
Uber leaves Kansas after lawmakers demand background checks and more insurance - prostoalex
http://pando.com/2015/05/06/not-in-kansas-anymore-uber-leaves-kansas-after-lawmakers-demand-background-checks-and-more-insurance/
======
discardorama
If my recent experience is anything, Uber needs some serious regulation.

I live in SF, and was flying out of OAK. I had used Uber only once before, a
long time ago; but this time, I suggested to the wife that we use Uber again.
We had to leave SF at 7:15AM - 7:30AM or so.

Around 7:15 I pulled up the app, and saw that there were several cars around
(as they usually are). I requested an UberX; punched in the destination. A
driver quickly accepted, and Uber said he'd be there in < 5 minutes. A couple
of minutes later, I get the notification that the driver cancelled. OK, I
tried again. Same thing again: driver accepts, and then a minute or two later,
cancels. This went on for 4-5 times. Now, time is getting tighter, and I have
a large suitcase; and cabs don't come around in my alley. I tried Uber again,
and this time Uber says: "Surge pricing in effect! Rates are 1.5X". I knew
what was going on; but I had to accept out of desperation. What do you know? A
driver quickly came over and we were on our way. The driver did say that some
drivers may not have wanted to go to OAK because traffic back would have been
bad.

But here's the thing: a licensed cab _cannot_ refuse to take you to your
destination! Uber seems to be set up to take advantage of riders with their
"surge pricing" scam.

This experience left a bitter taste in my mouth, and I made sure I installed
Lyft for the ride back.

~~~
bradleyland
Or, you know, don't use Uber.

I get that you had a bad experience, but the response to every bad experience
should not be regulation. "Surge pricing" is no more a scam than any other
market-based pricing mechanism.

To be clear, I'm mixed on Uber overall, and I do think they need some
regulation, but not with regard to pricing, coverage, or response time. Those
are good fits for self-regulating markets. I'm more concerned with things like
knowing that when I get in to an Uber, I'm covered by the proper insurance if
I end up in an accident on the way to my destination.

~~~
chimeracoder
> "Surge pricing" is no more a scam than any other market-based pricing
> mechanism.

Surge pricing on an unknown fare (metered) is actually quite ridiculous.

For contrast, when I order a Lyft line in Manhattan, it gives me an exact
price quote ( _not_ an estimate, but the exact quote) before I order the ride,
taking all surges into account. This means I have perfect knowledge of what
the price is going to be before I decide whether to take the ride[0].

Uber has consistently refused to implement price quotes, to the point where
they have literally jeopardized their existence in at least one city because
of it: all of the legal problems they have in London would be avoided if they
provided price quotes in advance.

Uber has been really clever to frame the controversy as a debate about whether
the cabbies should have to take an exam. But the fact that medallion cabs in
London have to take the street exam is all moot, because if Uber provided
price quotes in advance, they would be classified as a different kind of car
service which doesn't have to take the street exam in the first place.

Instead, Uber would rather launch a coordinated PR and legal campaign against
the entire medallion cab system in London, just to avoid implementing an
incredibly user-friendly feature.

[0] This feature may not be in all locations yet (in fact, I don't know if it
even works if the destination is in another borough), but it's clear to me
that this is at least where Lyft is headed, whereas it's clear that Uber is
committed to _not_ providing price quotes.

~~~
mirashii
> but it's clear to me that this is at least where Lyft is headed

The opposite is actually clear to me. Lyft in SF previously had the
functionality you describe Uber in Manhattan having. You put your destination
in, it gives you an exact price, you decide whether to call it. When Lyft Line
(the carpooling variant) was introduced, that feature was actually removed,
and now with a standard Lyft ride there is no way to know your fare in advance
(though there is now with Lyft Line).

In a similar vain, Uber gives a max fare on Uber Pool (so you know at most
what it will cost, guaranteed). Uber also does do fare estimates on UberX and
other rides. I've heard from a few drivers that they may have avoided giving
exact fares in advance on UberX and others because people tend to want to use
them a little bit more flexibly than get from point a to b (Stop and pick up a
friend on the way, for instance).

Point of all of this being, it's not clear to me that either company is
committed to providing or not providing price quotes. I think we're still in
the early stages of experimentation, with features being added and removed and
changed between locations all the time, and I don't think we can yet
characterize what either company is committed to doing or not.

