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Uber Boston Has Been Served (uber.com)
158 points by sudonim on Aug 14, 2012 | hide | past | web | favorite | 133 comments

Two tickets were apparently issued:

(i) For operating an unlicensed livery service

(ii) For using a non-approved mechanism for metering the ride

The C&D at issue here covers (ii). At its heart, the complaint is that Boston has standardized on a way of metering passengers, and Uber has replaced that standard with GPS. Presumably, cab drivers in Boston could not simply choose to replace their meters with GPS monitors, and thus, says Cambridge, neither should Uber.

(I might be wrong, that's just my read of the complaint).

I'm torn. Uber is pretty neat. Some (maybe most) of cab regulation is rent seeking. But not all of it is. Municipalities should find a way to make Uber lawful, but I'm not sure Uber should be able to make that happen by fiat.

I'm torn too, but the meter thing is a very sensible point. Taxi meters in NYC (the only market I have experience with) are basically entirely locked boxes- the drivers can't do anything beyond poke the buttons on the front. This is, of course, very sensible- otherwise there's a danger of unscrupulous drivers modifying their meters to charge passengers more. This is only the case for yellow cabs in NYC, though- I'm surprised that Boston expands the principle to private car services.

A lot of government regulation is bad, but not all of it is. AirBnB and hotel regulation is another example of this.

I agree that the metering complaint is valid - I suspect it may be possible to create a nefarious drop-in replacement Uber Driver app which reports longer rides. The only location / metering source Uber has the iOS app and there's no additional hardware or software protection on the driver's Uber iPhone beyond the standard OS protections, which are easily circumvented by a jailbreak.

In contrast, real taxi meters provide no software access beyond a few defined interactions and limited and intentionally obvious physical access (start/stop meter) only, and the hardware is built to be relatively secure from tampering.

Uber could use the rider's app as a verification of distance, but as there's currently no incentive for users to keep the Uber app open while they ride, I suspect this method wouldn't work right now.

I like the idea of Uber, but, like Square, I think it's only a matter of time before a nefarious party exploits the easy availability and comparative insecurity of smartphone hardware to scam someone and disrupt a new smartphone-based industry.

> The only location / metering source Uber has the iOS app and there's no additional hardware or software protection on the driver's Uber iPhone beyond the standard OS protections, which are easily circumvented by a jailbreak.

It would be hardly difficult to verify metered distance via Google Maps or one of many other mapping type apps on the iPhone. There's about a million of them.

It shouldn't be our burden to be verify the accuracy or integrity of cab meters, gas pumps, or deli scales. When's the last time you brought your own jug or scale? Common consumer protections like these are what the government should be doing on our behalf. I think there's a clear case for why cabs should be subject to such inspections, and gives us the confidence to jump into any cab. Given the nature of Uber, whether or not Uber needs to fall under the same rules is less clear.

Exactly. And as the trusted middleman, Uber has every commercial incentive to spot check its drivers.

you get a map of your ride with your receipt. one time i submitted feedback when the driver went the long way, which it clearly showed on my map, and uber refunded me for the entire ride. it is an excellent service. i use it all the time in sf.

As the company that gets paid more the farther you go, Uber also has a rather different commercial incentive...

Although Uber would probably prefer that someone rides with them again and tells their friends/family about their pleasant experience, rather than squeeze a rider for a few more pennies. Their helpful community managers and system for doing a fare review certainly give the impression that they are looking at building a long term business. As a pre-IPO startup facing regulatory issues in a number of cities, they really don't have the luxury of offering a bad customer experience. The alternative is also simple, if someone has a bad experience, they don't have to use the service anymore.

There is zero guarantee that the route you took is the route Google Maps would give you, though. And the time estimates are way off in many major cities.

I got an email showing the route superimposed on a map. The picture I saw was almost an exactly straight line from pickup to dropoff.

If the driver was cheating, then the email would show the wrong route and it would be obvious to me: "hey, I wasn't picked up there" or "that's an inefficient route". I suppose the driver could cheat by small amounts with the duration, but that would be a pretty dangerous game to play because it's so easy to be caught (the exact pickup and duration are also reported) and relatively hard to do (if you hack your phone, it's kind of hard to just say you made a mistake).

If uber was cheating, perhaps it would be more subtle, but it's still verifiable. They'd have to show you a 5 mile route and then say it was 7 miles or something. The danger of being caught for that is way too high to be worth it.

I am more concerned with taxis, honestly. They can take you for a long ride and it's hard for you to tell them otherwise. If you do they can claim "oh, there was construction over there" or "oh, I thought you said XYZ lane not XYZ street". Or, if you ask to be taken to a train station, they can pressure you to take the taxi to your final destination rather than the train (which can be quite intimidating in some circumstances).

"I suspect it may be possible to create a nefarious drop-in replacement Uber Driver app which reports longer rides."

If you take an uber ride, you receive an email receipt (which you can see on the website too). It shows you exact pickup time, exact duration, total charged, and the route superimposed on a map.

If you think something is awry, they offer a button to request a "fare review".

It's hard for me to imagine how either the driver or uber could cheat the system without a high risk of being caught (way too high to be worth it).

I am more concerned about various bad practices by taxis than uber.

About taxi meters: from my experience, the mileage may be fixed, but it always seems that the cab driver is able to press something/manipulate the box somehow when they need to add additional fees (in Boston, specifically, in fact).

For instance, when I get picked up at many airports the cab driver adds some additional fee (usually between $3 and $8). For all I know, they're just making this number up - how would I know what the toll at the airport exit costs?

Also, many cabs have a list of flat rates for common routes (from Hotel X to airport - $35, etc.) It seems that in these cases it would be independent of whatever the meter says.

I guess these things make it seem questionable to me how much regulations on metering can actually matter. Is it just a matter of "if we catch you doing this (ie. someone reports questionable activity), we're going to revoke your license"?

Cabs are generally required to have fare schedules including fees clearly visible to the rider, to prevent just this sort of scam.

Even if the user doesn't know the actual airport fare and the cabbie manages to scam a few riders unfamiliar with the true fare schedule, a tampered-with giant human-readable fare schedule is pretty easy for an inspector or frequent rider to detect and report.

Plus, as the user pays the cab driver on the way out, there's an opportunity for the user to review the charge and reject payment if the driver is scamming them.

With Uber, the payment takes place later and an e-mail receipt is sent, and the fares are seemingly intentionally obfuscated (see: the controversy about displaying peak v. off-peak pricing as a multiplier rather than a dollar amount). Hence, a driver using a malicious Uber Driver app to report a few more blocks travelled on each trip is much less likely to be detected than a cabbie physically and obviously entering additional fees. I suspect Uber would find it difficult to prove that the driver's (fake) extra mileage wasn't actually rider-requested or an attempt to circumvent traffic - and I also suspect most riders won't notice.

Regular cabbies try the obvious, physical "take the long way" scam often enough that I suspect a hard-to-track digital form of the same idea isn't far off.

> With Uber, the payment takes place later and an e-mail receipt is sent, and the fares are seemingly intentionally obfuscated (see: the controversy about displaying peak v. off-peak pricing as a multiplier rather than a dollar amount). Hence, a driver using a malicious Uber Driver app to report a few more blocks travelled on each trip is much less likely to be detected than a cabbie physically and obviously entering additional fees. I suspect Uber would find it difficult to prove that the driver's (fake) extra mileage wasn't actually rider-requested or an attempt to circumvent traffic - and I also suspect most riders won't notice.

Au contraire, Uber provides you a much easier way to audit your ride, a detailed email receipt seconds after you leave the cab with a map, origin and destination addresses, breakdown of your fare, how it was paid, and a customer service email address. On your phone, you also get a couple survey questions about the ride (how was the car, driver, etc.) too.


I haven't had to deal with them (Miami doesn't have Uber yet :( ) but I suspect that their customer service is more interested in customer happiness than pinching pennies. Since it's paid with a credit card, even if their customer support process breaks down, you still have a powerful recourse.

