
Lyft, SideCar, and Uber all slapped with $20K fines from CA regulator - co_pl_te
http://arstechnica.com/tech-policy/2012/11/lyft-sidecar-and-uber-all-slapped-with-20k-fines-from-ca-regulator/
======
ajays
The deck is stacked against Uber, Lyft and Sidecar. You have to realize that
the taxi industry is a government-cab collaboration, with the customer getting
fleeced. It is not as simple as "government grants license to cab operator,
cab operator runs his cab and makes money". No. The government takes a cut
from the daily action too. Use a credit card in the cab? The government takes
a cut. Want to rent your medallion to someone else? The government takes a
cut.

Right now, the financial impact of these outfits is minimal. But when they
seriously start impacting government revenues, expect the lawmakers to come
out swinging. They'll tag-team with the taxi union(s) and make life hell for
the Sidecars, Ubers and Lyfts of the world.

~~~
stevewilhelm
So cities, counties, and states are supposed to build and maintain roads, keep
them safe, and allow businesses like Uber that use these roads and services to
do so without paying for them? How is that sustainable?

~~~
Zak
Uber's drivers pay tax on the fuel they use and there's sales tax on the
transaction itself. They are, in fact paying for the use of the roads. Why
should there be a special additional tax on that particular type of business?

~~~
glomph
Because everyone else in the business is still paying a special additional
tax? If you disagree with that, you have to fight to change it for everyone.
You don't just start competing without paying the same taxes as everyone else.

~~~
Zak
At first, that sounds more fair, but in practice it means a lot fewer people
would start doing useful things.

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smsm42
It just reeks of special interests protecting their turf. Of course when you
are operating in highly regulated environment and have a well-oiled
connections with local politicians it is annoying when somebody new comes
around and tries to take part of your customer share. However for me as a
consumer it is annoying that government yet again tries to take away my choice
under the guise of protecting me from imaginary threats - and instead ends up
protecting me from better service and lower prices. I don't need this kind of
protection.

~~~
polemic
Oh please. Regulation doesn't exist in a vacuum, and acting as if you're
exempt from the law in the noble pursuit of lower prices is bollocks.

~~~
PKop
So please specify how, in _this_ case, what is beneficial about the regulation
of the taxi industry for consumers who want choices and lower prices?

~~~
polemic
You're avoiding the issue by framing the question in specific terms.

Please specify how, in _this_ case, what is beneficial about the illegal
operation of a taxi company for consumers (and taxi drivers) concerned about
safety?

See what I did there?

I'm, not going to dig through the history of taxi regulation in the SF bay
area to defend a point that is already made in law. Rape on women by
unlicensed taxi operators has led to calls for mandatory police checks in the
UK. Attacks on drivers in NZ led to the introduction of cameras in all taxis.
So, forgive me thinking that ignoring the law as a basis for undercutting the
competition is a shitty way to run a business.

~~~
PKop
I'm not sure I see how money could be made in the taxi, or any, industry where
a business kills and rapes it's customers.

Benefits: more choice and competition in the marketplace, lower prices.

See: <http://www.econ.armstrong.edu/toma/Taxis.pdf>

There are already laws against violations of safety of passengers. If you
really wanted to ensure passenger safety allow for concealed carry laws in the
city, you'd have no issue with drivers harming passengers, or vice versa.

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eridius
The lawsuit against Uber seems to me like nothing more than taxi drivers upset
that their monopoly is being threatened. As the article said, all the Uber
drivers are already licensed, and there's no explanation as to why Uber is
"unfair".

~~~
eli
Uber claims their drivers already meet the requirements, but if Uber doesn't
register with CPUC how can they know if it's true? Are they supposed to take
Uber's word for it?

~~~
eridius
I don't know anything about CPUC so I can't really answer that question, but
the lawsuit isn't about the licensing. The lawsuit is about Uber being
"unfair", with no explanation for what that means. The only hint is that taxi
drivers are seeing lower incomes, and the implication is that the lower
incomes must somehow mean that Uber is being "unfair" rather than simply being
a consequence of competition.

~~~
sk5t
Unqualified statements of "X is unfair" are quite popular with unions in the
northeast, to protest the hiring of any non-union labor. I guess one can't
accuse them of libel or slander for accusations of "unfairness."

