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Uber escalates the war on taxis in New York City

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Like most unionized workers, any competition or opposition to their job or field if trade is usually met with swift and populist reprisal. And for the 45000 unionized cab drivers in New York City, their war against a new company dedicated to providing transportation at lower costs escalated on July 7 when Uber announced they were going to lower service fees to customers, and undercut the standard fares normally charged by the city's cabbies.

Most cab drivers are independent contractors, or work for large 'barns' that hold limited numbers of municipal licenses that are the heart of the cab industry. Known as Medallions, these licenses are as costly and as limited as liquor licences are for dining operations, and can mean the difference of thousands of dollars in regards to insurance and revenues each year.

In New York City, where roadways are often crowded and parking is non-existent, the use of alternate transportation such as taxi's, limo's, and hired cars are a vast industry totaling billions of dollars per year. This alone makes the annual auctions for Medallions highly lucrative, and expected to reach just under $1 million in 2014 for a single license.

It is from this golden rainbow of potential income that a company called Uber has sought to break into, and is fighting hard to grab a lion's share of the personal transportation industry. Uber is a business model where people can download an application and call for everyday drivers to pick them up, and carry them away to most destinations within their city locales. Additionally, the Uber model is almost like a network marketing company where anyone with a car, license, and good driving record can apply to be a driver, and make good money without having to go through the bureaucracy of Medallions and unions.

Last month, thousands of taxi drivers in Europe went on strike in opposition to Uber, and their business model, and it signifies just how much Uber is growing in a once tightly controlled industry. And with their business going public in 2014, and a massive war chest of capital to pull from, Uber is turning up the heat on the traditional model of hired transportation with a new program set to lower costs by 20%, and put their services well below the average fares of New York City cabbies.

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