
Uber, Lyft crackdown in Seattle may be followed in other cities - titlex
http://www.bizjournals.com/sanfrancisco/blog/2014/02/other-cities-may-follow-seattles.html
======
Joe8Bit
Looking at the debates there are in local governments in the US, it's
interesting to look at how Uber has been received in London.

In London, we've had a setup for licensing 'mini-cabs' for almost a decade
(and they've been around for far longer than that). In essence, they are all
registered and regulated by a central authority, in a similar (but much less
strict) way to London's famous black cabs. The difference being that mini-cabs
are normal cars, that must be prebooked.

In that sense Uber fit right in, they're just another (one of 100's, if not
1000's) mini-cab providers. So for us in London, Uber hasn't really been
revelatory at all except in the app driven aspects of their service (which is
great).

There's always been a tension between liveried cabs and these 'mini-cabs' in
London, and that's something that's been really interesting to see played out
in different markets in the US. Especially when it's tied to the more
prevalent laissez-faire attitude that the US has to market regulation.

~~~
drabiega
That laissez-faire attitude, to the extent it exists at all, is generally only
aimed at the federal and to a lesser degree state level. At the local level
the voter involvement is so low that corruption and pandering to special
interests are the norm.

------
droopyEyelids
In Chicago all taxi drivers must obtain a Chauffeur's License before driving.

The Chauffeur's license exam includes background checks, tests for common
infectious diseases (tuberculosis), and a basic knowledge test of the city.

Uber does background checks, but they don't test for TB and I've had three
UberX drivers that didn't know where Lake Michigan was when we were two blocks
away from it.

Also, licensed taxi drivers have a number that you can report to 311 for
safety purposes.

I think Uber could have avoided a portion of this backlash if it would have
taken more steps to ensure safety-parity while side-stepping the medallion
limitations.

~~~
barclay
Not to sound like the classic idealist libertarian, but isn't this how uber
and lyft will be better? You ride with someone who's clueless or an asshole,
rate them 1-star, the ratings compound, and unless they improve quickly
they're tossed out of the driver pool. Immediate impact.

~~~
lmg643
I think the rating is a pretty weak way to address issues like this.

I'm a big fan of Uber, but the insistent ratings are really annoying. For
example - I take a ride, the car is fine, the driver is a little annoying,
there is traffic and but we get there. Is that a "5" star ride? a 4 star ride?
a 3 star ride? To me, 3 stars is average. to Uber, 3 stars is "you're fired."
doesn't make sense.

Not to mention - how the heck would I know if he was vaccinated? that's just
gross to contemplate. What if we rate him a 5, but then i get hospitalized
with some crazy sickness later? and I thought taxis were dirty - i take it
back.

Maybe public health officials might know something after all.

------
Dirlewanger
Fuck, I sincerely hope our generation (early-mid 20s) do not react like crusty
sheltered curmudgeons in 15-30 years when they occupy these positions of power
and are confronted with something they've never seen before. I'm not too
hopeful though. One of the few constants in life is that while individually
people may change, groups of them rarely do.

~~~
rayiner
I hope "your generation" at some point realizes that the challenges facing
Uber don't stem from "opposition to the new." People aren't shocked and
confused by the sheer novelty and innovation of being able to call a cab with
a phone. They're reacting to companies trampling over settled expectations and
compromises. Municipalities created these regulated taxi systems, and used
monopoly status as a carrot in return for imposing regulation. If they let
Uber and Lyft come in and skim the cream off the top of the market, without
having to follow those same regulations, they would be failing to hold up
their end of the bargain.

This isn't empty scolding. As "software eats the world" and tech companies
start trying to compete in "meat space" industries, it will be imperative for
them to understand why things are done the way they are, and how fruitful
progress can be made without creating unnecessary friction by simply ignoring
settled expectations. People won't react well to someone just plucking the
onion out of the varnish unless he can demonstrate that he understands why the
onion was in there to begin with, and articulate convincingly why it no longer
needs to be in there.

I totally agree that the structural compromise that led to taxi monopolies
need to be revisited. But not because Uber and Lyft change the market dynamics
in any relevant way. These monopolies need to be revisited because highly
regulated markets like that have proven to become a liability over time, and
the deregulation experiment in the U.S. over the last few decades has shown
that lightly-regulated markets function better.

~~~
dbingham
I was with you right up until the last sentence. I do not think it is fair to
say that "the deregulation experiment has shown that lightly regulated markets
function better". This is how we wound up with the 2008 crash, the ascendency
of finance and the absurd wealth gap we currently have.

~~~
rayiner
Historically in the U.S., "regulation" implied heavy-handed measures like rate
setting, price controls, capacity setting, market segmentation, granting
monopolies, etc. Scaling back those measures has been very successful. For
example, deregulation of freight and airlines in the 1970's allowed the modern
integrated delivery networks that make Amazon possible. The trend since then
has been to avoid these particularly heavy-handed and market-distorting sorts
of measures. I don't think even proponents of heavier banking regulations
espouse regulating banks in the way we say regulated passenger railroads
(which killed them).

