They likely have more cash-on-hand than the cumulative Taxi base they are 'disrupting', they've been caught multiple times sabotaging competitors, they've been outed for dishonest advertising, and have been repeatedly accused of hostile actions toward their drivers. They ignore sensible regulations like maximum hourly workweeks and insurance minimums (do you want your driver working 90hrs/week without liability insurance?) under the guise of fighting the taxi cartel.
It often takes a 'push' to get bad laws changed, and Uber's provided much of that push, but not all laws that restrain business are bad and not all companies that break bad laws are good.
I personally think most of the taxi regulations are stupid, especially the price controls. But they're not irrational, nor did these legal regimes arise out of nefarious lobbying on the part of taxi companies. Rate regulations, forbidding surge pricing, requiring cabs to serve the whole city, etc, arise from cities treating cabs as a part of the overall municipal transit infrastructure. The "last half mile" of transit, as it were. I don't think regulated monopolies are a good idea, but they're certainly a common solution when it comes to industries that resemble public infrastructure.
Given that the taxi companies were granted monopolies as part of a larger regulatory regime, why are they "evil" for trying to enforce that privilege in the face of companies like Uber taking the high value routes out from under them, using techniques like surge pricing they aren't allowed to use?
If the local administrators have the power to hand out monopolies, they should also have the responsibility to retract it when it no longer makes sense. A repeated and long-delayed failure to do so is harmful to society, whether or not it was had good intentions at the beginning doesn't absolve it of criticism now.
... for being woefully outdated and not inline with market economics
Most, if not all regulations should serve and protect the citizenship and not private interest.
That Uber so vehemently lobbies against sensible regulation, like an obligation for commercial insurance, speaks volumes.
Yeah, I think this is something a lot of folks overlook - regulations exist because society has decided its interests are better served by making folks play by a certain set of rules than by hitting peak market efficiency or whatever. Now you can argue that a given regulation is not the best way to achieve a societal goal (for instance that limits on cab numbers don't reduce congestion much) or that they have worse externalities (medallion systems squeezing out the little guy in favor of big companies that can afford 6-figure medallion prices) or that the lost efficiency isn't worth society's goals, but straight up saying that they're "inefficient" isn't a case for anything.
This is technically correct, but is forgetting that society is often wrong about what serves its interests.
For some popularly unpopular examples: homosexual marriage being illegal, a drug war instead of drug treatment programs, putting fluoride (a neurotoxin) in the water.
Edit: those are current laws, for more popularly unpopular laws see slavery, the 18th amendment, the banning of blood transfusions, etc, etc
But society (and times) change. If there was a regulation that said 'the rightmost lane must always be reserved for horse-drawn carriages', we'd all be laughing about it.
Then everybody is worse off. It's a negative spiral that either ends in a monopoly or a stalemate with money being wasted on holding off the other party's attacks.
(assuming that Lyft is engaging in dirty tactics as well, but the argument works similar if it's one-sided)
Regulation is to come to terms with drivers being dishonest about pricing to rip people off, and concerns about sexual advances on drunk passengers.
Any one who argues against it should at least be prepared to have an answer to these problems.
I'd love to know how many Uber drivers actually have an appropriate drive-for-hire license (in jurisdictions which have one). I wouldn't be surprised if it were far, far less than 100%.
That said, the narrative painted by the tech press has focused mostly on the efforts of cab companies to "stifle innovation" without acknowledging that they are defending legitimate rights. They paint Uber as a scrappy startup trying to compete with "fat" cab companies that have regulators in their pockets. The tech press narrative is simultaneously baseless and self-aggrandizing. The real narrative is less sexy: technology is enabling companies like Uber to eat up markets previous served, rather inefficiently, by modestly profitable small businesses. It's no different than what Wal-Mart did to mom and pop shops, or what Amazon did to small retailers, or what Starbucks did to local coffee shops. A national corporation can offer better service and lower prices, and can exercise quality control that obviates much of the need for regulation. This is both good and bad, but mostly, it's just the way the world works.
There's no reason, on top of all that, to demonize cab companies for trying to force municipalities to hold up their end of the bargain.
> It's no different than what Wal-Mart did to mom and pop shops, or what Amazon did to small retailers, or what Starbucks did to local coffee shops.
Mom and pop shops rarely had regulators preventing Walmart and Starbucks from touching their market share. We're talking about very large centralized taxi companies that run entire cities. Most cities have 2-3 large companies dominating the entire city with a few minor players running limo services. Even in small towns the companies are hardly small friendly businesses.
My father drove taxi for years for multiple different taxi cartels and they all paid their workers poorly, withheld funds for weeks whenever customers used credit cards, and often only hired new drivers within their family/network. He loved the freedom of driving but hated the companies. He only enjoyed it when he could become a broker aka owning his own car and being able to distance himself from the company.
I hear similar stories from every Taxi driver I speak to, which is often. They see Uber/Hailo technology as liberating.
I see neither Uber nor the Taxi companies as the David vs Goliath. But Uber-style technology has given drivers the opportunity to make higher wages AND be independent from local cartels, while opening the door to new entrants in the market both for new drivers and new tech, even decentralized tech in the future.
So I do agree that the tech/news industry should make sure the real issue being debated is technology vs the nature of regulation, and stop looking for archetypical narratives. Instead of trying to reverse the narrative in favor of the other side.
There are many different structures of taxi companies.
Some Fleets are owned by drivers (similar to employee owned companies).