I'm unlikely to be able to identify a discrepancy on a map in an unfamiliar place - but the map-in-email feature does bring Uber much closer to a regulated cab meter, especially since it can be reviewed by a more knowledgeable person later.

It still doesn't match the "system audited by a supposedly independent government inspector" aspect of a regulated cab meter (i.e. to prevent Uber from using fake distance calculations), but Uber being dishonest is a lot less likely than a shady cab company, so I guess that's less of a concern.

I personally never used the map as my only Uber trips have been flat-rate (SFO to Palo Alto, where Uber is actually cheaper than a cab in some circumstances).

> I'm unlikely to be able to identify a discrepancy on a map in an unfamiliar place - but the map-in-email feature does bring Uber much closer to a regulated cab meter, especially since it can be reviewed by a more knowledgeable person later.

I suspect that the routing features in "Google Maps" would be useful.

I emailed their customer service about a minor issue (more of a feature request really), and got back a response within hours which included a credit to my account. I hadn't asked for- or felt I deserved- a penny, but apparently their customer service people did.

With Uber you get an actual map of the route taken on your receipt, so it seems like a driver trying to pull a scam would be quickly discovered.

Slightly off topic, but worth noting: In Boston, the fees coming from the airport are insanely regulated...to be very expensive. But always the same amount of expensive. There's no funny business there (I think).

The fees look like they come out of nowhere because no cabbie ever explains them...but they don't explain them in large part because they're simply unavoidable. Making it more confusing is the fact that this fee (on the order of $8) is only levied on taxis going out of the airport, not into the airport. Finally, these fees are new, only from within the past few years - so if you've been traveling to Boston recently, you might have noticed a sudden fare increase without knowing why.

Why all of this nonsense with crazy high, one way airport fees? To pay for the Big Dig, of course. (Which, incidentally, made my taxi rides home shorter to the point that my fares dropped more than the price of the fee.)

At least in Boston, there is a strict rule about having a fixed cost for rides from/to the airport. Cabs aren't allowed to deviate from the posted rates for those.

It's not that surprising to regulate a private company like that. When you go to the grocery store or the gas station, the scale or pump has a green sticker on it saying that it was verified by the Department of Weights and Measures, along with a number to call if the device didn't start at zero.

That said, regulating a company is very different from issuing a cease-and-desist (which in fact does nothing but ensure that you cannot regulate them!)

No. If you were operating a gas station with pumps lacking those calibration stickers, you'd get a cease-and-desist. That's the very mechanism implementing regulation of companies.

Had to look up "rent seeking", I'm sure I'm not the only one

In economics, rent-seeking is an attempt to obtain economic rent by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth, for example, spending money on political lobbying in order to be given a share of wealth that has already been created. A famous example of rent-seeking is the limiting of access to lucrative occupations, as by medieval guilds or modern state certifications and licensures. People accused of rent seeking typically argue that they are indeed creating new wealth (or preventing the reduction of old wealth) by improving quality controls, guaranteeing that charlatans do not prey on a gullible public, and preventing bubbles.


You might also be interested in the concept of regulatory capture, which is kind of rent-seeking's opposite (IANAE). Say you have a company that provides web-security audits and you help press for a law requiring websites to have current security audits. Boom, guaranteed business.

The most ridiculous example of this that I've seen is that some states require a license for the practice of interior design. Louisiana comes to mind but I believe there are others. It's really an example of the phenomenon that a small group of dedicated individuals with a vested interest in an outcome are often able to overcome a much larger group that has a small, diffuse, or unknown interest in the opposite outcome. In the interior design case, if you're a person who hires an interior designer, you're probably not going to notice the extra $50-$100 it costs you (made up numbers) because of the licensing requirements - in fact you might not even know that the licensing requirement exists. But the people collecting that money certainly notice it when you multiply by the total number of customers. It's a legal way to do the Office Space trick of stealing a small amount from a large number of people.

This was in the NYTimes a few weeks ago: "So you think you can be a hair braider?" Not without two years of cosmetology school, which should set you back $16,000.


Nobody's arguing that people who perform a service shouldn't have an awareness of basic hygiene, and that could definitely be regulated... but requiring $16K up front is just rent-seeking.

Not to mention, these sorts of jobs have often been the first step that young people and immigrants take in their careers, and the whole reason is that it doesn't take any capital investment, although it needs a lot of labor and a reputation for skill. When someone adds an arbitrary financial hurdle to clear, it feels particularly unfair to me.

And in the age of Yelp / Google Places, there's a much better way to make sure the florist or what have you is good at their job, rather than taking a state-issued test.

The purpose of the education and testing requirement for cosmetologists and barbers is not an arbitrary financial hurdle; it is a legitimate safety function of the government.

These people will be using very sharp tools on your head. Tools which may draw blood, or worse. The education and testing requirement ensures that such people know how to safely use those tools across a wide variety of situations (i.e., requests), and can demonstrate that they are actually able to use those tools safely in such situations.

Should the schooling cost that much? No, and it usually doesn't unless you go with a private school. Smaller cosmetology schools cost in the neighborhood of a few hundred. Alternatively, if you feel strongly enough about this, you could open your own school. The primary expense is facilities (including equipment and supplies), since this type of education is experiential--you learn by doing, not by watching it or reading about it.

Nicely argued, but you are responding to a straw man position (that government has no role in regulating cosmetic services) nor did you read the article (which points out that licenses are cheaper in neighboring states, but not Utah.)

I'd categorize regulatory-capture more as a sibling to rent-seeking (rather than its opposite). Twisting regulatory processes to benefit larger incumbents is often the mechanism that is used to extract rents.

That example you gave is also an example of rent seeking.

IANAE indeed!

Regulatory capture is when you make it more difficult to work in your industry on purpose through regulation, in order to discourage competition.

For example, McDonald's could push for a law that would require anyone who wants to run a chain restaurant to post a $100 million bond. Sure, they have to put up the bond too, but they have plenty of money to do so. The burden would probably stop many new chains from ever getting started.

It is similar to rent seeking though.

I think that pretty much sums it up correctly. The City of Boston placed a sting operation on one of the Uber drivers in the issuance of ticket (i), where once they saw the driver had used an unauthorized meter, they made him pull over where a police officer was already waiting.

It's unfortunate that Boston has issued a cease and desist on the service though. I live in Boston, and Uber is great as it's almost impossible to find a cab at 4:00 in the morning after you work late, not to mention the fact that waiting around for one in sketchy neighborhoods is dangerous.

As always in situations like this, my thoughts are simultaneously on how awesome Uber is, and how not awesome every other service/scam that takes advantage of this flexibility might be.

It is very important that cities be able to provide visitors with a reliable way to get a ride from point A (usually: the airport) to point B (usually: the convention center hotel) at a predictable price.

Obviously, Uber doesn't prevent visitors from getting to the convention center directly; Uber isn't taking up spots at the cab stand at LGA. But if the "Uber way of doing business" effectively drives regulated cabs out of business, that's a problem.

Obviously, Uber doesn't prevent visitors from getting to the convention center directly; Uber isn't taking up spots at the cab stand at LGA. But if the "Uber way of doing business" effectively drives regulated cabs out of business, that's a problem.

I'm not clear on the "why" of your final sentence. Is it that no regulated cab companies could stay in business serving the airports? Or that Uber would eventually take over the airport traffic? Or that regulated cabs would be replaced by unregulated cabs at the airport?

As it stands, Uber seems to be supplying a market poorly served by extant firms.

It's not that Uber itself would muscle out regulated cabs, it's that other firms operating under the same rules Uber secured for itself could. Like most people I find Uber itself to be benign.

But if the "Uber way of doing business" effectively drives regulated cabs out of business, that's a problem.

It's not a "problem," it's "a sign that the State should get out of the business of regulating cabs."

I'm not sure this statement says anything; it's a rhetorical NOP. You'd want to accompany it with the reason why municipalities could be assured that visitors would have a reliable way to get a ride from point A to point B in the absence of regulation.

You'd want to accompany it with the reason why municipalities could be assured that visitors would have a reliable way to get a ride from point A to point B in the absence of regulation.