In the context of cabs, a "lightly regulated" regime might require background
checks, minimum insurance, and some sort of mechanism for verifying driver
identity and reporting problems. Variables like rates, capacity, coverage
area, etc, could be left to the market.

------
CurtHagenlocher
I'm genuinely curious: what is it that distinguishes these services from
taxis? Why is it okay for one to be regulated but not the other -- or do
proponents of these services generally think that taxis shouldn't be regulated
either?

~~~
analog31
In a big city like NYC, taxis are part of an overall transportation system.
Regulating them ensures that they are available where and when they are
expected to be. People plan their activities around the functioning of that
system.

Naturally, a different system might work better or worse. A worse outcome
would be more people taking their own cars into the city because they need or
want quick access to a vehicle.

Regulating the number of cabs probably helps deal with traffic congestion, and
also makes it potentially possible for drivers to earn a living wage. However,
I can see where on-call cars are a different situation because they would
serve a different purpose.

~~~
icebraining
_Regulating them ensures that they are available where and when they are
expected to be._

But does it really? A study[1] from 2000 shows that the availability is not
that great in NYC. Any why should it be, if the regulations cap their number?

 _Regulating the number of cabs probably helps deal with traffic congestion,
and also makes it potentially possible for drivers to earn a living wage._

Why, if most drivers can't afford the medallions and end up having to work for
the few that can? In fact, the same study shows that as industry revenue
grows, the wages don't follow.

Frankly, this is typical of regulations as they're implemented in the US and
other countries (including mine). It's the Bootleggers and Baptists all
around, which mostly end up feeding the capitalists at the expense of lower
classes.

[1] [http://www.nytimes.com/2000/03/17/nyregion/riders-know-
study...](http://www.nytimes.com/2000/03/17/nyregion/riders-know-study-
confirms-taxis-are-harder-to-find.html)

------
Shivetya
Last I read the bill in Georgia didn't clear the House on crossover day which
is the last day a bill can be passed on to the Georgia Senate.

With regards to the restrictions, the primary backers of the bill in Georgia
were existing limo companies. I would be surprised if similar groups are not
the reasons for the problems such companies face in other states.

------
iselkow
What are the arguments in favor of this regulation? I'm sure that anti-
competition lobbies from limos, cabs, etc. play a role, but is there something
safety-related as well? And if so, why would 150 Lyft drivers be safer than
400 Lyft drivers?

~~~
patio11
I don't subscribe to it, but:

Taxis negotiated their monopoly by giving us concessions for e.g. universal
service (a taxi, unlike most businesses, is obligated to serve any customer
regardless of whether their custom is the most profitable use of the taxi's
time). This allows us to depend on taxis as an outsourced component of our
public transportation infrastructure. If competition creams the really
desirable fairs away from taxis, that might kill taxis. DSX has no desire to
implement universal service and never will. This will adversely affect our
most vulnerable citizens, like little old ladies who depend on the $3.50 fare
to the local supermarket (whose custom taxi drivers hate) due to limited
mobility.

How can we be sure drivers at DSX have adequate insurance, safe driving
records, and obey the traffic laws? DSX says that they have adequate
procedures in place, but DSX has basically designed those procedures itself,
and on the face of it DSX seems to operate under accept-everyone-and-weed-out-
underperformers, which still means that at any given time there are dozens of
commercial drivers who _we know nothing about_ operating on the streets of our
fair city.

We depend on "if you screw up, you lose your medallion" to discipline taxi
owners (as opposed to operators) in this city. "If you screw up, your account
gets deleted and you have to move to a competing provider" doesn't apply the
same level of incentive.

If Disruptive Service X (DSX) will let literally anybody with a car start
working for them, how can we be sure that DSX isn't a summon-a-rapist app?
Cars present a higher risk of rape/kidnapping than e.g. barber salons (n.b.
which we also regulate), since a) they move and b) the passenger generally
doesn't have a convenient escape out of the door.

~~~
twoodfin
The universal service concession is the most convincing argument to me; rape
and kidnapping the least. After all, each DSX user by necessity has a mobile
phone in their hand, and the entire trip from initiation to arrival is
scrupulously monitored and recorded by DSX. Not much possibility of crime, at
least without being quickly caught.

------
digitalengineer
Same as AirBNB. If you can't beat them... lobby to ban them.

~~~
Fede_V
I'm fine with abolishing almost all those regulations - they are a huge
barrier to entry, and they serve very little public good. However, hotel rooms
are highly taxed, while most AirBNB rooms are not - apartment rents are often
rented at submarket prices under rent-control schemes, yet the tenants charge
full fair to rent out their rooms.

Right now, AirBNB and Uber are basically trying to avoid all regulations by
pretending to be just middlemen, but that argument is transparently bullshit.

~~~
bertil
The intermediary argument _is_ over-used, but I doubt AirBnB is trying to
fight hotel on the cost aspect: most of the time, they tend to be similarly
priced. They don’t really recommend price at all. My impression was more that
hotels (like taxis) abuse the market by strangling the offer, and forcing
people to upgrade when they don’t care about luxury.

