
How Uber Takes Over a City - apaprocki
http://www.bloomberg.com/news/features/2015-06-23/this-is-how-uber-takes-over-a-city
======
glup
_Portland had just become the first city to explicitly allow short-term
rentals through Airbnb and other sites, and welcoming Uber could help build
the city’s sharing-economy brand, a logical extension of its communitarian
roots._

"Sharing economy" is by no means "an extension of communitarian roots".
Communitarian is where the utility you derive is in part a function of the
utility derived by others in your community. The "sharing" economy is where
companies provide a service so you can buy or sell things (your house, car,
time etc.) to others in your community. See the difference?

~~~
joelhaus
In theory, the traditional model, which might include a hotel chain in the
transaction, would funnel a greater percentage of funds away from the local
economy. Under the "sharing-economy" model, more of the funds exchanged in the
transaction stay local.

~~~
frostmatthew
> In theory, the traditional model, which might include a hotel chain in the
> transaction, would funnel a greater percentage of funds away from the local
> economy

Do we actually care about the _percentage_? If you spend $100 on Airbnb and
most of that ends up in the local economy that's a lesser local impact than if
you spend $250 at a hotel, even if only half of that stays in the local
economy.

~~~
codyb
But at $100 dollars a night a tremendous amount of people more can afford to
stay maybe edging out the hotel if there's enough availability on AirBnB.

I'd also say, yes, the _percentage_ is important in general.

~~~
frostmatthew
> But at $100 dollars a night a tremendous amount of people more can afford to
> stay

That's irrelevant to the comment I was responding to, which was suggesting a
transaction with a hotel chain "would funnel a greater percentage of funds
away from the local economy" (despite its lack of relevance to the per-
transaction discussion you do bring up a valid point which further shows we
don't care about the percentage).

> I'd also say, yes, the percentage is important in general.

Why? If more money spent within an economy is beneficial to the economy then
you want to maximize the _amount_ of money spent within that economy.

Imagine a hypothetical economy of one person, you. Would you rather have a
million dollars taxed at 50% or $100,000 taxed at 5%? Even though the
_percent_ you end up with is less you're still going to choose the million
because $500,000 is more than $95,000.

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hackuser
Their 'investment' in political influence is amazing:

 _It has 250 lobbyists and 29 lobbying firms registered in capitols around the
nation, at least a third more than Wal-Mart Stores. That doesn’t count
municipal lobbyists. In Portland, the 28th-largest city in the U.S., 10 people
would ultimately register to lobby on Uber’s behalf. They’d become a constant
force in City Hall. City officials say they’d never seen anything on this
scale._

I suspected politicians were responding to something besides the appeal of
easy-to-get rides. What I've seen from local politicians was hard to explain
otherwise.

~~~
emodendroket
It's also amazing how many (presumably unpaid) cheerleaders they have to flood
the comments of every discussion about them.

~~~
sremani
It is easy to cheer for Uber because they are not running over puppies or snow
bunnies, they are dismantling the medallion mafia, unworthy of legal
protections. So Yes, I cheer for Uber and its Ayn Randian CEO.

~~~
JonnieCache
_> dismantling the medallion mafia_

Is that really a thing outside of NYC? Pretty sure it isn't.

~~~
rconti
Literally medallions and literally the mafia? Not as far as I know. But most
cities restrict supply of taxis to keep prices high and fix prices as the
behest of the taxi industry -- in addition to all of the other fun things the
taxi lobby does.

When Seattle built the Link light rail system, it stopped 1 mile shy of the
airport because the taxi drivers didn't want the competition. Fortunately
public outcry shut that down, but it's pretty rare that the general public
gets upset enough about an issue to overcome the power of a specific interest
group (yes, this includes Uber as well!)

There's plenty of literature to explain why price fixing and limiting
supply/licensure is bad. There's no competition, no incentive to improve or
provide a premium service. There's no reason to provide service in far-out
areas where it might be hard to find a return fare. There's no reason to
provide service in less "desirable" (read: minority) areas.

