
UberCab Ordered to Cease And Desist - tswicegood
http://techcrunch.com/2010/10/24/ubercab-ordered-to-cease-and-desist/
======
sriramk
I think there is a pattern across both UberCan and AirBnb where both are
facing opposition from existing, regulated industries (taxi services and
hotels respectively).

Among all the posturing essentially meant to protect their existing
businesses, I do think they have one valid point - that they both skirt around
laws and regs in place. Though a lot of these laws and regulations are
outdated/driven by special interests, some of them are in place for a reason.
For example, not having hotels in residential areas so that neighbors aren't
disturbed. Or having safety training for drivers of cabs.

I do worry about the risk that UberCab/AirBnb could cause to its users (or
others indirectly impacted).

In both cases, the existing industries aren't doing themselves any favors. The
argument around existing dispatchers maybe not making a living anymore - if
someone else provides a better service than I do, it isn't their fault if I
can't make money anymore. Reading the comments on the cab drivers' blog [1] is
a bit sad. One of the commenters recognizes how good Ubercab is but uses that
as an argument on why they should be shut down, instead of going "Hey, what if
we started doing some of the things they do and improve?"

[http://phantomcabdriverphites.blogspot.com/2010/09/tac-
iii-p...](http://phantomcabdriverphites.blogspot.com/2010/09/tac-iii-
part-2.html)

~~~
cubix
_Or having safety training for drivers of cabs._

If only that were true. Taxi drivers are among the most reckless drivers in my
city, and pretty well every other major city in North America that I've
visited. If there is any training, it is not taken too seriously.

~~~
pierrefar
_every other major city in North America_ Why stop at North America? It's
worldwide.

BUT: The only good thing about taxis in London is that they need to pass a
test called The Knowledge (refs below) which means they are able to figure out
the best route to anywhere in London on the fly. And if you think this is
easy, it's not: the structure of the brains of taxi drivers is actually bigger
in the part responsible for spacial memory, the discovery of which led the
researchers winning the Ig Nobel prize.

Refs:

[http://www.tfl.gov.uk/businessandpartners/taxisandprivatehir...](http://www.tfl.gov.uk/businessandpartners/taxisandprivatehire/1412.aspx)

[http://en.wikipedia.org/wiki/Taxicabs_of_the_United_Kingdom#...](http://en.wikipedia.org/wiki/Taxicabs_of_the_United_Kingdom#The_Knowledge)

<http://news.bbc.co.uk/1/hi/677048.stm>

<http://news.bbc.co.uk/1/hi/sci/tech/7613621.stm>

<http://improbable.com/ig/winners/#ig2003>

~~~
Murkin
Can you elaborate on why this is a good thing ?

Instead of using a 200$ GPS, they are required to spend a long time studying a
body of knowledge superseded by technology.

And this translates to higher costs for the casual cab-rider.

~~~
ramchip
I suppose there are cases where people want to go to certain places, eg. "the
shopping center", without having specific enough information to look it up
with a GPS. Also, the driver knows ways that may be faster than what a GPS
will suggest, since he knows about traffic, construction, etc.

Then there's the social aspect: by being more strict and maintaining an image
of quality, you can attract better, nicer drivers.

~~~
Murkin
Obviously a driver shouldn't be someone who is in the city for the first time.
They know all the major points (like shopping centers).

The other points just shows that GPS have a bit to go yet, and they are going
there. There are quite a lot of GPS solutions who get real-time traffic
updates, construction, etc (look at waze.com)

The second point is true, wonder if there is a better way to solve it tho

------
corin_
Maybe I'm just misinformed but... basically they're running a taxi service
without a license to do that, then acting surprised when the city calls them
on it?

There's a taxi company I use whenever I'm in London called Addison Lee, and
they've done the same as UberCab - using nice technology to know where you
are, where the nearest available cars are, how long it will take for a car to
get to you... In actual fact, at least based on
<http://www.ubercab.com/learn>, AdLee is better: it has all the benefits of
UberCab, plus they tell you the price of the journey before you book the car
(it won't become more expensive if you get stuck in traffic, or if the driver
takes a longer route), which always works out cheaper than a black cab, in my
experience. Oh, and in adition to letting you pay with the credit card on your
account, you can chose to pay by cash if you so wish.

Anyway, my point? Seems that Addison Lee have been (albeit in a different
city/country) doing what UberCab is doing, slightly better, and for quite a
bit longer: and they actually bothered to pay to be a licensed taxi provider,
meaning that the London officials don't have a problem with them.