How is it a proper role of municipal government to "(assure) that visitors would have a reliable way to get a ride from point A to point B"??? I reject the fundamental premise this is based on.

I mean, you have to consider the unintended consequences of (nominally well meaning) government regulation, like artificially limiting the supply of cabs, while simultaneously interfering with the ability of cab drivers to earn a decent wage. And one should ponder the possibility that there are other ways to protect consumers, outside of government regulation. Why can't there be a voluntary certification system for cabs, which a given cab company could choose to accept or reject... and, correspondingly, consumers could choose to either only take rides with "certified" cabs, or they could go all "caveat emptor" and take rides with non-sanctioned cabs.

The fact that people are already going outside "the system" is evidence that "the system" is not fulfilling the needs of the consumers.

The system clearly isn't fulfilling the needs of San Francisco consumers. But that doesn't logically imply that the only answer is to toss the regulations; instead, it could just mean that San Francisco needs to issue several hundred new medallions.

I'm not sure how simply certifying cabs overcomes information asymmetry here. The signal that competes with the certificate is "advertised price", but the whole point of cab regulations is ensuring that customers receive a predictable price and a safe, complete, timely carriage to their destination. Permission to solicit uncertified cab business seems like a license to prey on naive riders. It's clearly not in the state's interest for the market for transportation in the city to devolve that way.

>How is it a proper role of municipal government to "(assure) that visitors would have a reliable way to get a ride from point A to point B"??? I reject the fundamental premise this is based on.

It's a natural monopoly and a utility; just like water or electricity, it is both proper and better for the end user for it to be run by the government.

While Uber may be changing things, most of the literature that I am aware of in this area suggests that regulation of taxi services is necessary to get near a social optimum. It's also interesting to note that not all kinds of regulation are equally good -- e.g. some argue that controlling the number of medallions is less effective than controlling fares. This paper provides a good overview, I think:


Unfortunately, I can't find a free version -- sorry!

But if the "Uber way of doing business" effectively drives regulated cabs out of business, that's a problem.

A problem for whom?

Yes, it's a competitive problem for regulated cabs and their owners and operators. It's certainly not a problem for the customer who benefits from a greater number of options.

One could hope the regulated cab business would respond in a competitive manner - e.g. with greater accountability, ability to call a cab via app, GPS tracking, and other competitive innovations that Uber has introduced.

They already knew he had an "unauthorized meter". The sting was wholly unnecessary to learn anything.

It was purely the legal justification to slap on the C&D; they needed evidence in the court-admissible sense. But the idea that they "noticed" anything in the process is silly. It was all scripted from minute 1.

I was amazed by this sentence in the C&D:

"Massachusetts law does not sanction unapproved devices for use in commercial transactions."

Does that mean what I think it means? If I use an iPhone app to calculate the tax, and it's not approved, then I broke the law? Does this apply to Square, too? I thought that there was an English common law principle that "Everything which is not forbidden is allowed".

Most states have weights and measures departments that certify all of the tools used in commerce (scales, gas pumps, taxi meters, etc). These tools are very highly regulated -- often the internals are inspected by state officials, the devices are sealed, and operators are required to bring them back in for periodic re-testing. This may seem obstructionist, but it's based on a long history of dishonest merchants tampering with this type of equipment to defraud customers.

"Everything which is not forbidden is allowed".

Sure. Massachusetts forbids you from operating a commercial service that charges based on the readings of measuring equipment that does not meet the standards of the Department of Weights and Measures. Taxi meters do. Standard car odometers don't. You can calculate with an abacus or an Apple, but your market fruit scale has a seal indicating that it was inspected and passed.

Your gasoline is measured by pumps similarly inspected. The pump at the dairy that fills gallon jugs is inspected. You can pay with barter, coins or large stones, as long as the negotiation is acceptable to both parties -- and when you pay for eight pounds of foie gras, you'd better be getting it weighed from an inspected scale.

OK, but how does MA decide which equipment is considered a measuring device used for trade? Are grocer's scales and gas pump meters a special case that's explicitly regulated, or is anything that (a) takes a measurement while (b) in the path of a transaction regulated?

My supermarket sells cheddar for $8/pound. When they take some cheese and price it, the scale that decides it's 8 oz of cheese is a regulated scale.

But my co-worker's friend sells D&D dice for $5/cupful. Is that cup a measuring device that would technically need to be certified by DWM for trade use?

And if not, what is the bright-line test for whether the Uber app is a cup or a scale?

I think there's some interesting sociology / anthropology tied up in this.

Reading through the MA regs, it looks like they primarily regulate:

-- Scales of all kinds -- Volumetric measurements for petroleum products and dairy products -- Taxi meters -- other commerce tools (grocery store scanners, change machines, bottle/can refund machines, etc)

It's a truism that weight is a much more accurate way to specify products than volume, which is why even liquids like self-serve soup at the grocery store are sold by mass, not volume.

However, we are historically used to buying gasoline, milk and ice cream by the gallon or liter, not the pound or kilo. It's also interesting that milk and ice cream are the fluids mentioned besides petroleum products in the state code -- we give dairy products a very special place in our culture. In Massachusetts, a 1967 law actually makes it illegal for stores to give away free milk!

The dice are possibly outside the purview of the MA Board of Commercial Tariffs and Sales, or whatever the heck it's called, which likely has a long list of all the products it cares about and the correct way for a merchant to measure them. If you were selling the dice by weight, you may in fact need to buy an approved scale and have it inspected periodically to comply with the law.

Verizon sells me internet access with different prices for different speeds. I would like to know how those speeds are measured and with what kind of device: theoretical max? average for one minute? average for 5 minutes?

It seems they're referring specifically to measurement systems, as in a taxi service. The preceding sentence in the ruling is:

"The major problem at this time is the fact that there are no established measurement standards for its current application and use in determining transportation costs similar to that of approved measurement systems for taximeters and odometers."

No, I don't think that's what they mean. They're referring to meters.

Except Uber isn't a cab, it's a private car service, which is generally less regulated. Rates for private car services are generally negotiated between the driver and passenger, and if both parties agree to use Uber's GPS-based software, I don't see what Massachusetts's problem is.

The argument they are making is that both parties are agreeing to traveling a certain distance for a certain price. But the tool which measures the distance must be an approved measurement device in order to prevent fraud.

I can agree to pay my super market a dollar for a pound of apples, but the dept. of weights and measures still validates the scale. That's the consumer protection that the state is arguing for.

Note the whole is it a cab or isn't it argument isn't actually germaine to this complaint (they actually dropped the unlicensed livery service complaint) its wholly based on the legitimacy of the measuring device

If Uber were using flat rates, this problem wouldn't exist. But Uber is actually selling miles-in-a-cab, and the government is rightfully pointing out that due to a very extensive history of businesses manipulating weights and measures to increase profits, the measuring device used to measure miles-in-a-cab ought to be one that has been inspected by the government.

More importantly, Uber is neither a cab NOR a private car service.

It's a communications network that links private car services with people who want to get a ride from the private car service.

Given that they handle payments, its considerably more than a communication network.

True - it's a marketplace, eBay for livery services.

By that definition, no cab companies are cabs, since that is exactly what the cab companies do--arrange trips between independently contracted cab drivers and potential customers.

Under the legal definition of cab services in many municipalities, Uber is a cab service rather than a livery service. In other municipalities, Uber is merely a livery service. In the U.S., each municipality gets to define what a cab service and a livery service are (because that is a local power under the federal system of government).

  Boston has standardized on a way of metering passengers
But more than a dozen other cities allow Uber to use their own way and the world hasn't ended.

Why should passengers care about what the city of Boston has "standardized" on? Why not just let passengers vote with their wallets? If Uber is too expensive or the drivers gain a reputation for ripping off customers, they'll just choose another cab. But the real problem is that Uber is actually too much better than the competition, which is why you see this kind of harassment occurring.

Regulation of this kind is about as corrupt an example of rent-seeking and resistance to technological innovation as you are likely to find in a lab. It's not a close call.