~~~
tedunangst
Oversimplified summaries of 'Y said "X is unfair"' are quite popular on the
Internet. :)

~~~
sk5t
To clarify: trade unions hoist signs and distribute leaflets that literally
say "[so-and-so] IS UNFAIR." It's the phrase "is unfair" to which I'm reacting
--it's not a summary or simplification of anything else.

------
eli
I'm a customer not a lawyer, but Uber certainly feels like a "provider" to me.
It's not like they are just a referral service. They dispatch a driver of
their choice, they process the payment, and they pay the driver.

And while I think Uber is an awesome service, it's not totally unreasonable
for the state to insist that if you are acting as a taxi, you need to have
proof of insurance beyond what's required for a normal driver.

~~~
dinedal
The problem is that the cars Uber has are already insured as limos. Just by
the parent company that they are getting them from, not by Uber itself.

~~~
eli
If the drivers already have the required paperwork and insurance then why
doesn't Uber just register as a taxi provider and submit it as CPUC requested?
Is that really so onerous (honest question)?

~~~
viscanti
What does the licensing accomplish? Are drivers double drug tested? Are they
double insured? They're using all licensed drivers, which means any arguments
of "unfairness" are baseless. They aren't benefiting from lower labor costs
because they're using unregulated drivers who might be able to compete at
lower costs.

I don't think it's a degree of how onerous the requirement is. It's more a
matter of what does it accomplish? There's not a precedent for double covering
in the industry, and Uber certainly isn't gaining a competitive advantage
because of it. It seems strange that they're lumped in with the other two
services who clearly use unlicensed drivers.

~~~
eli
The licensing _proves_ to the agency that the drivers are drug tested and
insured instead of simply taking Uber's word for it. I think it is
unreasonable to expect that regulatory paperwork doesn't apply to you just
because you're probably in compliance anyway.

~~~
viscanti
This doesn't seem to be an issue of regulatory paperwork though. What does
double licensing accomplish and what does it actually mean? I'm all for fines
if they're found using unlicensed drivers. I guess I don't know that it's
necessary to double drug test the drivers though. I don't think the issue here
is filling out a permit, I think it's a matter of "what does that mean". If
asked, they should probably be required to show that all their drivers are
properly licensed. If their drivers are all properly licensed, I don't see
what requiring Uber to be licensed accomplishes.

It's not a question of "probably in compliance". If Uber is using unlicensed
drivers (which I haven't heard any evidence of), they should be fined. If they
are using 100% properly licensed drivers, I think this is a non-story.

------
dreamdu5t
Another example of government regulation keeping us safe from evil taxi
drivers.

Thank God regulations like this exist to make sure that everybody pays their
protection money.

Anyone who disagrees clearly hates poor people and taxi drivers... or
something.

------
tvladeck
I really like Lyft. I use it when I need a taxi and it works very well.

Although I do agree that a world where these types of "collaborative
consumption" services (like AirBNB) are essentially unregulated (or at least
more open to competition) is much better, it is true that a number of
industries are regulated, and incumbents that have been "playing by the rules"
were promised a protected business environment. And it's not like they didn't
have to give anything up in that trade - a taxi medallion in NYC is worth a
lot of money - they have been exchanged for over a million dollars.

So the question is: how do we transition to the better world without being
unfair to the "stranded capital"?

~~~
smsm42
We managed to transition from horsepower to cars without economy breaking down
and I'm sure some people investing in horses lost some money on that. If some
people investing in taxi business being shielded from competition will lose
some money - sucks for them, but definite benefit for everybody else. And also
would teach people not to invest in schemes that rely on government coercion
and anti-competitiveness. It'd be no more "unfair" to them than their rent-
extraction based on excluding competition is unfair to consumers.

~~~
tvladeck
I'm not sure I was clear. In the cases I'm discussing, society has made an
explicit deal with a group of providers within an industry. Essentially that
deal is: purchase a license, run your business this way, charge these prices,
etc., and we'll protect your market.

NB this does not apply in equal degrees across all industries, and your horses
-> cars example doesn't qualify.

In addition, note that I was agreeing with you that the transition, on the
whole, is definitely desirable. I'm only arguing that there may be moral
consequences in not upholding society's end of the trade I describe above.

~~~
Zak
_society has made an explicit deal with a group of providers within an
industry_

Government is often a poor proxy for society. I suspect most people in any
given US city would not like to artificially limit the supply of taxi drivers
and were not consulted about the decision to do so.

~~~
tvladeck
Well, that's representative democracy for ya. I'm not sure what to say except
that I agree with you on the facts, but probably not on their ramifications.

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usaar333
Interesting how Uber is lumped in with Lyft and SideCar. Uber drivers at least
have (towncar) licenses. I haven't figured out yet how Lyft/SideCar are
anything more than illegal taxi services that rename "fare" "donation".

~~~
cj
Uber also runs Uberx, a cheaper non-towncar version of Uber similar to Lyft.
Does anyone know if uberx drivers also have towncar licenses?