~~~
tkalanick
Ubercab is not a taxi service and does not own or operate limo vehicles. We
simply connect consumers with existing Limo Drivers. We do make sure that all
limo drivers that connect are properly licensed and have the appropriate
insurance.

~~~
corin_
"Its cars don’t have insurance equivalent to taxis’ insurance" is taken
directly from the TC article.

As to the logic of "we are not a taxi service, we just make money putting
customers into taxis", I really can't comment on how the law views this.

If the SF Metro Transit Authority withdraws the cease and desist order then
please accept my apologies for making bad assumptions, but given the law
enforcers say what you are doing is not allowed, I can only assume that it is,
indeed, not allowed, regardless of how you word what exactly you do.

Either way, I hope you get it resolved (whether that means them backing down,
or you agreeing to whatever they're wanting of you), other than this current
situation your service looks pretty great, and I'm sure I'll use you some day
when I'm on your side of the pond.

~~~
mustpax
_If the SF Metro Transit Authority withdraws the cease and desist order then
please accept my apologies for making bad assumptions, but given the law
enforcers say what you are doing is not allowed, I can only assume that it is,
indeed, not allowed, regardless of how you word what exactly you do._

I'm sorry but you're arguing that SF MTA is infallible and you are wrong.

~~~
corin_
My views have been based on the facts I've been given. I'm not from SF, until
I'm given a reason to believe that the MTA isn't actually following the law,
I'll keep assuming they are.

Maybe I should have been more specific before: I'll also apologise if the MTA
don't withdraw, but are instead shown to be in the wrong.

------
zachware
The conflict was inevitable but as we often see in business, old players use
regulation, unions and back room deals to protect their markets. Look at the
RIAA, TV and movie industries. The technology is available to bring content to
any device, anytime but they use regulation to stop it.

It's bullshit. SF taxis are inefficient and difficult to use. Ubercab solves a
problem and calls out just how ridiculous the SF Taxi system is. Instead of
fighting to make their business more relevant, the taxi unions fight with
regulation.

I use Ubercab a lot. Why? * Because a car comes to me in a few minutes. * I
don't have to stand in the rain and wonder if the illuminated taxi light means
the taxi will stop or not. * I don't have to wonder if the cab takes cards or
if the driver will simply refuse to take them even if his company does. * Most
importantly, I don't have to hold on for dear life wondering if I'm going to
die before i get where I'm going.

Let's all stand up and say screw you unions. Ubercab is an innovator. SF
taxis, be more efficient and you'll win. Otherwise, get out of the way.

------
tlrobinson
This sounds familiar:

    
    
        "Ubercab threatens dispatchers’ way of earning a living"
    

Oh, yeah:

    
    
        "[TECHNOLOGY] threatens [PROFESSION]s' way of earning a living"
    

Not a valid argument.

~~~
eli
Yeah, but neither is ignoring the law because you disagree with it.

~~~
AngryParsley
I think "ignoring the law because you disagree with it" is called civil
disobedience. Although the term usually means individuals breaking laws for
moral reasons, not companies doing it for efficiency and profit.

Edit: I just wanted to point out that it is sometimes valid to ignore a law
because you disagree with it. I'm not saying Ubercab is in the right.

