems to change, and that’s how everyone likes it) towns and classic vacation spots in the North East. Uber’s business model, of course, is one of pairing drivers with riders, and with such a strategy they must build up fleets of drivers who are located in the places they’re infiltrating. Uber’s move into more rural areas therefore cannot be compared with, say, the big box store take-over that has happened in these same places over the past couple of decades. Instead, Uber gains local converts (with good pay and true flexibility) in the form of drivers who, already part of the community, help the company join the local fabric—that’s the idea, anyway. The downside, of course, is that new Uber drivers create sudden (and difficult to compete with) competition for local taxi services. Competition and changes that can be hard for locals to stomach.

Adapt or Go Extinct

The “adapt or die” philosophy is built into the very foundation of capitalism, and the theory goes that the more companies competing for customers, the better prices will be for consumers.

Can Uber's business model coexist with small town charm or are they mutually exclusive?

On the face, it should work: Uber moves into a small town, forces local taxi and car services to match their prices, customer service, and technological advances, and the consumer wins (Uber, incidentally, has also been shown to win with this scenario). And while we’re not here to argue the morality of the free market, there are some obvious downsides to giant corporations in general (which Uber is becoming). When local business are pushed out, large corporations are then free to hike prices, without fear of competition–we hope Uber won’t become like the Walmarts of the world, because maintaining a variety of options (here, in the form of more than one ride-hailing business) is, in our opinion, crucial.

Rideshare expert (and Uber driver) Harry Campbell—The Rideshare Guy—gave us his take. He told Quoted, “There’s obviously been some pushback from taxi drivers but if anything, it’s forced them to adapt or go extinct. We are now seeing more and more taxi companies update their fleets, push for the ability to flex their rates and even come up with apps of their own to compete with Uber and Lyft. And at the end of the day, the more competition, the better for everyone.”

cape cod dock

Local Resistance

In their story about Uber’s move into classic New England vacation spots (like Martha’s Vineyard, Cape Cod, and Nantucket), The New York Times reported, “a barrage of resistance from the family-run taxi companies that have long dominated the [areas]. “It will be the slow death of us,” Jim Hickey, a co-owner of Bluefish Taxi, told the Vineyard Gazette.”

Some fear that Uber will take out the competition only to raise prices further down the line.

Taxi drivers aren’t the only ones displeased with Uber’s ubiquity—many local residents and vacationers would prefer their favorite spots remain unsullied by giant corporations. The New York Times quoted a Martha’s Vineyard vacationer, unhappy with Uber’s onslaught: “‘McDonald’s, Uber, stay away,’ he said. ‘You come out here for an escape…Uber is just another thing mainstreaming the island.’”

We asked Campbell if he believes Uber has a responsibility to the communities it moves into. Campbell told us, “I think Uber as a service is good for society as a whole since it’s been shown to lower DUI rates, provide transportation options and more, but I do think they need to do more when it comes to servicing their drivers. Uber treats drivers like disposable commodities at times, and although Uber touts its job creation prowess, it’s also clear that they are heavily investing in driverless cars.”

Will Uber in Small Towns Work, and is their Take-Over Truly Inevitable?

Though Uber is pulling out all the stops—enticing local drivers, offering discounts, and placing strategic ads—their move into small-town America hasn’t been seamless. The Times reported, “Uber’s on-demand model doesn’t quite seem to be working — at least not as well as it does in urban areas. Islanders’ resistance to change is one reason. Uber’s resistance to small towns’ strict regulations is another. But ultimately it is the lack of reliable, round-the-clock drivers that has been the real obstacle.” Part of the reason for the lack of drivers may be the current lack of customers—without reliable, regular fares, it just isn’t worth a driver’s time.

Harry Campbell told Quoted, “Uber has revolutionized the way people get around in big cities but it’s more of a complimentary service in smaller towns and rural areas. Since there aren’t as many options to get around in smaller cities, I’ve seen that Uber passengers just aren’t as reliant on Uber as they are in bigger cities.”

Our take? Perhaps Uber just hasn’t yet found their angle in small towns. Based on their track record, we bet they aren’t even close to discouraged.

  • In Sun Valley Idaho, the Uber concept is being tested by Sun Valley Drivers who offer high end luxury vehicles.

    Idaho Town Car (an Idaho TNC) offers drivers who operate their own luxury vehicles the opportunity participate in a ride share program according to Idaho State regulations passed in 2015.

    The Sun Valley concept does not interfere with local taxi services because the TNC charges are much higher than local taxi rates.

    Transportation Network Company drivers do not collect fares from the passenger. Drivers can accept gratuities. Passengers provide payment for the fare directly to the TNC company who then connect the passenger with the driver via the online app.

    A TNC driver can’t be hailed on the street and can only be arranged through the TNC. The vehicles are not owned by the TNC. All TNC drivers own or are authorized to use the cars they drive.

  • Ted Hutch

    Both Uber and Lyft are for profit business. Low population areas are low money gain, and inherently deny these areas services.