~~~
brianr
UberX cars still have towncar licenses though, judging by the TCP stickers on
their bumpers.

------
colevscode
The few uber drivers I've talked to love the service. One driver told me that,
with uber, he can often find a nearby fare in minutes. He said that the
combination of flags, the dispatcher, and über means the meter is always
running.

It's pretty clear to me that the folks that are suffering from über are the
taxi dispatch companies. These companies lease out the cars for a daily fee,
like 150 bucks per day. The driver can do whatever he wants as long as he pays
that daily fee. The cab company pays insurance because they own the cabs. Cab
drivers are essentially independent contractors. They start making money after
they've covered the cab cost for the day.

So why should the cab companies care if a driver is using über? From what I've
heard, when a dispatcher has a good order, like for a trip across town on a
slow day, they'll ask for a cut. In other words the cab companies are
supplementing their taxi rental service with a cut of the fares they dispatch.
And as a cab driver, if you want to get good orders you have to stay on the
dispatchers good side.

Über changes the balance of power. As more people use über, the drivers have
to rely on the dispatchers less, and the tit-for-tat system is deflated. I
think this class action suit is an attempt to retain the status quo by cab
companies. Über shouldn't be responsible for insurance until they start owning
their own cabs. If the cab companies have their way, both the drivers and
passengers will suffer.

------
jasonhancock
In practice these behave exactly like a taxi service. I don't think it matters
much who owns the cars. No one would argue that a cab company from, say, LA,
should be able to just bring a portion of its fleet to SF and start picking up
passengers without complying with the laws that govern taxis here. If these
start-ups affect the market in essentially the same way, we and they all know
they are trying to enter a market with rules in a way that does not abide by
them

~~~
penrod
I'll take the bait: Yes an external cab company should be able to come into SF
and compete with the local firms. The SF regulations have expressly been
rigged to support a local cartel and are morally illegitimate.

~~~
jasonhancock
You may think that an external cab company (or Lyft) _should_ be able to come
into SF and complete with local firms but you also apparently agree it is
illegal. I personally consider it equally morally illegitimate for individual
actors in a society governed by the rule of law to decide which laws and
regulations "work" for them and which ones don't, then to disregard those they
don't like. And in practical terms I think it is irresponsible for a group of
people with one goal -to make money- to set up a company which they know is
breaking the law, and to convince a lot of people to join them in breaking the
law (their drivers) and creating ridiculous contortions that allow them to
pretend not to be governed by the rules ("the donation thing" e.g.) when
everyone knows they are a taxi service, plain and simple.

------
ALee
If I were them, they should just get users to use real names and addresses to
send e-mail, faxes, and paper mail to the offices of the public utilities
commission and to other officials who will pressure them.

Fundamentally, these guys just need to increase social capital with regulators
and invest in legal infrastructure. The government is just like another giant
company with dependencies and old architecture. Trust me, it's just like
investing in weird ERP integration to get access to all of those clients. It's
not something that is necessary to the evolution of your product, but it's
something you just have to do because the market is just shaped that way.

Also, any press is good press, and once these three get large enough, it'll be
widely unpopular to not support them.

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crazy1van
This is outrageous that the taxi companies are just lobbying for laws that
protect their business at the expense of other businesses!

Ok, now please pass a law saying internet providers can't limit how much data
I can send each month nor prioritize one type of traffic over another. After
all, that is hurting internet businesses!

~~~
1123581321
Traffic prioritization is an important issue that does hurt businesses and
users to the benefit of telecoms and ISPs. It is better known as the "net
neutrality" issue. <https://www.eff.org/issues/net-neutrality>

To your larger point, the disgusting part is the behavior of the regulators,
who should not succumb to the lobbyists and campaign donations of the livery
industry. However, it's also absolutely wrong to attempt to influence
government for personal gain. We all have a moral duty to do what's good for
everyone including ourselves. Taxi unions need to recognize that protecting
incompetent systems to enrich their members at the expense of everyone else,
by using government as a weapon, harms every user of public transportation and
several businesses and in the long run sets the drivers up for an unnecessary
catastrophic collapse of the taxi system when it becomes completely unbearable
by the public.

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pfortuny
This was clearly going to happen. News at eleven. Not that I agree with the
fine, but it was really deemed to happen.

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dean783
Lets help them out Tell the PUC to support ride sharing services Sign the
Petition:

[https://www.change.org/petitions/tell-the-puc-to-support-
rid...](https://www.change.org/petitions/tell-the-puc-to-support-ride-sharing-
services)