~~~
gloob
Perhaps I'm just old-fashioned, but the argument "Companies have the right to
ignore the law if doing so increases profits" seems rather...unconventional.

~~~
AngryParsley
That is twisting my words beyond even the most uncharitable reading.

~~~
gloob
The charitable reading of your words, if I didn't misunderstand, is "many
people think that people are sometimes justified in ignoring the law,
depending on the situation." That's more or less a truism.

Edit: Upvoted you back to 1.

------
jrockway
This seems like the perfect business to run from outside of the US. To run a
traditional taxi company, you need to have a presence in the area where the
taxicabs are. To run a website that connects two people together, you can be
anywhere. And you are outside of the legal reach of the City of San Francisco.

Sure, the _users_ will be violating some city regulation, but that, like file
sharing, is unprofitable to follow up on. (AirBnB is in a similar situation.
No need to give the irritated local governments a legal target.)

~~~
corin_
Unless they relocate all drivers to live outside the US they're going to have
a slight problem, I think...

~~~
jrockway
The drivers are already licensed. They can drive wherever they want to, and
pick up whomever they want to.

The specific legal problem that the article mentions is that operating the
dispatching company is illegal.

~~~
corin_
Presumably these two issues would still exist:

    
    
      - Its cars don’t have insurance equivalent to taxis’ insurance.
      - Limos in U.S. cities usually have to prebook an hour in advance, by law

~~~
uvdiv
The overriding issue is that there is a taxi cartel and the city enforces its
quotas:

<http://www.medallionholders.com/medallions.html>

You can't just pay for insurance and be legal. You're not allowed to compete,
period.

------
enki
i've given up on trying to get a cab in sf.

there's only 1381 highly regulated taxi medallions and a constant shortage.
most potential customers have, just like me, given up on ever getting a cab
when they need one, so there's not only artificially decreased supply, but
also artificially decreased demand.

there's been extensive comparative research into taxi regulation for decades.
the reason SF is so much worse even than other cities that restrict the amount
of cabs, is that SF doesn't only regulate street pick-up but also dispatch.

google scholar is full of papers on taxi regulation research, and there's
<http://www.schallerconsult.com/taxi/> and other pages.

unsurprisingly deregulation is in the interest of the drivers because a
competitive market increases customer demand. would you sometimes pay double
the fare if you could get a cab _right now_, instead of waiting 25 minutes and
praying? hell yeah, if only they let you!

let's hope uber can make on-demand transportation in SF usable again.

~~~
seldo
This is funny, because having lived in London it's SO much easier to catch
cabs here, I assumed SF was pretty good about taxi regulation.

You have not experienced unavailable taxis until you have lived in London,
where outside of the city center they literally do not operate.

~~~
enki
in vienna, which usually is the worst regulation hell, i could get a cab
anywhere in the city within 4 minutes, any hour of any day. and that's a city
with 1.75 times the population of SF (not including all the people who commute
to SF to work there.

this has been extensively studied. taxi service quality is essentially
dependent only on regulation quality (with some delay as customers get used to
the fact that they can actually get a cab)

------
risotto
Who actually uses UberCab?

Taxi Magic is a fantastic app that's totally legit. Open the app, use your
location to book a cab and within 5 minutes it's there. It's Luxor Cabs who
are fully licensed and use computerized dispatch.

I tried UberCab once and it was a nicer car but the experience was no better
than Taxi Magic, and significantly more expensive to get around town.

I hate non-metered cabs. Taxis are one place where regulation is good. We all
know what it's like to deal with a shady taxi driver. The tendency is to gouge
vulnerable travelers, not to set lower prices. The consistency that regulation
offers is the most important.