The small parts of the regulation that weren't rent-seeking -- a legitimate interest insuring a certain level of safety and responsibility, back when it was hard to hold bad-actors accountable -- have been made obsolete by mobile/reputation/marketplace technology.

Now, bad or inconsistent service can be made widely known almost instantly -- not just through Uber's own mechanisms, but also other review/complaint platforms.

The whole legacy regulatory architecture now can and should be discarded, replaced with a minimal kernel of regulations about clearly identifying a service provider and its terms, to enable the new market-oriented feedback mechanisms to work.

> The small parts of the regulation that weren't rent-seeking -- a legitimate interest insuring a certain level of safety and responsibility, back when it was hard to hold bad-actors accountable -- have been made obsolete by mobile/reputation/marketplace technology.

What? No they haven't. And it's still hard to hold bad actors accountable. Especially if you don't have the foresight to identify them perfectly.

> Now, bad or inconsistent service can be made widely known almost instantly -- not just through Uber's own mechanisms, but also other review/complaint platforms.

And there is moral hazard in every single company providing business reviews as its principle service.

> The whole legacy regulatory architecture now can and should be discarded, replaced with a minimal kernel of regulations about clearly identifying a service provider and its terms, to enable the new market-oriented feedback mechanisms to work.

Yeah, sure. The blind marketplace god will solve all our problems. OR powerful actors will rise up, quash competition and make things awful.

Seek a bit of fucking balance, man!

And it's still hard to hold bad actors accountable. Especially if you don't have the foresight to identify them perfectly.

In any system like Uber where dispatching, metering, and payment are all handled by devices, no foresight is required, and it is trivial to hold bad actors accountable. An untrackable actor can't even pick someone up, much less be paid.

There were informational problems which hindered market mechanisms from working, but those problems are now solved. The musty regulations, and the fears that drove them, are anarchronistic curiosities of a bygone era.

An untrackable actor can't pick someone up or be paid, but how hard is it for the actor to lie to the system? How hard is it for them to change their identity to the system? How hard is it for the counterparty to cause problems and how hard is it for him to change his identity?

And what if there are competitors to Uber? What if these competitors, as part of their attempt to get a wider car network refuse to rate those actors? Why would anyone want to be on the Uber network if they can get jobs on the other one? This isn't a static problem. There are a lot of dynamic variables in play and you're hoping that random action will lead to a steady state that is optimum for all the system participants.

But not all game systems work like that.

I'm not saying that Uber ought to be shut down outright. I just think it's ridiculous to assert that all regulation can be torn up just because certain metrics can be tracked.

It's harder for an actor to masquerade under an Uber-style system than traditional regulation. Every move is tracked, and customers could even get photographs of registered drivers via their own trusted channel -- as opposed to the easily-faked licensing documents carried by traditional cabs. (Big cities sometimes have 'gypsy cabs' whose markings and meters can be hard for even local police to distinguish from licensed cabs.)

And what if there are competitors? As long as all of them are branded, and can be reviewed on third-party sites, customers can decide whether they like the power of driver reviews, or some other mechanism for checking abuses.

You're right, it is dynamic. Who moves faster, an Uber-like enterprise or a decades-old insider-controlled city regulatory bureau? Which tends towards satisfying riders faster? There was a decade of complaints about how awful SF taxis were before Uber arrived... but the last-century regulatory assumptions protected incumbents from the pressure for change.

There were once upon a time conditions A, B, C that made it hard for customers to assess cab rates, routes, and reliability. Those specific factors led to regulations X, Y, Z.

But now for users of technology, conditions A, B, and C are gone. Anonymous pick-ups are precluded by design. Wild-goose routing to plump up fares or misleading riders about prevailing rates are both much harder... and even if you manage such a scam a little, there's no more disappearing into the night afterwards with your ill-gotten gains: there's an indelible reputational and transactional trail allowing redress. All the X, Y, Z regulations specifically created because of the 20th-century limitations are obsolete and should be nullified as soon as possible. You don't need to be brainstorming new 'what if' rationales for them, in advance of any extant problems.

I just think it's insane to say that there is one best meta-solution for all problems. I don't think regulation is the perfect response to every issue just as I don't think that the market is the perfect response.

It's harder for an actor to masquerade under an Uber-style system than traditional regulation. Every move is tracked, and customers could even get photographs of registered drivers via their own trusted channel -- as opposed to the easily-faked licensing documents carried by traditional cabs. (Big cities sometimes have 'gypsy cabs' whose markings and meters can be hard for even local police to distinguish from licensed cabs.)

Uh, no. I don't know what podunk city you live in, but in my city, cabs must have GPS devices, driver's licenses, and a medallion, in addition to specially marked cars. All of these are inspected at least yearly, compared to Uber's one-and-done verification system.

And what if there are competitors? As long as all of them are branded, and can be reviewed on third-party sites, customers can decide whether they like the power of driver reviews, or some other mechanism for checking abuses.

I'm sure some drunk guy will have to presence of mind to review multiple car services at 3am in the morning. Cab services are regulated because the passenger has no or limited choice in their selection or their ability to review the available cars.

But now for users of technology, conditions A, B, and C are gone. Anonymous pick-ups are precluded by design.

Uh, no. See drunk guy at a bar at 3am, above. Uber does not solve this. Technology is not the magical solution to everything. Regulation exists to solve problems in this area which technology cannot, and especially in Uber's case, does not solve.

Indeed, if anything, Uber simply makes the fraud problem worse. Because there's very little to stop someone from scamming Uber, and there's a lot of financial incentive for Uber to downplay or even hide fraud.

High end prostitutes seem to be able to get buy without the "benefit" of regulation.

boards exist specifically to ID bad actors and where good ones can build community reputation:



Or so I have heard

Boston has standardized on a way of metering taxis.

Taxis get a government-sponsored monopoly - a limited-quantity medallion - which allows them the right to pick up a passenger anywhere in a given territory (e.g. Boston, but not Cambridge). In exchange, they are required to pick up ANY passenger when on duty (they cannot legally decline to drive you somewhere), and they are required to charge you pre-determined rates as measured by a pre-determined meter.

Livery, or "black sedan" services, are not permitted to pick up arbitrary passengers who are hailing a cab. However, they are also not required (or allowed) to have a medallion, and they are not bound by any metering or pricing regulations at all.

I believe the theoretical distinction is that when hailing a cab, you are in a position of no negotiating power - you are limited to whatever cabs happen to drive by. "Being able to hail a cab" is a public utility. So the city has pre-negotiated a generally acceptable contract.

In contrast, you (pre-2012) are negotiating a contract with a livery company. You can choose any livery service you want from a phone book or directory, you can ask about their rates, pick a specific time, perhaps choose the type of car, etc. There's no "certified" locked meter, because the price is something you negotiate, and you have a choice of vendors.

Here's where Uber flips the industry on its head. Medallion owners tolerated livery companies, because without the medallion, livery services were restricted to pre-arranged rides, and most livery services couldn't offer a large enough fleet to provide low dispatch times without advance notice.

Uber forms a communications network linking ANY interested livery driver with ANY interested passenger. You pre-arrange the ride, but you pre-arrange it minutes before pickup. And Uber provides an Internet-era dispatch system; they've replaced grumpy dispatchers, two-way radios, and kickback systems with two iPhones (yours and the driver's) with built-in GPS. They can route your "call" directly to the closest in-network driver. Uber isn't a florist; they're FTD.

As far as I can tell, Massachusetts doesn't have any statewide regulation of livery services; each town has its own rules. Worcester apparently had a "12-hour rule" that defined what qualifies as a "pre-arranged ride", but that's been suspended or something.

So IANAL, but here's the situation as I see it:

- Uber isn't operating a livery service, period. They provide a dispatching network that's used by licensed livery drivers. - Livery drivers don't have to use any kind of meter. They charge a negotiated price. With an Uber driver, you have negotiated a price based on "mileage as the iPhone GPS records it".

Which gets back to "which measurement devices used in trade are regulated in Massachusetts"? See my cup-of-dice comment elsewhere.

Thanks for such an insightful post :)

So with #1, that's the Boston's right. But it's not what the C&D is about, so we should set that aside. This is about #2.