Of course, there are problems with the Uber model, too: Surge pricing being
one of them. Some people think it's gouging, some think it's the right
solution to provide supply for excess demand.

~~~
hoopd
> most cities restrict supply of taxis to keep prices high and fix prices as
> the behest of the taxi industry

Why is it always left out that a limited number of taxis is good for society
as well? Taxis operate on public roads, pollute public air, cause traffic
congestion the public must deal with, cause car accidents and hit pedestrians.
When you're not catching a ride taxis (and Ubers) are a nuisance and society
has decided to limit their negative side effects.

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aikah
Nothing new here. Lobbying is just legalized corruption. Lobbying works if you
put enough money in lobbying politicians and since Uber is mostly popular...
There is no way around it, the taxi industry as we know it will vanished. But
I don't really want Uber to be the 'new boss'...

~~~
hackuser
It could set a bad precendent for others: Those with enough money can ignore
the law and buy the market.

~~~
xacaxulu
Yes, that precedent has been set since.....the beginning of time.

~~~
emodendroket
Well, it's fun to be cynical and everything, but the FDA, EPA, and so on came
into existence over the objections of the industries they regulate.

~~~
angersock
And now they're some of the FDA's biggest employers!

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nugget
It's interesting that Lyft seems to be able to hypermile behind Uber and
benefit from the lobbying without having to spend any money. Google and others
who eventually deploy self driving car fleets will benefit as well.

~~~
kuschku
Which still doesn’t solve the actual issue: affordable public transport.

Especially in cities taxis are just inefficient. They use over 10 times as
much space as a similar amount of busses, and produce a lot more emissions per
passenger, too.

Self driving car fleets for rent or taxis are good for rarely used routes, or
for city - region transport, but inside a city taxis should be mostly replaced
with proper subway and bus systems.

~~~
nugget
How low would a self driving 2 seater smart car have to drop in cost before
you would view it as an acceptable replacement to public transportation in
cities without strong existing subway routes? I think the costs will be
surprisingly low, and the infrastructure (roads) already exists from door to
door. No matter what, self driving cars will siphon off some percentage of
riders from public transport options, increasing the need for ever more
expensive subsidies.

~~~
kuschku
Why do roads exist from door to door?

Especially in european cities with a historic core, this is just not the case
- even in my city, it's common knowledge to NEVER take a car into the city, as
the roads are just always fully congested.

Public Transport is the only long term solution. Especially when one takes the
cost for building roads into account. And if one considers that with public
transport 100% of the fare goes back into the infrastructure, while with self-
driving cars operated by for-profit businesses most of your fare ends up in
the pockets of a rich investor overseas. Which is just not desireable.

~~~
goldfeld
You might be wrong even for a planned city: individual cars are convenient,
fast and safer than public transport (picture women and minorities who get
harassed--human drivers are going away fast and people's bigotry are not).
Experts reckon self-driving traffic will reduce cars on the road by an order
of magnitude, so that we'll only need 5% of current cars to provide pinpoint,
individual and mostly immediate service to everyone. 30% of all traffic is
caused by parking alone. It really seems like small electric two-seater cars
(whatever form they take) are the future. That most cities are already
prepared in terms of roads is icing on the cake.

That said, if it happens, these self-driving cars should BECOME public
transport, a common good, of course. Not some corporation's private automaton
army of money-printing cars, even though Uber really is helping speed up the
whole transition. I think Europe and perhaps Latin America will have better
luck escaping Uber's monopoly claws and bringing service into the commons.

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wahsd
It drives me nuts to see the manic crowds come to the defense of Goliath.
Sure, taxi's suck ass in many cities and I really like the accountable based
system of Uber and their high standards, but that is no justification for
essentially handing over a whole market segment to a single monopolist.

What an age we are living through, where all the valued and ideals of
competition aren't even given lip service anymore and all of society goes all
in on monopolies. Because what can go wrong when monopolies reach the phase
where they turn all those lobbyists from market capture goals to regulatory
capture goals to lock out any competition in an inherently low barrier to
entry industry? Nothing can go wrong, right?

~~~
dylanjermiah
There will always be alternatives to Uber. Uber is at it's core
transportation. It competes on price and quality in more arenas than 'ride
sharing'.

In regards to your monopoly point. There are very few, of any, natural
monopolies. Ones which occur in a real free market.

------
adventured
"City-level battles can be costly, too. Last year, Uber put more than $600,000
into a voter referendum in Seattle and spent $314,000 lobbying in Washington,
D.C."

That is not costly. Uber has raised $6 billion in capital, and is presently
working on a $2 billion line of credit. Half a million dollars per major
metro, would be trivial - but it won't be necessary, for every Portland, there
are a dozen smaller cities that will just fall in line.

------
venomsnake
> But as Portland would learn, a city of 600,000 can play tough with a $40
> billion company, particularly one that is used to getting its way, for only
> so long.