I also can't believe the complaints about the taxis in SF. The cab companies
are downright excellent when you actually call, and plentiful on the streets.

~~~
daveman692
I used to be a huge fan of Taxi Magic but the past few months have found it
less and less reliable. Basically if the cab is over .2 miles away it will
pick up a fare on the street instead. When UberCab tells me that a car is
coming, I can trust that it will actually come.

------
rubinelli
Am I the only one who finds it naive to name a startup UberCAB and then act as
if it had nothing to do with taxi dispatching services? It's as if the PayPal
founders decided to call it "UberBank."

~~~
jambo
It might not be seen this way in general, which goes to the PR problem another
poster mentioned, but my perception is that when someone markets something as
über-, they mean it transcends or supersedes what they're prefixing. So not
"cabs" but "better than cabs".

------
whakojacko
"Taxi dispatchers make money on tips. Ubercab threatens dispatchers’ way of
earning a living. Limos have to prebook an hour in advance, only licensed
taxis can pick someone up right away by San Francisco law, yet Ubercab picks
people up right away, yet doesn’t have a taxi license." Not like you can get a
taxi in under an hour in SF anyways ;)

Seriously, this just validates their model and I hope they can figure this
out.

------
johnglasgow
Three points:

1\. Sounds like UberCab should look into licensing out their platform to
existing cab companies. It would mean lower margins, but they can quickly
scale throughout the US and beyond much faster.

2\. UberCab's blog post is arrogant. Did they really think they can avoid
paying expensive licensing fees because they are using black cars instead of
yellow cabs? Taxi licenses are very expensive and a lucrative revenue source
for every major city. A taxi seat can cost as much as 1 million to purchase in
NYC, and I know other cities such as SF and LV are not much cheaper due to the
fixed number of licenses. I can only imagine the outrage of other cab drivers
losing work to cheaper services (i.e. UberCab) because they are not paying
licensing fees.

3\. UberCab can easily recover albeit at lower margins. They need aggressive
biz dev to quickly secure licenses. I hope they can continue to disrupt city
transportation.

------
tswicegood
I'm putting money on UberCab becoming a members-only service/co-op type system
where you have to be a member in order to request a car. I'm not intimately
familiar with the taxi laws, but I bet they don't specify what private
organizations can do.

~~~
llimllib
> I'm not intimately familiar with the taxi laws, but I bet they don't specify
> what private organizations can do.

Huh? They have to. They don't let private limo organizations pick you up
without a 1-hour reservation, for example, as stated in the article.

Furthermore, Ubercab already is a private organization.

I'm sure I'm missing something, can you explain why it would somehow become
legal if it was a members-only organization?

~~~
gravesryan
The regulations read that a livery services ride must be "pre-arranged".

We've not seen the hour prior requirement in any law. If it does exist please
send it our way, (info@ubercab.com) but we believe that this is opinion not
fact.

~~~
anigbrowl
I think you should post the C&D order, actually, so as to put the focus on the
MTA rather than wasting your time fending off uninformed speculation.

It looks to me as if the $5,000/day fine they're speaking of refers to a
modification of the Transportation code creating (among other things) a new
offense of 'running a dispatch service without a permit,' which was passed by
the SFMTA baord just last Tuesday - although it's still questionable whether
or not it would apply to your firm.

Regardless, it has not yet been made law by the Board of Supervisors, nor is
it on their legislative agenda for next week's meeting. From what I can see,
it can takes months for something to work its way up the Supervisors'
calendar. Of course, a lot depends on what sort of lobbying power the Taxi
establishment has at City Hall, but it's fair to assume they have years of
experience in working the system.

[http://www.sfmta.com/cms/cmta/documents/10-19-10calendaritem...](http://www.sfmta.com/cms/cmta/documents/10-19-10calendaritemsredline.pdf)

IANAL, mind; just my personal views. I've developed an unhealthy interest in
the (dys)function of my local government.

------
makmanalp
>> Ubercab operates much like a cab company but does not have a taxi license.

^ Why is the taxi license process so difficult to go through? Why does it take
10 years or so?

>> Limos in U.S. cities usually have to prebook an hour in advance, by law,
while only licensed taxis can pick someone up right away but Ubercab picks
people up right away (again without a taxi license).

^What is this but protecting special interests? Viva creative destruction.

------
rdl
I think UberCab will end up needing to change their name (UberCar?) to
distance themselves from the "cab" or "taxi" connotation, and position
themselves as an alternative to cabs, vs. a kind of cab, more forcefully.

Other than that, I think they now have the moral justification to trash the
taxi industry and cartel in their marketing. This can probably end up being a
net win for them.

------
callmeed
So is ubercab connecting people with "car services" that aren't licensed taxi
companies?

Are these the drivers you see often in NYC when arriving at the airport? My
understanding is that there are risks to using such services (like if you
leave something in the vehicle you're unlikely to recover it whereas a taxi
co. can usually track it down). True?

