

City of Portland sues Uber - kevingadd
http://www.wweek.com/portland/blog-32557-the_city_of_portland_sues_uber.html

======
jrockway
I liked Uber back when (in NYC anyway) all the drivers were regular black car
drivers, and they all had the appropriate city credentials. Uber was only
"violating" the rule that black cars couldn't be reserved less than 45 minutes
in advance, which didn't seem like an important rule in Brooklyn (since the
yellow cabs never venture out here except under extreme duress). Uber provided
an easy way to call a car and pay for it; which was more than enough to get me
to use the service.

But now it's different, and it's just random people with random cars and an
app. I haven't had any problems, but I wonder if they're pushing things too
far. Every time I take a ride, I feel bad for how little the driver's getting
paid.

(Now that we have the green cabs out here, I usually use those. You can get
one from the Uber app, but have to pay the driver normally, which is
confusing.)

~~~
AndrewKemendo
_Every time I take a ride, I feel bad for how little the driver 's getting
paid._

Not to sound glib, but if that is the case why not tip the driver to the level
you feel is appropriate?

~~~
jrockway
Honestly, because I never have cash when I need it.

The other problem comes down to social skills. The driver is not supposed to
accept tips, so you have to do some bargaining to give them money. Then you
wonder: is it worth getting the driver in trouble for this small amount of
money? Is this tip an insult? Should I give more? Is it too much? Am I making
a scene? It's all a little overwhelming for me.

I do much better when the tip is a line item on a credit card receipt.

------
DigitalSea
Seems that $40 billion evaluation has provoked some cities into taking action
against Uber. The recent valuation after a hefty raising amount proved that
Uber was no longer this small San Francisco startup any more, they are bigger
in many cities than some taxi companies and now cities want their cut.

While I personally do not use Uber, we need services like Uber to be allowed
to operate. My recent experience going from the airport to downtown Los
Angeles was absolute hell, the taxi driver tried forcing me to pay cash even
though the card terminal was working. He wanted to drive me to an ATM to get
cash out. This is the kind of thing I am tired of. Don't get me started on the
last weekend I was in Vegas, the taxi services are just as bad there (and
unreliable).

I don't get the whole safety argument either, I have always felt safe in an
Uber and Lyft, I have felt unsafe too many times when I have taken a regular
taxi, when they're not deliberately taking you a longer way to extort cash or
trying to get you to pay cash when you only have a credit card.

I know we need regulation and fair enough, Uber are violating some local laws
here, but driving services like Uber out of the city won't make things better.
Local councils should be working with services like Uber, so they can coexist
and operate legally. Lets get some solid legislation and requirements for
ridesharing services, otherwise, they will just continue to operate regardless
(as they have shown).

This feels like a cash grab from the city of Portland. No doubt other cities
are going to follow suit as well. Let the people decide who they want to drive
with. The better product will always win out and if that is Lyft, Uber or
whomever, it really highlights the issues that plague the taxi industry.

~~~
tptacek
Uber can honor city rate caps, require the appropriate insurance for their
drivers and take financial responsibility for drivers that fail to maintain
that insurance. Uber can also comply with the same rules about coverage areas
that cabs are required to comply with. They can do all these things but choose
not to. What's to "work around"?

One of the blinders people wear when talking about Uber is the "it's just
Uber" blinders. No: if Uber's regulatory arbitrage strategy succeeds, they'll
be followed by even less scrupulous companies looking to exploit the same
loophole.

~~~
DigitalSea
You make it sound so easy. The first issue is, taxi licences are super
expensive. Don't get me started on cities that deal out medallions at
ridiculous prices. In New York a taxi medallion will cost you about $1
million, how ridiculous is that? The system itself is broken and outdated,
currently the system is engineered to benefit the companies selling medallions
and those other bolt-ons that come with owning a taxi.