The company was started to help political operative (the most amenable form of
interns) to find a dry place to nap during conferences: that sounds like a
specific, unaddressed need rather than a tax evasion scheme.

> highly taxed, while most AirBNB rooms are not - apartment rents are often
> rented at submarket prices under rent-control schemes,

Actually, the handful of people operating ‘hotel-like’ plans (short-term flat-
share, really) that you refer too are always doing it from recently build, not
rent controlled, purchased flats, for all sort of reasons; they all explicitly
mention that operating anything significant from a rent-controlled flat will
get you out in the street faster than you can list your flat.

The classic case is this ‘let’s limit the number of license for safety
reasons’: if you want high-grade manure, _that_ is top-shelf bullshit. I went
to San Francisco once, and I never felt so much in danger than in that cab: no
seat belts, speed limits were for the wuss that he was honking at through-out,
he gave multi-tasking an Olympic status; even looking at the (packed) road was
too much for him. To the point we felt the need to call the company, if
anything to make sure whomever would surely die in there soon would have
proper insurance. Let’s say we were told in no uncertain terms that we were
alive, therefore our livelihood was not supposed to be our concern. Same for
rats in hotels: I don't mind an accident, but I expect action, not denial. I
don’t understand how limiting the market is going to have a positive impact on
service when the human touch is… lacking.

I chose AirBnB because they had interesting features, as in, creative business
model that make they offer relevant to XXIst century dweller: personal
contact, restaurant recommendations from our host that make sense, a Wifi
router that I can physically access when it needs rebooting, free access to
kitchen that won’t charge me a day’s worth of wage to toast two slices of
bread at night, significant rebate when staying more than a couple of days.

> hotel rooms are highly taxed, while most AirBNB rooms are not

As you point out: they are intermediaries, and I’m positive they wouldn’t care
charging extra tax. I would put them on a list, and that list could be
artificially limited, making them possible victim of a lobbying effort by
hotel chains who want to keep a stronghold on a market, rather than admit it
has evolved and adapt -- so I understand their reservations. But passing taxes
is generally a business-neutral act, so I doubt they care that much. Once
again: look and compare, they are not trying to be cheaper than hotels.

~~~
Fede_V
A few things:

\- There's been several reports of SF landlords kicking out tenants from rent
controlled apartments to lease out rooms on AirBnB. While I am against rent
control (it's a terrible system that creates a few winners and fucks over most
people who cannot get such a flat) it's obvious that this is an abuse of the
system

\- Until recently, AirBnB fought tooth and nail against paying hotel taxes.

I think safety regulations are mostly overkill, and I'd get rid of most of
them in a heartbeat, but while those regulations exist, you cannot simply
outcompete other players that are forced to follow regulations you avoid.

~~~
bertil
> There's been several reports of SF landlords kicking out tenants from rent
> controlled apartments to lease out rooms on AirBnB.

That’s the opposite scenario of the one describe initially.

> Until recently, AirBnB fought tooth and nail against paying hotel taxes. > I
> think safety regulations

You appear to be conflating taxes (that do nothing for the end user, if
increase budget pressure on safety and service) and safety -- and ignoring the
fact that what is generally actually enforced are quotas. There is no
significant taxes on taxis for instance: it's in every case I’ve heard about a
self-enforced tacit price for recommending someone for a licence once you
quit; the actual tax exist, but is generally negligible.

> while those regulations exist, you cannot simply outcompete other players
> that are forced to follow regulations you avoid.

Actually, if your service include a reporting tool, the HUGE and
unquestionably largest addition of both AirBnB and Uber, but before them eBay,
you end up having to follow far stricter practice that include service, and
that, unlike regulations, can adapt.

Price control, quota, safety regulation, user reports… if you confuse those,
you end up presenting a false dichotomy between two ways of organising a
service.

------
ameister14
Limiting the number of drivers Uber or Lyft is allowed to have working in an
area is short term thinking, likely promoted in large part by existing taxi
and limo companies that want to keep their businesses going.

It's nothing compared to the regulatory push the teamsters will make when
automated trucks begin to take on the existing industry. That said, I think
it's a good lesson for SV companies and a warning to count on and prepare for
government reaction to new technologies effect on regular jobs.

------
jheriko
it is sad to see this but thoroughly unexpected.

all these useful and innovative startups are great, but they need to learn the
most basic respect for the law and its spirit. this is the nth time something
like this has happened in the startup community and its embarassing.

we have taxi driver licenses and regulations for a reason. naivete isn't an
excuse for blatantly circumventing them - even if you provide a genuinely
useful service that we would all like to see grow and help redefine our
futures...

~~~
jheriko
oh wait ... that should have been 'expected'

------
sanctuslibre
It is surprising that on a news site focused around entrepreneurial capitalism
in technology, the majority of the commenters are statist by default. Have you
not heard libertarian/free market arguments on this topic or have you found
them unconvincing?