~~~
chimeracoder
> Point of all of this being, it's not clear to me that either company is
> committed to providing or not providing price quotes.

Point taken. I'm willing to believe that Lyft may not be committed to
providing price quotes. But there's at least ambiguity there, whereas it's
very clear that Uber does _not_ want to provide exact quotes. If they did,
they would have in London and avoided the expensive, multi-year legal and PR
battle that they're engaged in there.

How much do you think this protracted battle has cost them over the years,
both explicitly (PR firms and lawyers) and implicitly (opportunity cost of
lost revenues from additional rides)? Whatever it is, it's a high number, and
Uber has decided that _not_ providing price quotes is worth even more[0].

> Uber also does do fare estimates on UberX and other rides.

An estimate is simply lead-generation for them, not a quote. They are not
committing to charge me the price they estimate. As the consumer, I still do
not know what the ride will _actually_ cost until I am already on the hook to
pay for it.

[0] It's not even a tough actuarial problem to solve at Uber's scale, which is
why it's such a glaring omission, in addition to the example from London.

------
cantankerous
Uber has been having similar regulatory fights in Kansas City, which recently
passed ordinances that Uber claimed would make it prohibitive to do business
there ([http://goo.gl/cXlhzb](http://goo.gl/cXlhzb)). Uber made claims that
"thousands of jobs" would be lost in the move, despite the fact that its
competitors (Lyft, etc.) would abide by the new rules and continue to operate.
It seems a little silly to talk about the jobs of your contractors as being
"lost" when they can walk over to your competitor and work almost seamlessly.

Uber pulling out of Kansas makes half of the KC metro area impossible to work
in. I'm curious if this will have a major impact on Uber's future in the
entire city.

~~~
iamdave
_Uber made claims that "thousands of jobs" would be lost in the move_

I've got a lot of reservations about calling Uber/Lyft a "job" in the first
place; in fact I have a lot of problems with these "sharing economy" apps-
calling them jobs when really you're just subcontracting labor on the cheap
while the business side collects massive investments and benefits for the
full-time employees.

It's like when you drive by a Dominos Pizza {substitute with the chain of your
choice} and they have signs "make $15/hr"; you'll maybe make $15/hr on an
incredibly busy day or a sudden surge in ride requests, but what's the mean?
Is $15/hr the mean? If not, you don't get to advertise "make $15/hr".

I said it once at the start of all of these talks two years ago: It's becoming
increasingly apparent to me that "disruption" in so many startups more
recently means less "disruption with the goals of bringing about much needed
substantive change to local regulation" and more like "give my company special
treatment to operate". And it's a hard pill for cities to wave off when the
population centers are all clamoring for an alternative to taxis.

okay I'm done ninja editing.

~~~
hn_user2
Especially because they argue that they are not a taxi company because they
are doing "ride sharing". Well are you ride sharing or are you a limousine
service with jobs on the line?

------
bsbechtel
To me, this seems to speak volumes about the viability of Uber's business
model in the long run. If they can't compete because additional background
checks and insurance are needed, is it really a $40B company?

~~~
athenot
Their long term goal is to rely on self-driving cars, not drivers. So
background checks for drivers and commercial insurance for drivers won't be an
issue.

~~~
r00fus
But that will only pan out if they've established an entrenched position in
the market using human drivers.

A lot can happen in 5 years - I am not expecting self-driving cars to be a
mass-market reality before then, if only due to the speed of legislation.

------
gambiting
"Kansas lawmakers want to make sure drivers have insurance that covers the
times when a driver has no passengers — and is therefore not covered by
business insurance — but is behind the wheel of their work vehicle — and is
therefore not covered by personal insurance either."

It's outrageous that there could even be a situation where someone is driving
on the road but not covered by insurance. Looking at comments under the
article, it's like people don't understand the implications of this.

------
meritt
Does anyone have details on the associated costs involved for Uber and/or the
drivers? I can't imagine background checks being very excessive for the
drivers, so maybe it's grossly expensive and miscategorized insurance?

Uber + Lyft just relaunched here in Portland. Drivers are required to have
valid business licenses and pass a background check too. Everyone is very
happy with the changes. (except our local taxi commission, of course)

~~~
prostoalex
Same in many European cities, where even UberX drivers have to have a "private
driver" license.

The requirements involve documented regular maintenance and insurance coverage
that would include passengers, not sure what's the business logic behind
opposing them.