However, I do think that Uber and other services should honour pricing caps in
cities that have them, they should also comply with rules regarding insurance
and other reasonable things asked of them. But having said that, even if they
were to honour pricing caps and get the appropriate insurance for their
drivers, it will never be good enough for some cities, take Vancouver as an
example.

In places like New York especially, too many people benefit off of the
existing cartel like structure of leasing out a medallion, insurance and all
of the other costs that tend to add up quite quickly. Things need to change,
and I am glad there are companies out there pushing the boundaries and getting
the conversation going. Gone are the days of a single company having a
transportation monopoly in a city.

~~~
minthd
> Gone are the days of a single company having a transportation monopoly in a
> city.

Really ? Isn't that a bit short sighted ?

~~~
click170
Why is that short sighted?

Do we disagree about competition being a good thing for consumers?

~~~
minthd
Because UBER will be a monopoly.

------
brandonmenc
> "If Uber thinks there should be no maximum price on what they charge
> Portlanders, they should make their case to the Portland City Council,” City
> Commissioner Steve Novick says in a statement.

If Uber were the only way to get around town in Portland, that might be a
valid complaint.

If you want Uber to go out of business - and it seems like supporters of this
action are in that camp - you _want_ them to charge more than people are
willing to pay.

~~~
tptacek
No, that's only true if there is exactly one price sensitivity for the whole
city. But there are many. I'll take an Uber black car just because it's
convenient and comfy. I'm not price sensitive. My neighbors might not be
comfortable spending even the normal cab rate. If Uber gets to cream my
business off the top of the market, it harms the cab companies, drives some of
them out of business, and in doing so harms the consumers who depend on those
cab companies and their rate structure.

People forget that one of the reasons we have cab regulations is that taxicabs
are, for major metro areas, a de facto component of the public transportation
infrastructure.

~~~
Pyxl101
There is an assumption within your comment that these different market
segments ought to be served by a single transportation company. If Uber wants
to come along and take the "cream", let them. If that means traditional taxi
companies go out of business, or have to change their business model and cater
to a different segment, then so be it. That's competition, and competition is
a good, healthy thing. It keeps us strong. A market that doesn't allow this is
dysfunctional.

If some of these segments are unprofitable and cannot be served by regular
businesses, then that's good for us to realize! That encourages us to have the
discussion we ought to be having, which is: should we provide these services
in pursuit of a social goal? And what are the services worth?

I would be much more in favor of cities contracting with private companies to
provide a service than passing regulation to require it. Requiring a service
by regulation hides the true cost of the service and causes it to be borne in
random places and in random ways through price increases. It's like a hidden
tax.

There should be a clear dollar cost for these services in the budget, and
voters should be able to inspect the costs and decide what's reasonable.
Requiring private companies to provide the service through regulation does not
promote a transparent democracy, since voters cannot easily determine the
cost, and indeed the actual cost may be hard to determine.

For example, if the city wishes there to be a certain number of vehicles
available for the disabled, then a reasonable and fair approach is to ask
private transportation companies to bid on a contract to provide that service.
The city should be satisfied paying the lowest bid for that service. If the
lowest price is viewed as too high, then this is a signal that either some
political debate is needed regarding the budget for such things, or that the
resources should be spent on another social goal which provides value more
effectively.

Far too many different issues are bundled together in the discussions of
taxis. We ought to unbundle them. [Edit: Sorry for reposting my comment. There
seems to be some kind of issue that's preventing me from editing my comments
in minor ways like I usually can.]

~~~
sokoloff
Should the electricity distribution company be allowed to cream off tptacek's
and others who are less price sensitive business?

The natural gas/water/sewer company? The fire department?

What if the end result is that rich people get stable electricity, gas,
water/sewer, basic internet, and fire protection services, while the poor can
just fend for themselves or hope that the low bidder utility has power
tomorrow?

There are companies granted/licensed some form of monopoly in exchange for
minimum mandated services, maximum mandated rates, and other limits to
capitalism in its purest form because government believes that their service
is essential in some way.