With regards to #2, it's clearly reaching. You can make an argument that they're "measuring the distance with the iPhone", but clearly they're measuring it with GPS. The iPhone is not a measuring device. If they used the accelerometer in the iPhone to measure distance, it might be a fair point.

If they don't want GPS used in commercial transactions it's within the city's power to ban it. But that's what they're doing: banning the use of GPS in commercial transactions. Not banning Uber's iPhone app.

I don't think the city is willing to do that, since this is really about screwing with Uber using whatever regulation they can find and not about fairly enforcing the rules.

Yes and no; the location accuracy of a GPS receiver is strongly dependent on the accuracy of its timing source. The Dept of Weights & Measures generally certifies the accuracy of each physical device. In theory, the drivers could get their phones certified for measuring location and have one of those green stickers on the back that one of the other commenters mentioned.

In practice, any driver that tries will probably find it basically impossible to do, as I believe your analysis of the city's motive is correct.

Uber, AirBNB and Food Trucks are interesting for two reasons:

1) They are on a collision course with the regulatory state.

2) Their employees are, by and large, young liberals.

Cab medallions are not much different in concept than wind and solar subsidies. In both cases, the government is picking a winner.

Our types of companies have been happily immune from the meddling of the regulatory state. As we crawl out into the real world we are dog-fooding the polices we voted for. Hopefully we will realize how bad they taste.

Interesting point. I looked back at the world where no such regulations existed, and I didn't see a perfect market which quickly and efficiently eradicated charlatans and thieves. No, instead I saw a world where people were constantly being preyed upon by the guiled class. I saw a world where the only people you could really trust were those in your close personal circle, and every transaction with a 3rd party, new or known, was rife with risk.

The "regulatory state" didn't come about as a predicted social experiment, it came about by constantly reacting to an endless stream of malfeasance that constantly stood to wreck any possibility of a functioning free market.

Cities and states regulating measurements and fare mechanisms are generally a -good- thing, even when it affects some darling company. For every darling company that wants us to "just trust them to do the right thing, they're good Silicon Valley-types," there are a dozen would-be scamsters plotting how they can take advantage of similar models to make free money. The constant "free market response" is "Oh, well, people will just shop somewhere else." Yes, after having lost their money (some times many, many people losing their money) AND their trust in any company like the same.

The world of figuring cab fares doesn't exactly need to be "turned on its head," it's a well-established practice of livery that's been going back for hundreds of years (perhaps more - I don't know the complete history). Yes, new technology can make it more efficient, but how inefficient is the current system exactly? Is it worth the risk? This is what local communities ask themselves. Why should one company be granted the permissions to step outside of the decision process and state they don't want to follow the community rules?

Every action by a government, and most especially inaction (failure to regulate) picks winners and losers. Failing to regulate pollution levels, cab fares, food safety, etc. make winners out of moderately unscrupulous types and moderately scrupulous types. Certain forms of regulations can make winners out of either the highly scrupulous, or the highly unscrupulous.

Nothing tastes bad to me about not letting cabs just use their iphones to automatically calculate fares from unmonitored and unvetted software. It makes it harder for Uber to make money? Well crap, cry me a river, it's better than making it easier on the thieves - society has chosen that path over millennia.

So on one hand, the world is rife with thieves and scoundrels and the state is the only thing standing between what we have now and Mad Max. On the other hand you're willing to entrust people working for the state with with powers undreamed of by the thieves and scoundrels.

But what happens if thieves and scoundrels hold positions within the state? Restaurant owners pay them to make laws against Food Trucks. Cab drivers pay them to make laws against Uber. Hotel owners pay them to make laws against AirBnB. In the wrong hands, the regulatory state becomes a weapon. That is what is happening now.

Your response appears to assume that I believe that the "State" as we know it is the only mechanism for creating a well-agreed upon set of rules, or that I hold any illusions of perfection anywhere humans are involved.

Thieves and scoundrels exist in all strata of society, it's a natural phenomenon. We create rules about the rule makers - bureaucracy is both a natural response and outcome. Vested interests infect and corrupt all things, which is why we provide mechanisms for review and change. These mechanisms may not be perfect or easy in all situations, but they can be made functional if we intend to fix them. You seem to not acknowledge the fact that a non-regulatory state becomes a weapon as well.

I am not impressed with the black and white dichotomy expressed between "regulatory state," and "free market," - in fact - the choice of "regulatory state" vs. "state of regulations," speaks volumes as to your intentions. We have direct experience with both overly-regulated states and under-regulated states. Neither work particularly well - instead, we strive to constantly re-balance them and find better ways.

It is for this last reason that I think it is good that they have come under scrutiny. This provides clear barriers for others waiting to see the rules made ineffective so that they may (wrongly) capitalize on the weakened system, and an excellent opportunity for the local population to consider the state of a rule and a bureaucracy that may have run too long unexamined.

To one last point: unscrupulous actors also pay politicians to remove laws and regulations for their benefit. The lack of or presence of, a regulation in and of its self does not predict a positive outcome.

> wind and solar subsidies

> the government is picking a winner.

Sometimes picking a winner is a good thing.

Burning coal and oil pollutes air and exacerbates global warming. These are bad things. As a society, we should pay a little extra to avoid them. Wind and solar subsidies are probably less efficient than, say, a carbon tax, but probably better than nothing.

Except it stifles innovation in other sectors. There may be alternatives that are better but aren't subsidized which makes it harder for them to succeed.

> Except it stifles innovation in other sectors

this is intentional. the point is we want wind and solar to succeed because they have lower negative externalities. the competing sectors we want to not succeed are things like oil and coal. its a pretty reasonable assumption to make that even with innovations that increase the pollution efficiency of coal and oil, its still not going to be as good as solar and wind.

of course, you might also be referring to alternative sectors like hydroelectric or nuclear or whatever. in that case, i agree with you. that's why a carbon tax is better than subsidies.

As I understand it, food trucks are mainly running into trouble where they do business while parked on streets. It does seem reasonable to me that the public regulates whether you can park a big honking truck on the street and operate a retail business there. For example, Atlanta bans food trucks on public streets, but they operate out of private parking lots when the landowner has given them permission to do so (they often make the rounds of corporate offices). There's even a privately-operated "food truck park" where a number of them gather: http://atlantafoodtruckpark.com/

Bringing it closer to the story, Boston limits food trucks, as well. They can only be in certain spots in the city, and space is limited. This causes a lot of kvetching by food truckies and their fans. Of course, traffic in Boston is absolutely insane, and I'm not wont to support food trucks anywhere and everywhere in the city.

So, Boston is right in the cross-hairs of the, "Why can't you understand innovation?" crowd. There's a lot of really good reasons why you can't let food trucks roam free and do business wherever in Boston. There's also a lot of really good reasons the Department of Weights and Measures exists. Sadly, I don't think those reasons will be considered by fans of these services.

That being said, I'm a huge fan of Uber Boston and I would like to see them be able to continue operating. If they would discuss with the city of Boston (or the Commonwealth) how they could become compliant with the law (or can agree that they are, in fact, compliant with the law), even if it means regular government audits, then that would be fantastic. I worry that Uber will take the child's approach and shove their fingers in their ears and yell, "LALALALALA I CAN'T HEAR YOU!" Hopefully they'll understand that they need to work with regulators, and that they actually do so.

Damn liberals, screwing everything up for the rest of us!

This is especially sad considering a recent cab experience I had in Boston. I lived in Boston for a about 5 years before moving out to Seattle, where I recently started using Uber. Boston has one of the worst cab situations especially if you go out late at night. I was back in Boston a few weeks ago, and ended up running into a few friends and stayed up till 3AM. When it was time to go home, there were either cabs that had passengers, or ones that just didn't want to stop despite waiting for 10 minutes. I pull out the Uber app and get a ride in literally a couple of minutes. My friends hadn't heard of the service and they were just dumbfounded that something like this existed, and they all became customers on the spot.