Terrifying ...

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melvinmt
We will not have to wait long until Uber lobbies for "Uber medaillons", the
equivalent of the (once) powerful taxi lobby shutting down other competitors.

~~~
prostoalex
They do raise the prices in the markets that are not competitive
[http://ridesharedashboard.com/2015/03/19/uber-for-the-
first-...](http://ridesharedashboard.com/2015/03/19/uber-for-the-first-time-
increases-fares-in-nine-cities/)

------
davidf18
The reason why Uber and Airbnb are able to succeed, at least in NYC (and
perhaps SF, ....) is the use of politics to create artificial scarcity ("rent
seeking"). In NYC there is an artificial limit on Taxi Medallions so that a
medallion until recently could cost $1 million. Housing and hotel costs are so
high because of zoning laws that have unrealistic and artificial housing
density restrictions, thus increasing the cost of land, thus increasing the
cost of housing and office space.

Harvard Economist Edward Glaeser (cited by Nobelist Paul Krugman and others)
wrote this: (Build Big Bill)

[http://www.nydailynews.com/opinion/build-big-bill-
article-1....](http://www.nydailynews.com/opinion/build-big-bill-
article-1.1913739)

Thus, Uber and Airbnb owe much of their success to addressing market
inefficiencies, "rent seeking" introduced by bad laws which serve special
interests at the cost to people who take taxis, rent and buy apartments, and
rent office space.

------
astaroth360
Lol, I like the sharing economy as much as the next person, but it's a pretty
ludicrous name for itself. There's not really any sharing to be found here,
just buying and selling.

Once the companies involved start being more reasonable with paying taxes and
employees instead of trying to essentially skirt the law and be irresponsible
corporate citizens, they'll be a great addition to our economy. As of right
now, they just make a lot of money for a few people at the expense of the rest
just like any other Mega-Corp would.

I like to think the tech community tries to make the world better rather than
just scrounge for cash, but maybe I'm too much of an idealist.

------
smutticus
Why does every article about Portland make it into some magical incredibly
different place. Does water not run downhill in Portland, OR?

I spend a fair amount of time in Portland and it's incredibly similar to most
American cities. All this exceptionalist serves only to stroke egos and
generate clicks.

------
rayiner
Uber is a great example of why lobbying can be a good thing. Taxi regulations
date back to the days of horse-drawn carriages. That does not by itself make
them obsolete, but at the time taxi regulations took their modern form, cities
(especially on the east coast) were more densely populated, cars were much
more polluting, and there was little that would allow disseminating
information about the quality of taxi service among consumers. In short: the
externalities and information asymmetries that justified taxi regulation in
the first place have declined substantially.

Lobbyists are well-positioned to inform legislators about how the market is
different today, and why the animating purposes of taxi regulations may no
longer be applicable, or at least may not have the same force they used to.

~~~
hoopd
Spoken like a lobbyist.

Government administers regulations on behalf of the people. If they're failing
to do so then the political process is broken. Lobbyists do not fix broken
political processes.

> Uber had been working on the council members for months. “They kinda run
> this,” Alpert said in February. “I keep feeling they will just wear you
> down. If we end up in court, we will have to lose just based on resources.”

This doesn't sound like they're simply informing legislators of new
information nor does it sound like the legislators had the resources or the
time to do anything but roll over.

~~~
rayiner
I'm not a lobbyist, though my wife used to be. She lobbied on behalf of a
construction trade organization. 98% of her work involved telling legislators
about the benefits of integrating design and build phases of construction
(instead of hiring a separate architect and contractor and doing design and
build in separate phases).

Lobbying is a way of structuring administration of regulation that shifts
responsibility from unelected bureaucrats to people. Do you think politicians
should be sitting around reading papers about the reputation economy and
thinking about where those ideas can be applied? It would be intractable and a
huge waste of time considering the vast universe of concerns involved. And
it's not like ordinary citizens are clamoring writing letters about how the
reputation economy enabled by smart phones makes certain taxi regulations
obsolete. It's far better for lobbyists to do the relevant work and tell
politicians what they should fix and why.

~~~
jmngomes
"Lobbying is a way of structuring administration of regulation that shifts
responsibility from unelected bureaucrats to people"

Or does it "shift responsibility from unelected bureaucrats to" corporations
looking to maximize their financial benefits, regardless of its impact on
society?