Many cities operate taxi licensing in this light. That you view this as prime
facia evidence that the taxi market is dysfunctional and that Uber should be
able to selectively siphon off a portion of the demand without abiding the
rest of the government-regulated taxi requirements is consistent internally,
but I believe misses some of the underlying public good that the current taxi
system provides.

~~~
Pyxl101
Yes, you make a good point that utilities are not always profitable, and as a
social policy it's reasonable for cities to ensure that everyone gets access.
I agree with you that there is a sort of public good provided by taxis, but I
disagree that it's a natural monopoly of the kind that you mentioned.

There are varying strategies for solving the problem of social goods like
utilities. In some cities, utilities like these are publicly owned, such as
Seattle City Light.

I'm not convinced that individual transportation services are sufficiently
similar to utilities that they fall into this category. What utilities have in
common is that they fundamentally share physical infrastructure: pipes, wires,
etc. It does not make economic sense to run duplicate wires everywhere, and so
we grant a monopoly to one utility company. By comparison, each private
vehicle traveling along the road is physically distinct from all others.
(There will certainly be economies to scale for a single organization to
operate a larger fleet of vehicles, but that's always true in every business.)
Buses make sense to offer as a public good since they represent collective
transportation; whereas private for-hire vehicles inherently offer
individualized transportation. So it may be a public good, but it's not quite
collective nor a natural monopoly.

I don't think it's inherently unreasonable for cities to want to ensure access
to this type of individual transportation [1], but I question whether the
current taxi model is the right one. What is the best way to meet these public
needs? I don't know for sure, but some attractive alternative approaches
include: (1) offering a subsidy for private transportation companies to meet
certain criteria (e.g., area coverage) (2) soliciting bids for private
contracts with companies to provide the service under contract (3) directly
providing the service (metro). Forcing companies to provide the service in
order to get licensed to provide _other_ services is heavy-handed and
unjustified based on what I've learned so far.

I have not heard a convincing argument for why a company that wishes to
provide some transportation services should also be forced to provide other
transportation services at certain prices. The utility company should be
forced to support everyone because we don't want to dig up our roads over and
over again, and because water and electricity are necessary for life, and
sewer for sanitation reasons. The fire department should support everyone so
that your house catching fire doesn't cause mine to burn down. There are good
public benefit arguments behind most of these utilities. Are private cars that
drive you around really in the same category? And if they are, what stops
cities from solving these problems with a much less heavy-handed approach that
enables innovation?

Isn't Uber serving taxi-like needs through UberX anyway? It's not as if the
poor would be without transport even if only Uber was available. Let's allow
private companies to provide what transportation they can. The existence of
these companies does not stop the city from offering alternative solutions for
various market segments, or offering a subsidy to entice companies to meet
those needs.

I would like to make one last argument against the current model. The current
regulation model imposes a lot of costs on transportation companies that are
effectively a hidden tax - when in any aspect of their operations they're
forced to do something unnatural. These costs surface through higher prices.
However, these prices are opaque. A voter in the district can't necessarily
determine how much higher taxi prices are because of the city's decision to
force them to do <X>. This does not support an informed, rational democracy.
Consider the alternative models I've proposed above. They all essentially
include a contract where the city is providing a service directly, or paying a
third party to do so. You can imagine computing a very clear line-item cost in
the budget for each of the services that the city wishes to be provided.
Consequently, voters in the district can learn about these costs
transparently, and reason about whether the cost/benefit tradeoff makes sense
to them. It is possible for voters to say, "This service is too expensive - we
should cease funding it". How could we determine whether certain requirements
mandated under taxi regulation are too expensive? Does deciding to stop
providing a service mean that the city needs to amend its law? (Inflexible
and, again, heavy-handed.) The costs are known only to private companies, and
even they might require actuarial analysis to understand the costs.

Whereas if you pay a private transportation service to offer subsidized taxi-
like transportation in certain areas, in certain hours, then we know exactly
what it costs, and we can make an informed decision about whether to continue
to provide the service or not. Regulation requiring private companies to
provide the service as part of other activities just obfuscates the cost and
prevents us from reasoning about it intelligently, like in debates like this.

[1] In fact, I hope the city of the future will move away from buses, and move
to automated fleets of something like robotic Uber, scheduled in real-time
based on live transportation needs