In Seattle, I use Uber only when I have to since cabs are easy to get. I can't imagine using Uber in Manhattan. But in a city like Boston with a shortage of cabs, and just generally grumpy cab drivers I can imagine Uber was just putting a serious dent in the cab business, more so than other cities.

(Hello fellow Seattlite!)

I'm with you here. I rarely take cabs here in Seattle (I mostly bike/bus everywhere), but when I travel it can be indispensable.

I can't tell you the number of times I've had to (look up a local cab service and) call a cab, wait for it for 10-20 minutes... and not have it show up. Or schedule a cab to be there to pick me up early in the morning and take me to the airport and... not have it show up.

Three clicks on my phone and 2 to eight minutes later, there's an Uber.

Yeah, regular cabs have their place. I take them when I can, because they are cheaper. But in Chicago many will give you a problem if you don't pay in cash and many neighborhoods are underserved. When it's 3AM and I'm in a far-out fairly sketchy neighborhood, I'm SO glad Uber exists.

I don't think being a startup should grant you immunity from the law or absolve the requirement to follow local regulations and licensing statutes. Lawyers, doctors, electricians they all have to follow the law too.

Why is Uber a special case?

Two reasons (neither dispositive):

(i) The cities in which Uber operates usually have dysfunctional cab systems. San Francisco, for instance, is notoriously underserved.

(ii) Much of the regulatory overhead in running a cab/livery service really is an artifact of top-down market controls from the turn of the last century that have been exploited to lock the market to a privileged few operators.

Imagine for a moment you got into a taxi and instead of the meter, he had an hour-glass with tick marks on the side and a bike odometer. Would you feel secure about what you're being charged?

Most of the Uber drivers use iPhones, which (especially the older models) have notoriously bad GPS. If it skips off to the wrong street for a few blocks and adds 1/4 mile to my trip, and I don't notice by staring at his screen, how would I know? Normally, I trust the cab company because that little meter is tracked, registered, and supposedly regularly audited.

Phone-based GPS, really?! They probably should be taken to task by weights and measures.

But why is Uber even metering the trip distance? If they incorporated the destination address to the booking, they could calculate an exact price based on time of day/projected congestion/etc. Then they'd have even better consumer protection than a taxi cab (where the driver still has an incentive to go a more expensive route).

They know your start location because you call them there. They use GPS to determine your end location, to save time.

Uber doesn't really even publish a rate schedule for how much you pay, and it doesn't have stable prices. They go up during periods of high demand, for example. So it's unclear why you'd object to the GPS, except to mess with them; you don't know what you're going to pay in any case.

So make the destination address optional while booking, and if given you'll get an exact price ahead of time. This doesn't exactly conflict with demand pricing either - Uber just has to be a bit smarter ahead of time.

The fundamental problem is "you don't know what you're going to pay", and I'm not surprised they're being called out for that under consumer protection laws. The point of taxi regulation is to prevent people from being cheated on the spot. Uber is in a position to do even better than what regulations are capable of, with market pricing, and they should aim for that.

There is very clear pricing posted on their site: https://www.uber.com/cities/san-francisco

They meter the trip distance because the faster route may be a lot longer. Charging based on "crow flies" distance would align driver and rider interests, but for those "can't get there from here" destinations, the drivers would be underpaid and perhaps more reluctant to accept the fare.

Have you taken a taxi outside the U.S. ? :) . In Peru, you had to haggle how much you wish to pay for your ride.


"Taxi Prices in Peru

Peruvian taxis don't run on meters, so you need to arrange a price with the driver before accepting the ride. Taxi drivers usually try to overcharge, especially when confronted by a foreign tourist. If you have no idea how much the fare should be, try reducing the driver's price by a small amount (if the driver says 12 nuevos soles, offer 10). It's always a good idea to ask someone beforehand, such as a hotel receptionist, how much a taxi to your destination should cost."

These are two good reasons for the law to be reformed, but not for why Uber is above the law.

I see no reason for Uber to be exempt from the same regulations other services must abide by.

Laws don't change for the hell of it, certainly not because someone looks over the books and says "well thats silly". To get a law changed requires drawing mass attention to its silliness. Often times the best impetus is to get the public pissed off, taking away a service the public loves is a great way to piss them off.

Its a chicken and egg problem. There has to be igniting situation to get change to happen and a company can not operate 100% legally without the change occuring. As a result its sometimes in the company's best interest to ignite the fire themselves and eat any blow back.

I never said the law shouldn't be changed, it should. But just because a company is "first to market, cutting edge", does that make it exempt from regulation?

Given the New Years Eve pricing debacle, I'm glad regulation is being put in place. Taxi's are underserved and a horrible experience, but their pricing is both consistent and 100% transparent during and after the ride. Uber's pricing is a confusing mess. Time, demand, distance, and vehicle are all factors and you're only aware of the price after the ride.

Uber is not exempt, but they have the right to fight the laws with whatever legal means they can afford.

For any well developed market, radical innovations in productivity can almost assuredly be illegal. Standards of service must be set on a national level, not a mico one.

Imagine if every time you went to a different city, Uber's user experience changed drastically. You never knew what Uber would cost. Perhaps sometimes you had to do things that completely broke Uber's experience. Imagine if Boston's Uber app was just a button that said "call dispatcher" and then you had to pay cash at the end of the trip. Why bother?

Uber is not challenging the right of a municipality to issue rules or regulations. What they are challenging is an antiquated system of bureaucracy, for a specific market, which wastes both a city's budget and customer's time.

I think we will see the Uber strategy applied to a very wide rank of micro-regulated markets. And its going to work. The cities that "win" will lose, big time.

I would add:

(iii) It's unclear Uber is actually in violation of the law. Boston may have sent a C&D, but this hasn't been tried in court yet and I would not be surprised if Uber was to win.

Marijuana shouldn't be regulated as it is.

Should startups be allowed to sell Marijuana? Of course not, either everyone should, or nobody should. Level playing fields and all that.

Ironic example given that every medicinal marijuana dispensary in the country is operating in spite of Federal law. They only get away with it because the US government has decided to, at least for now, turn a blind eye.

That's a little simplistic. They're also taking advantage of local and state laws that explicitly allow them to operate. There's no such arbitrage to be had in cab laws.

You were able to use marijuana as an example because legalization of it is considered a reasonable opinion. This is only possible due to its existing prevalence, which is only due to the brave/stupid people risking their lives to distribute it in spite of the fiat against it. Reality drives the model, not vice-versa.

I have to agree with you.

The original Ubercab model (allow anybody to sign up as a driver without any vetting of anything) was absolutely atrocious. The new one is better, but uber drivers benefit from customers who feel like the product is as safe as the regulated product without actually doing things like ensuring that the cars are inspected.

That said, I pretty much lost respect for Uber when they pretended that expressing high-demand rates as a multiple was clear. Nobody with any UX experience would've agreed with them that it was clear... but they all would've agreed that it's a great way to camoflague massively inflated rates.

"The original Ubercab model (allow anybody to sign up as a driver without any vetting of anything) was absolutely atrocious."

What about Lyft? Isn't that essentially what they're doing?

My understanding of zimride/lyft is that they're more about arranging carpooling than acting as professional taxi service.

Does Lyft let random people sign up to work as gypsy cab drivers? If so, I think that's insane.

Zimride arranges carpools for long trips, but Lyft is pretty much just an Uber clone with private individuals operating their personal cars. There is some vetting but no insurance or anything as far as I know.

This hits close to home (literally). I've used Uber in Boston lots of times and while the service is pricier than conventional taxis, it's a nice way to guarantee yourself a ride at high-demand times.

This is not competitive with existing taxi service but complementary: if I see a regular taxi coming, I'll take it; if I need to call for a guaranteed car at an odd time, I'll use Uber.

I hope this gets resolved in a way that works for us customers. Innovation should be harnessed, not punished.

Oh, the rent-seeking. What are taxi medallions for if not graft and log-rolling?

Traffic and pricing control...

That is true. But it was much more relevant in an age when the rider was more or less at the mercy of the driver who picked them up. The internet on your phone (not to mention the GPS) means you can much more easily tell if you're being cheated. And the fact that you contact Uber and then they send a car means that the sketchy kidnapper risk is mitigated.