~~~
rmc
> _not sure what 's the business logic behind opposing them_

They want to have no costs to doing business, and to reap all the profits.

~~~
prostoalex
I mean, the cost is already shifted to the drivers (who have to pay for
license, submit maintenance paperwork and buy insurance) and taxpayers (who
hire government clerks to review all that stuff).

But I get what you're saying - at that point the profit opportunity diminishes
somewhat. The upfront cost of it also discourages casual drivers who only
planned to do some weekend work.

------
kaolinite
It really is incredible how the opinion of Uber has dropped. I used to love
Uber - and still do love the Uber service - but now I can't stand the company.
I used to buy in to the whole corrupt taxi industry narrative, but now I feel
like a fool for believing it (even if it was true at the beginning). It's a
shame that there's no alternative, at least that I'm aware of, to
UberEXEC/UberLUX.

I feel like Uber could have been a great, albeit smaller, company had they
concentrated on their upmarket service. Aiming to be cheaper than taxis is
just a race to the bottom - but there are many people who are willing to pay
more in exchange for a better experience.

~~~
taco_emoji
Honestly I think 99% of the reason people use Uber and Lyft are the phone
apps. If "real" cab companies had an app, I seriously doubt Uber and Lyft
would've made such headway. (At least in most cities - I realize there's
occasionally specific, localized issues with existing "real" cab companies.)

~~~
greiskul
Yes, in Brazil we have phone apps for calling regular taxis, and at least in
the big cities, it's great. You end up with all the regulation that regular
taxis have, plus the apps normally have a rating system, so drivers end up
caring much more about the quality of the ride.

Uber is having an extra hard time to compete here.

------
mahouse
How despotic! Lawmakers demanding background checks and insurance from taxi
drivers! This is outrageous. Where is muh freedom? I want to be able to hire a
taxi with a rapist driver!
[http://www.houstonchronicle.com/news/transportation/article/...](http://www.houstonchronicle.com/news/transportation/article/Uber-
driver-accused-of-rape-not-permitted-by-city-6182503.php)

~~~
Dylan16807
Background checks aren't demanded for a thousand other jobs. An evil person
could be hiding almost anywhere. What makes cabs special?

~~~
vtlynch
They are often required for jobs that may directly put other people in danger.
If you are getting into the backseat of a Uber you don't want the driver to be
someone who has had DUIs or a history of dangerous driving.

Hairdressers and other similar jobs are indeed regulated in this way - you
dont want your ear getting cut off do you?

~~~
smokeyj
But the undocumented workers who handle your food, fix your car brakes, built
your house and construct the fairground rides get a free pass. I don't
understand the mental gymnastics required to support regulating ride sharing
_before_ all these other markets. For every bad story about a bad uber
experience are 100's of lives spared from people not driving drunk. It's just
mind boggling to me. Only blind ideology can make people this stupid. It's
like they're afraid of a market solution being orders of magnitudes more
efficient than the medallion system. And then we end up with lines like "you
dont want your ear getting cut off do you?".

~~~
vtlynch
Only blind ideology could produce this mess of a comment.

~~~
smokeyj
It's called _principled reasoning_. Radical stuff man, give it a try. You hold
no principle to be true that dictates voluntary and peaceful cooperation
should be prevented with threats of violence in order to achieve _safety_.

The only reason this conversation is being had instead of the conversation
about background checks on your mechanic is because one sector is unionized.
If you don't understand that you don't understand the politics of the
situation. Great rebuttal though - shows what we're up against.

------
Meiscooldude
I can't really say anything about this situation. But I can definitely attest
to my current relationship with Uber, and my previous relationship with
Kansas.

I grew up in Kansas. Many times, the government attempted to teach me
Intelligent Design and I was always given the option of opting out of being
taught Evolution.

Sodomy is still illegal for any non-strait married couple. While not enforced,
it is still a Class C Misdemeanor. Just the to let everyone know the
governments feelings on homosexual couples.

Only 17 counties are allowed to have liquor stores, and there are 28 counties
that are completely dry. (Dry counties have on average more drunk driving
crashes compared to wet due to people driving further for a drink)

Thanks to the DARE program there, I grew up thinking Marijuana was more
dangerous and addictive than Meth or Cocaine. (Meth is a much bigger problem
in Kansas)

The legal system there is very much Guilty till proven innocent, they bully
people into signing plea bargains.