~~~
jon_dahl
I think it's four or five steps up from the rogue drivers at NYC airports. The
drivers are licensed limo drivers, and everything is official/on-the-books.

------
forensic
ubercab could relocate their business to russia.

SF customers and drivers could still pay for the app.

let's see them regulate that

I want to make a taxi dispatcher that is outsourced to an Indian call centre.
These dispatchers don't realize how deeply obsolete they are.

~~~
ceejayoz
> let's see them regulate that

Regulating the dispatchers would be difficult, but they could easily go after
the owner/operators of the cars involved in actually transporting folks.

~~~
forensic
What if they decentralize it even more?

I'm imagining regular drivers (like me) being txt'd when there is a nearby
person who wants a ride.

Like hitchhiking but using GPS and money.

The hitchhiker would specify his destination and how much he is willing to
pay. The software would know my location as well as destination (optional) and
notify me when I'm near him.

Make everyone into a taxi driver.

For added value you could also give individuals special badges and such that
certify their driving credentials, and let the buyers decide how much their
driving credentials are worth.

Credentials could be on a graded scale: \- Confirmed driver's license \-
Confirmed professional driving certification

Naturally you'd have a reputation system where passengers can rate the quality
of the drivers, and drivers could respond to the criticisms.

Decentralized taxi service. The biggest hurdle is reaching critical mass of
users, which UberCab has achieved. I want to see them destroy the conventional
taxi industry (disruptive technology makes me tingle)

~~~
evgen
Imagine you get a text from a person who wants a ride. You pick them up,
arrange a fee, deliver them to the destination, accept the money, and then get
arrested for being an unlicensed cab operator. How many arrests would it take
before your services is a dim memory? How long would it take if the law was
modified slightly so that the car used in the "criminal enterprise" was
impounded as evidence until the case was dealt with by the court?

The risk is entirely upon the driver, who, by the way the service is
structured, must risk a large chunk of capital (their car) just to
participate.

~~~
forensic
The point is that there are so many legal grey areas.

Is car pooling now a taxi service, because I pay the driver?

At which point is it illegal for me to give someone a ride?

What if they give me services instead of cash, like an hour of web design?

What if they give me virtual tokens/karma instead?

What if the transportation didn't take place strictly in the city but was half
in the city and half outside?

Are you really running a taxi service by giving ONE PERSON a lift, or does it
have to be several? Does it have to be publicly advertised?

------
joshstrike
I actually had this idea when I had dropped out of web design and became a
taxi driver for a few years in 2001. It's a natural. However: "Taxi
dispatchers make money on tips..." is an incorrect statement. Taxi dispatchers
make money on BRIBES. Drivers do not tip out dispatchers. Nor do drivers' tips
go to the company. What dispatchers euphemistically refer to as "tips" are
actually bribes paid to them by some cab drivers to refer the best fares to
those drivers - usually at the expense of the passenger, who has to wait
outside longer for their cab because a closer driver was not dispatched. The
exact reason why UberCab or similar services ARE such a good idea is that they
can improve the customer experience by cutting out dispatcher corruption.