TL;DR: Uber is innovative, but their approach (or lack thereof) to dealing with regulatory hurdles in each city disgusts me.

It seems like HN has already picked up on the major issues Uber faces in Boston, as well as pretty much every city: a new style of relationships with drivers, and "metering" virtually-on-demand livery rides, which are intended to be both unmetered and pre-arranged.

After seeing this same story repeated too many times now, and the resulting discussion, I feel the need to throw down. You don't need to trust me (IANAL, etc.), but based on my experience in the field -- I co-founded HireWinston (initially a Canadian, corporate-focused Uber competitor; we've since pivoted to competing indirectly by selling taxi fleets) -- I hope I have something to add.

First, the relationships with drivers: Uber tends to work directly with drivers (many, if not all, of whom they hire legally from existing livery services). In order to boost their chances of availability, they spend some of their hard-raised cash to book drivers for entire days, taking a steep loss at first in the hopes of driving enough demand to better satisfy their capacity.

In most cities, there are clear regulations that define a livery service. We found that, if you work as many commenters understand Uber working -- namely, as a network that has pre-arranged agreements with drivers or livery services to shuttle rides in their spare time -- you're in a sufficiently comfortable area not to get shut down. However, the way Uber works to juice supply (especially in newer markets) tends to clearly fall under the definition of a livery service, as they have their own "employees" that they pass rides to.

Second, the meters. This one I'm much more in their favour on: the phones themselves are not metering devices as the laws define them (i.e. they do not themselves calculate the price). I haven't personally torn into their source code, but having heard from an insider and having built this tech myself, I'm fairly confident their Driver App simply sends GPS data back to the server, where the calculation takes place according to a pre-defined rate. The customer either implicitly or explicitly accepts this rate through the TOS and/or by virtue of using the service (assuming the rates are published somewhere).

This setup guarantees they have something to show regulators if ever asked. From our research and testing, the integrity of the data from existing metering technology is similar enough to that from an iPhone or Android's GPS (ideally accompanied by accelerometer data). And, since the calculations happen on a server that records full route information rather than in a black box that discards it: way easier to share this with regulators. So A+.

Third, and most importantly, is what you don't see: Uber's relationships with city regulators. In Toronto, the municipal government sent us an official notice that they were concerned with our business, and that they wanted us to come talk through our business model and underlying technology with them. They were genuinely excited that there was innovation happening in the field in their city, and really just wanted to make sure we weren't doing anything egregiously wrong.

We sat down, and had an incredibly pleasant meeting. 30 minutes, back-and-forth Q&A, with some regulators who have spent years in the space. They appreciated that we knew the laws, had worked to abide by them, and were comfortable with all but one aspect of our business model (cancellation fees). No C&Ds were sent out.

At the end of the meeting, they asked us what we thought of Uber. Apparently, for months, the Uber team was dodging any request for a meeting the office sent them. While I definitely cannot attest to Uber Boston's actions on this front, I can't imagine that Uber Toronto was taking their plays from a different playbook.

In summary: Uber has done a tremendous job pushing the industry forward, and I'm confident that our approach -- selling the underlying software to existing taxi fleets, who truly want to better service their customers but have no idea what to do with technology -- is a more sustainable and dependable iteration on the model. I'm thankful to them, and I truly love a lot of the folks I know who work there.

That said, I have no sympathy whatsoever for these C&Ds whenever I read about them. The company relies on deep pockets and public sympathy for the "underdog technology company" to change laws, rather than working with the existing system. And, frankly, normally I'd even be fine with that... if it weren't the taxi drivers -- the most marginalized members of the entire taxi ecosystem -- who were getting the shortest end of the stick.

DISCLAIMER: I do not, and have never, worked for Uber. Most of my knowledge comes from a mix of an outsider's view and third-party testimony of the approach that Uber has taken in Toronto and NYC. I'm not sure if Uber Boston took a different approach than Uber Toronto or Uber NYC, so take all specifics with a grain of salt.

(edit: formatting errors)

Nice post, and you definitely bring a certain amount of insight with it.

However, the current system is, in many cities, broken. Working to change laws to fix a broken system will produce a better outcome than trying to work within the broken system to bring about its maximum potential.

I love and use Uber because it provides a different and better service than taxis do in San Francisco. I don't even own a car, and instead split my transportation budget between public transportation and Uber. ZipCar has its uses for some people and some situations, but for me, Uber is my go-to reliable transportation system.

Comparing and contrasting Uber with SF taxi service:

- I've never had a bad experience with an Uber driver, whereas ~30-40% of my taxi rides were unpleasant in one way or another.

- It takes all of 30 seconds to call an Uber, and they always come. Calling a taxi dispatch takes much longer and is extremely unreliable, as many taxi drivers will pick up anyone that hails them on their way to picking someone up.

- Uber takes care of all payments through the app, including tip. My credit card is charged, and it gets recorded in Mint and added to my transportation budget for the month. Many SF taxi drivers will harass you if you try to pay with a credit card.

- Uber drivers will open your door for you, call you to make sure they pick you up at the right place, and many offer to help carry bags. Taxi drivers are usually in a rush, and don't offer anything besides the ride.

These are my experiences in a year in San Francisco. I used taxis exclusively for a while because they're cheaper, but have since switched to using Uber nearly exclusively. And with UberX now, the cost difference is negligible. I see no reason to own a car in SF as long as I'm here, and the reason for that is Uber. [[I am in no way affiliated with Uber with the exception of being a customer]]

Thanks -- this is a subject that is near and dear to me.

I definitely agree with you that there is a service gap between Uber and standard taxis. Some of it comes from the app, some of it comes from their quality control.

(On that note: Uber does a really solid job with quality control, and I've personally recommended a stronger emphasis on quality control to fleets we work with. They all seem to want to take us up on it, so I look forward to reporting back on that one soon!)

That said, the points you bring up aren't actually broken by the current regulatory system (save one, sort of... see the asterisk), which is why I am disgusted by Uber's typical reaction to the C&Ds that come their way (and their preparation for them):

- Taxi companies today have a very limited, only-opt-in feedback mechanism: you call and complain if you have a particularly bad or particularly good ride. I've personally spoken with GMs for companies that do hundreds (sometimes thousands) of rides per day about this; they rarely break 20 customer service calls per day. Uber's feedback mechanism -- not a new concept by any means, but new to the industry -- of asking users to rate their ride, and send in some comments after every ride is relatively frictionless and undoubtedly leads to more data points, which can then be shared with drivers to encourage a healthy sense of service. This could and should be adopted by the rest of the industry.

- Again, this is a fantastic innovation, but doesn't need to lie outside the existing regulatory system to succeed; our old business model is proof that they can co-exist. Rarely do cities take issue with apps. Further, most fleets use dispatch systems that directly assign a driver, and all drivers know they will get docked if they take a street hail instead of the passenger they're assigned.*

- Yet again, no regulations prevent this... but I've been the recipient of many a complaining driver myself. While drivers have both legitimate and illegitimate reasons for trying to avoid credit cards (fleets often tax drivers an additional point or two above going credit card rates; credit card transactions must be declared when filing taxes), this again can be solved with an app that respects the current system. In fact, while running HireWinston, we showed our driver partners that the guaranteed 15% tip more than made up for the increased cost they incurred by taking credit cards.

- See first bullet above re: service again.

To sum up, I hear you on all fronts: riding with Uber offers a superior experience to virtually any other cab out there. My point above, however, still stands: all of the innovations and improvements you bring up (which are, from our customer research, consistently the most salient) come from areas that few, if any, regulators take issue with (I know from experience). Which is why, again, I am disgusted by how I've seen Uber deal with regulators.