~~~
sokoloff
Good comment, and I'm replying 75% to give that feedback and 25% to comment on
one point:

 _Isn 't Uber serving taxi-like needs through UberX anyway? It's not as if the
poor would be without transport even if only Uber was available. Let's allow
private companies to provide what transportation they can. The existence of
these companies does not stop the city from offering alternative solutions for
various market segments, or offering a subsidy to entice companies to meet
those needs._

The presence of unliscensed (as a livery service) operators in a city has two
possible negative effects on the transport options for the community.

1\. The "creaming off" of some high-value trips makes it less economical to
have cars in the area to serve other needs (like bringing groceries home from
the supermarket with good selection and low prices rather than buying all food
from a corner bodega).

2\. It's well and good to suggest that the city step in to provide subsidized
transportation (directly or via an agent), but without the licensing and
taxation revenue, that money now has to come from general funds whereas,
before Uber, it was provided without hitting the general funds of the city.

3\. There is a public good provided by "must transport" laws that most livery
services operate under. That relates to #1, so I won't call it a third point.

For the record, I agree with you that the current taxi system is antiquated
and if we were to design an idealized system from scratch, it might look
closer to Uber/Lyft than the current system, but I don't agree with "screw the
laws; they're stupid anyway, so let Uber do whatever they want" approach that
many pro-Uber advocates seem to advance (of course, not in so many words).

------
tim333
Perhaps Uber's 'most ethically challenged company in Silicon Valley'
reputation, as Peter Thiel puts it, is starting to cause them problems.

------
Pyxl101
Does anyone know if other towncar services in Portland are required to follow
the same regulations that Uber is being asked to follow? Services of the sort
that show up under "Portland towncar" or "Portland limo".

A quick search on the matter reveals that Portland seems to have imposed
ridiculous requirements on them:

\- a requirement that forces customers to arrange a trip with an executive
sedan or limousine at least 60 minutes prior to pick-up. For example, if you
request a town car and it comes in 10 minutes, you must wait 50 minutes before
you are legally allowed to enter the vehicle.

\- a requirement that forces executive sedans and limousines to charge a 35%
fixed premium above current taxi rates established by the city.

This seems like serious and absurd intervention in the market for
transportation. It's difficult for me to believe that rules like this are fair
and justified. An article [1] suggests that these rules were put in place to
"differentiate towncar service from taxicabs". The implication is that without
these arbitrary limitations, taxicabs could not compete with towncars
effectively. In other words, in an effort to protect the taxicab monopolies,
the city is impairing other business.

It seems to me to be the behavior of people in power who believe they know
best. Haven't we learned by now that central planning is usually not an
efficient way of allocating resources? This kind of interference in the market
sounds like authoritarianism of the sort that I'd prefer not to see in my
country.

Strive to minimize regulation: limit it to matters of health and safety.
Requiring insurance and an appropriate driver license seems reasonable.

It seems like Portland is imposing rule after arbitrary rule on the
marketplace. If I lived in Portland I would be furious that the city is
interfering in such a way with business, and my personal right to contract
with others for transportation in the manner that I want to. I suspect the
city could accomplish its goals (such as ensuring that a certain number of
vehicles provide transportation for the disabled) in a more efficient and fair
manner, such as establishing a subsidy for transportation vehicles meeting
certain requirements. It seems unreasonable to me that the city requires taxis
to provide that service, rather than providing a subsidy for vehicles to
support the disabled, or providing its own transportation directly, or
contracting with a privacy company to do so. The point is, those issues
shouldn't be arbitrarily bundled together (the business facility that provides
taxis and the business facility that provides transportation to the disabled).
Allow them to be the same company or not as the market allows.