I can attest... Kansas is backwards. So, I left too.. to Colorado.

Uber on the other hand, has been nothing but a blessing. Its fantastic. My
girlfriend and I love it. Its cheaper than a cab here in Denver. Cheaper than
driving (due to parking costs). My girlfriend and I have always felt safe.

If you disagree with Uber. Go live in Kansas for 22 years and tell me the
state isn't backwards.

------
sagarm
The point of contention here seems to be insurance: Uber already provides
insurance that covers the driver while they are carrying passengers, but
Kansas wants them to have commercial insurance that covers drivers 24/7.

------
cozzyd
Business models that rely on skirting regulations affecting competitors are
probably not sustainable.

------
Dirlewanger
As if one need any more evidence as to what a shit-pile of a company this is.
But the majority of this site's audience doesn't care. They don't need a car
anymore! They're disrupting things and have a slick app!!!!

------
moey
I've got mixed feelings.

At one end, I think it's perfectly reasonable for the state to require more
insurance coverage for Uber drivers since there will be more risk involved
than a regular driver.

Background checks required by state? That's Uber's job to decide, and they do
it anyway. If Uber doesn't do background checks, and there are incidents (even
a small number) it will hurt their business at the end of the day. It's in
their best interest to do the background checks in the manner they please.

This is a weird situation where Uber doesn't want to "employ" it drivers and
pay for w/e is needed for them to do business, but at the same time their
drivers require them to provide them with everything to do their job and now
their source of income (employer) left the state and them jobless.

I wish we were provided with more details like how much this background
check/insurance would cost. They already do both (Uber does a background &
provides commercial insurance coverage) so honestly this half-written articles
do nothing but make people even MORE confused on how Uber REALLY does
business.

~~~
edent
> If Uber doesn't do background checks, and there are incidents (even a small
> number) it will hurt their business at the end of the day.

I really hate this mode of thinking. What's wrong with _preventing_ incidents?

A background check isn't going to weed out 100% of muggers, rapists, or Enron
Executives - but it will likely reduce the number of muggings, rapings, and
fraud.

Your argument is basically "There's no need to inspect restaurants - if people
die of food poisoning, the business will suffer."

Well, yeah - but how about we take some simple precautions to stop people
getting hurt?

~~~
Dylan16807
>What's wrong with preventing incidents?

Privacy issues and companies making hiring decisions on non-work-relevant
personal life choices.

Do you support background checks for all jobs? Nothing you said is specific to
Uber. But there's a reason companies can't ask if you have children, etc.

~~~
amyjess
> Do you support background checks for all jobs?

Yes. Yes, I do.

I'm female, and on top of that, I'm part of a group that is exceptionally
vulnerable to hate crimes. I'm glad I work at an company where I don't have to
worry about a co-worker being a known rapist.

~~~
Dylan16807
All right. Well I wish you the best, but be careful. If someone has served
their time in prison then that should be the end of the punishment. Common
sense restrictions are fine, but they should be eligible for most jobs. It's
utterly cruel to pretend someone's punishment is over, then throw them onto
the streets with no assistance and near-zero chance of having a life again. By
all means keep people locked up if a crime is truly bad enough, but if they've
served their time then they've served their time.

~~~
norea-armozel
You're conflating the background check with extra-legal justice. They're not
the same. The issue of re-introduction of convicts who have served their
sentences is a problem of the State as the State is one who does the
punishing.

~~~
Dylan16807
If you refuse to hire someone based on past crimes, that's extra-legal
justice. When it becomes widespread enough, the State has two choices: stop
said discrimination, or be complicit in it.

~~~
amyjess
So are you saying that I should be required to be friends with rapists?

Because refusing to be friends with a rapist is also "extra-legal justice"
according to your logic.

~~~
Dylan16807
You can't refuse to hire someone for race, or family status. It would be
reasonable if you couldn't refuse to hire someone for a crime they have
already completed a sentence for (unless it's relevant to the job). There
already exist some state laws of this sort, especially for crimes that have
been expunged.

Friendship is unrelated, and you wouldn't even know if they were a felon.

And non-felons are capable of horrible crimes too. They weren't born felons.

------
Dylan16807
Well that's obnoxious that the insurance companies would play hot potato and
not cover the 5 minute pickup windows.

But how much is insurance for that period going to cost? Is Uber even going to
notice the difference?