*I feel for you, though; this situation is at its worst in SF. But on the flip-side, I've heard more "passengers aren't there anymore when our drivers show up" complaints from SF fleets than I have anywhere else in North America. Because of this, it's often more attractive for drivers in the Bay Area to get docked and grab the street hail's certain money than to risk the no-show. IMO, SF taxis and consumers are stuck in this perpetual loop until the supply of taxis increases dramatically.

all of the innovations and improvements you bring up ... come from areas that few, if any, regulators take issue with

They don't issue with them, but still no one in the regulated industry bothers doing them. And why? Because thanks to the government distortions in the market, you don't need to do any of that stuff to compete.

And that's what government interventions in markets almost always ends up doing: protecting a group of entrenched companies at the expense of consumers.

Good for Uber for trying to fuck over an industry that's been fucking over their customers for decades, with the full faith and protection of the governments those customers pay for.

I believed this point too when we first started our company, and were more Uber-clone-y than we are now. However, after spending a year working in the industry, I've learned that it's more "catchy idea" than reality.

It turns out that the taxi industry is a little different: the fleets have wanted to innovate for years now, but have little idea how. The regulations clearly permit innovation. In cities where taxis aren't run by the municipal government (i.e. "in cities that aren't New York"), there is healthy competition between taxi providers, in spite of their commoditization (regulated pricing, supply, etc.).

IMO, the existing taxi technology players are the ones who are stifling innovation (and/or "protecting a group of entrenched companies at the expense of consumers"). 2 of the big 3 dispatch technology providers charge hefty fees just to open access to their APIs for new entrants, if they'll even grant you access in the first place. And, due to the long-term, hardware-heavy, dispatch-focused nature of their contracts, they rarely have any incentive to innovate for the passengers; one of them once told me that they have nobody on staff who understands the web or web technologies!

Working with the existing dispatch companies, while not a necessary evil (take Hailo or GetTaxi, for example), is the best way to ensure scale and distribution -- the amount of cash consumer-focused players must spend in this industry in the hopes of curbing cab booking behaviours is enormous. Our research showed that, when calling for a pre-arranged cab, 95% of taxi passengers chose their fleet because it was first to mind, or the fleet they always called. In other words: only 5% of consumers chose what TaxiCo to call for any rational reason. Having an existing brand identity, and a number of cars on the street constantly hocking your wares, goes a long way in this industry.

But even before Uber came along, a wave of new dispatch companies had started cropping up, most of which are relying on a healthy partner ecosystem in order to make it in the first place. But, since dispatch technology contracts have typically been signed as 10-year license agreements, evolution naturally trends to a slow change: a lot of forward-thinking fleets I've met with renewed their contracts in the last year or two, since they didn't feel the new technology was mature enough yet (and, in most cases/for their needs, rightly so).

All this to say: I'm not yet sure what the best way to spark the necessary change is (FWIW: currently leaning towards "open standards", but I'm not 100% sure how that would look yet... ); figuring it out will likely be a huge benefit to my company. But I firmly believe, based on facts and experience, that it's not a regulatory issue.

(edit: formatting)

You don't seem to be understanding. The regulations themselves don't stop innovation directly, but the fact that it's very difficult and expensive to get a medallion, plus the fact that once you cross that barrier, you'll be protected by law from much new competition, means that it's harder for new players to enter the market and compete.

The medallion system is stupid and should be done away with. It's purely anti-competitive.

Again, you're right on the fact, but not on the interpretation. The medallion system used by most cities restricts the number of cars on the road in a city. However:

1) Most taxi fleets -- especially the larger ones -- collect monthly rent from car owners, rather than own a ton of medallions themselves. The medallion system benefits owners of medallions, not fleets. This distinction, while invisible to the masses, is incredibly important.

2) It's definitely not rare for new fleets to pop up. We talk with plenty of folks who own fleets that are only one or two years old. All you need is a subset of drivers (and/or owners!), a couple of regular clients, and a little gumption. New fleets are popping up, and trying to innovate as best they can. The new, lower-priced, often mobile-based dispatch systems I mentioned in a previous comment have really been a boon to this segment.

3) In most cities, black car licenses are similarly restricted to medallions. The limits may not be posted, but they exist. In fact, a great article about Uber in The Atlantic exposed this issue in DC back in May[1].

4) Again, fleets working with us are achieving similar results; companies like Hailo and GetTaxi (who seem to be trying to work within the system) are as well.

In short: the medallion system is a red herring when it comes to stifling innovation. It is definitely an issue, one that tends to marginalize drivers and unnecessarily restrict supply for passengers. But every one of the companies you and I have mentioned abide by the restrictions it imposes, so your point is moot.

Going back to my original issue: I have no problem with challenging rules, conventions, and decisions (I'm an entrepreneur, posting on HN... do you really expect me to disagree here?). My issue lies in Uber's underhanded approach, where they both flout actually sensible laws and arguably force governments to send C&Ds by refusing to engage with them when initially approached.

[1] http://www.theatlantic.com/magazine/archive/2012/05/why-you-...

Super lucid break down of a lot of the issues. I have a bit of operation understanding because very early spring, a friend and I were exploring doing an fleet/taxi management application for the NYC FHV drivers and even were at the TLC taxi app rfp reading. All of these points are lucid and concord with my knowledge

Note: I'm not doing anything in that space presently (merely did a thorough exploration of it), all the human factor issues terrified me, I like my good ole hard core math & computer science & engineering challenges! :)

Thanks, Carter! My partner Krista tried to come into town for that meeting, but they switched the date on her. You almost met!

The human factor is definitely a huge challenge in this industry, and I can understand anyone's aversion to it. That said, if you ever want to chat taxi tech (or FP -- we're migrating more and more of our backend to Erlang every day, and I'd love to learn from your Haskell experience ;), drop me a line!

emailed ya :) reply

For anyone wondering what uber is: https://www.uber.com/cities#

I'm not impressed with Uber. I read the entire article twice and many of the comments, then went to their home page.

I still have no idea what they do other than it somehow relates to taxicab service.

* Reliable pickup in about 10 minutes by hitting a button on your phone or a text with your address -- no need to call or tell someone the address. If you've ever had the experience of waiting 30-45 minutes for a cab to ride a couple miles, or maybe the phone line is just busy, you'll know why reliability is important.

* Clean car with friendly and helpful driver (who you can rate). Seems minor, but it opens up possibilities. If you're on a date or business meeting, and for whatever reason need a ride somewhere (e.g. after drinking), uber will enhance the experience rather than cheapening it.

* No money changes hands (taken from your card on file at uber, including tip). Receipt with lots of details (including your route on a map) is emailed immediately.

* I'm pretty sure it's cheaper if you are above $15 fare, or about the same maybe.

I don't have any affiliation with uber, but I have had a great experience so far (only twice, once for me and once for someone else). I plan to use it a little more often.

I guess, in retrospect, I could probably have been happy using cabs more instead; but they just always seemed more awkward, unreliable, and just less pleasant. If I can get this for the same price, why not?

Cabs might still be better for areas where they are easy to get and you're going short distances, e.g. Manhattan or Las Vegas.

Uber is a taxi/livery service that magically uses technology to do things that shuttle/livery services in major cities have already been doing for years.

The difference is that: (1) Uber is a startup, (2) Uber is backed by YC, (3) Uber lets anyone be a driver, (3) Uber ignores the laws and/or regulations in the cities that it operates until it gets caught and threatened with major lawsuits/fines, and (4) Uber promises 10-minute pickups (sub-hourly timeframes between reservations and pickup are the defining line between livery services and cab services in many cities).

i think the uber service is great. that said, we (collectively, the startup community) can't keep using this "we're an innovative tech company and the laws we're breaking weren't written with our great innovations in mind" argument. it doesn't hold water. it just sounds childish and pompous.

I love it how they wear it as a badge of pride. It's the first step to changing the game in Boston.

How absurd.

the Division of Standards is claiming that until the National Institute of Standards and Technology has guidelines in place for GPS location technology

Is not as though GPS is some brand new thing that they have never heard of before. This whole tone of this makes me think of Central Services from the movie 'Brazil'. Uber should ask the Division of Standards for a 27b/6, just to keep things official.

That's not what they're saying. They're saying that under MA law, a cab driver couldn't replace their meter with the "equivalent" GPS system, and so neither can Uber.

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