It also seems absurd to regulate the price charged for a fare. I have never
understood the objection to surge pricing. When crazy things are happening
(like snowstorms), drivers will not be out on the road working unless they're
compensated more than usual. The rougher the circumstances, or the busier
things are, the more the price needs to rise in order to provide adequate
supply. Anyone objecting to the concept of surge pricing clearly does not
understand basic economics. (Objecting to the implementation is a different
matter.) A city trying to regulate maximum price is taking a thoughtless
approach, and cannot be understood to genuinely have consumer interest at
heart, since consumers will typically prefer to have transportation available
at a high price than not at all.

[1] [http://www.geekwire.com/2014/portland-
ridesharing/](http://www.geekwire.com/2014/portland-ridesharing/)

~~~
tzs
> When crazy things are happening (like snowstorms), drivers will not be out
> on the road working unless they're compensated more than usual

Balderdash. There's a trivial way to get drivers on the road during bad
weather without surge pricing: you tell them that if they don't work during
bad weather, the won't be allowed to work during good weather.

> Anyone objecting to the concept of surge pricing clearly does not understand
> basic economics

There's more to economics than what they cover in Ec101. A free market is not
always the most efficient way to allocate resources. That's why, for instance,
emergency rooms treat people based on the seriousness of their condition
rather than based on who is willing to pay the most. Transportation during bad
weather can become that kind of resource.

~~~
SilasX
>Balderdash. There's a trivial way to get drivers on the road during bad
weather without surge pricing: you tell them that if they don't work during
bad weather, the won't be allowed to work during good weather

Honest question: how well does that actually work in practice? Do cabbies
generally fear the prospects of turning down have-to-takes? When was the last
time one faced any consequences for nope-ing right past a black person? And
would it even be practical?

And how well does this "vinegar" strategy work to improve supply generally?
Would you prefer a world in which grocers had to maintain constant produce
prices through the year to the current one in which they charge more as the
seasonal supply contracts?

~~~
MetaCosm
It doesn't work at all -- because regulation is meaningless without
enforcement. The real conversation should be about enforcement... not what is
written down, what is enforced. There are a lot of stupid laws and regulations
on the books in the US that should be gone, but instead are simply unenforced
([http://www.dumblaws.com/laws/united-
states/oregon](http://www.dumblaws.com/laws/united-states/oregon)).

Additionally, Uber is exploding in popularity because taxi's did a horrible
job, abused their government granted monopolies and basically made life
miserable for people... the first person in my peer group to start using Uber
regularly did it because of the challenge of getting a cab while black late at
night.

------
closetnerd
What the hell is going on? This is nonsensical now.

~~~
emergentcypher
What's going on is Uber decided that because it doesn't like laws regulating
taxis, it should be allowed to just ignore them.

~~~
SilasX
In sharp contrast to normal cabbies, who pick up the very first person hailing
them without any discrimination, never refuse a destination, always have
credit card machines that work, who completely don't expect you to pay them a
dime beyond the regulated rate, are perfectly diligent in working with the
disabled, and report every last dime that passes through their hands -- or,
whey they fail to do these things, are prosecuted by the city with the exact
level of vigor used in the current case against Uber. /s

Sometimes it sucks when people ignore the law. So does selective prosecution.

~~~
emergentcypher
I missed the part where any of this justifies Uber's behaviour. This is just a
bunch of baseless conjecture about what you think "normal cabbies" do.

~~~
closetnerd
I think your problem is that you assume that because Uber might be, in some
cases, be ignoring regulations that that means that Uber's behavior is wrong.
The law usually not a guideline for ethical behavior. Specially in a country
as bureaucratic as ours. The law quickly becomes something that protects
incumbents and stifles innovation.