Or is the problem that a 'work vehicle' is going to have no insurance the
entire time it's being driven around? Even when it's not actually being used
for Uber? Now _that_ sounds unfair to make Uber pay for.

~~~
prostoalex
There's a difference between a 5 min leisure drive and a rush to a hot spot or
surge location (such as a sports game that's about to end) to pick up a
passenger, because of the driver incentives. Insurance companies are very
aware of this, and this causes the price premium between personal and
commercial insurance.

As somebody above pointed out, such accident already happened
[http://m.sfgate.com/news/article/Family-of-SF-girl-killed-
by...](http://m.sfgate.com/news/article/Family-of-SF-girl-killed-by-Uber-
driver-backs-5579980.php) although I don't know if it carries any statistical
significance when you count _all_ the Uber rides in SF.

~~~
Dylan16807
If you're rushing to pick up a passenger you have insurance from Uber. (I
looked that up to make sure after making the above comment.)

Rushing to a hot spot seems like a flawed argument, you can do that while
totally off the grid. App closed, phone off. That's probably going to get you
more money, too.

You could have four of these apps open at once, do you need quadruple
insurance?

The app requires no interaction, and you perform no actions for the app until
it notifies you about a pickup and Uber's insurance kicks in.

~~~
prostoalex
If the purpose of rushing is to engage in commercial activity, I could see how
insurance companies would claim that it constitutes commercial activity by
itself. It just seems like a higher risk profile.

> Rushing to a hot spot seems like a flawed argument, you can do that while
> totally off the grid.

Maybe my original example was misleading, but Uber app points an idle driver
towards the areas of increased demand (and surge pricing) by color-coding them
[http://disinfo.s3.amazonaws.com/wp-
content/uploads/2014/12/s...](http://disinfo.s3.amazonaws.com/wp-
content/uploads/2014/12/surge_pricing_lead.jpg)

> App closed, phone off.

This part I agree with, if the driver has arrived at a pick up point due to
inside knowledge of relevant details, and was not guided there by the app,
it's a personal ride.

I think any time the app is open, though, you can make a reasonable argument
that the driver is guided where to go. However, in the US it only matters what
the judge/jury says if/when such case hits the court.

------
protomyth
"Kansas lawmakers want to make sure drivers have insurance that covers the
times when a driver has no passengers — and is therefore not covered by
business insurance — but is behind the wheel of their work vehicle — and is
therefore not covered by personal insurance either."

How is this a bad thing?

So, in other states, drivers are not covered when they are driving to make a
pickup?

~~~
gnopgnip
In San Francisco an uber driver killed a woman while in between rides and
ubers insurance is refusing to pay out.
[http://m.sfgate.com/news/article/Family-of-SF-girl-killed-
by...](http://m.sfgate.com/news/article/Family-of-SF-girl-killed-by-Uber-
driver-backs-5579980.php)

------
jroseattle
It seems that government may have found a lever against a well-funded global
operation that wants to do business in their jurisdiction.

Get ready for _updated_ regulations in many areas where Uber is doing business
now.

------
GFK_of_xmaspast
Good riddance.

------
stegosaurus
All of this nonsense about insurance and checks and blah makes me weep for
humanity. If I can hitch hike legally, why can't I pay for the same service?

Basically it seems to me that regulation has the effect of forcing lifestyles
upon people. You can't just sell people things, you have to be a Thing Seller
and devote yourself to that regulatory environment and then you can sell some
of the people some of the things.

Bonkers.

~~~
probably_wrong
Precisely, because you don't pay the guy that gives you a lift when you
hitchhike, but you do pay to an Uber driver.

Once there's money involved, we are no longer talking about an agreement
between gentlemen, but about a commercial transaction, and those require
regulations because the incentives are different, and money does weird things
to people. A driver maximizing profits has no incentive in, say, checking his
brakes regularly (money spent + car immobilized for some time), while a random
driver does ("yeah, I'll take a cab for a couple days, no biggie").

~~~
SilasX
Your general point is sound, about the profit motive leading to riskier
behavior, but the application to that specific case is questionable. Drivers
have the right incentives on brake checks, regardless of profit, by virtue if
the fact that they're in the car and would lose control!

It would be more correct to say that the incentive problem here lies in
uncompensated danger to other drivers, which for-profit drivers may be willing
to ignore when tempted by money.