Some fleets are owned by a single company, who got into the business at the right time to benefit from it (of course with a high upfront investment).
And then there are some groups of fleets owned by a single company, sometimes across many cities.
So a 'Taxi Company' can be worth anywhere between a $100,000 company to a $100 million, based on the structure.
The 'little guy' analogy was false for sometime since Uber and Lyft disrupted the market. But now, compared to Uber and Lyft at current valuations (multiple billions), these fleets (any type) are certainly "tiny" if not "little guys".
TNC disruption has been necessary for a long time, since regulations didn't evolve continually to reflect market demands/requirements. Now its time to turn the heat on the TNCs to ensure the driver/rider is not screwed due to lack of valid insurance and licenses.
I foresee a point where Uber and Lyft will get more regulated, existing taxis will get a fair playground in terms of insurance and pricing flexibility, and more transport options will become available for everyone.
You can count the number of municipalities with such actual laws to the tune of less than 100 out of 19,000 cities in the US.
Regulation is often not about being inline with market economics - it is often used to enforce things that companies would not do (because of cost) that have significant impact on employee, customer, and public safety.
The regulations in place vary from city to city, but Uber and co are not just arguing against the out-of-date bits (knowing "the knowledge" which some argue is irrelevant with technological help, and so forth) but the whole lot including drivers having adequate insurance and relevant background checks.
I'm very much in support of new business models thriving, even if it eventually kills the old ones (progress is a good thing) so I'll back Uber wanting a piece of the pie, but I don't agree with the complete circumvention of the existing regulations so I wouldn't currently feel safe using them.
Regulations usually aren't about being inline with market economics, otherwise they'd be unnecessary. Regulations are only inline with market economics in some instances of market failure regulations (e.g. monopoly regulations such as local loop unbundling mandates). Usually, the whole point of regulations is to create incentives which don't match straight market economics in order to effect different behaviours from companies (such as improved service or standards of conduct)
It's not "breaking a bad law" that can be virtuous, it's the case. Sit-ins are/were virtuous because the cause (civil rights) was just. The cause here is primarily "Uber and its investors want to make more money".
Where I live in the midwest traditional taxi cabs are unreliable with their pickup times, they often advertise they accept credit cards when they do not, and they have a history of intentionally diverting through long routes.
Uber brings accountability and transparency to every step in the process of getting a taxi cab.
I'm not rooting for the good guy, I'm rooting for the more convenient and efficient customer experience.
This is not allowed in the UK and you have a variety of ways to tackle it.
> and they have a history of intentionally diverting through long routes.
This sounds straight up criminal. Carrying a GPS enabled phone and mapping the route driven should gather enough evidence to persuade regulators to take action.
Do you think that is more efficient/effective over just going to another "taxi" company? Because that's how you'd solve the problem if you didn't have a cartel/monopoly granted and enforced by government.
Additionally, do you think it's fair/efficient/effective for us to legislate against scenic driving? Because, some taxi companies might offer that specifically, and not as a ploy for more money.
Following from that, do you think it's efficient/effective to clog up regulations with such minutiae exceptions/details as above? So that even new competitors into the "taxi" business need to comply with countless regulations.
Face it, as soon as you make exceptions, you need transparency. To get transparency you need to enforce compliance, to enforce compliance you need to make sure the players conform to whatever method you come up with to ensure that they aren't breaking your minute detail/regulation. And that means increasing the barrier to entry into that market, which means less competition.
This happened to me multiple times in the US, Europe and Asia generally when taking a taxi from the airport or a railway station. And I know first hand that tired customers in a hurry in a foreign country don't have time, energy and determination to gather evidence or argue. This willingness to give up a fight is likely a contributing factor to the continued prevalence of the practice.
I dislike many of Uber's business practices, but ride sharing in general is a great way to leverage technology to solve the above problem.
Instead, I summoned an Uber. It got there in fifteen minutes (and would have been sooner except for traffic), took us home, then continued on to drop off our friend. Minimal hassle, a comfortable ride, and impressed the fuck out of our friend. I was sold.
Then in Seattle earlier this year, we used Uber again. Our first trip was perfect (as we'd expected). Our second trip, the driver didn't even show up. We watched him on the app for 20 minutes; mostly not moving, and then driving around, never getting closer than ten blocks. My friend called him (another handy feature!) and he said that he'd already picked us up? Or someone up? He'd already done a fare, anyway, and apparently we weren't part of his plans. My friend got billed though, and had to contest the charge with Uber (which they quickly reversed).
Had we been excessively drunk (as I'm sure a lot of people were that weekend) we might not have even noticed. We would have flagged down a cab (which we eventually did) but forgotten about our uber ride entirely. The driver would have gotten paid, we'd have been out fifteen bucks, and no one would be the wiser.
Uber has gotten shady, for sure, but with their explosive growth it's hard to believe that the drivers aren't getting shady as well. Uber needs to be held to the regulations (which may need updating to support newer models of transportation), but they also need to start behaving like a real company and not an insecure frat boy trying to bully everyone into doing things his way. It's time for their investors to step up and start protecting their investment, and force Uber to stop exposing the company to lawsuits and horrible public image.
And it's time for people to stop using Uber until they straighten out their deal.
I think Uber is great. I just see no reason to aggrandize them or to demonize the cab industry.
Seems both are up to no good.
Unfortunately, it's not enough to have a written law that says "oh yeah, taxis will totally take you anwhere, pick up anyone hailing them, and accommodate the disabled"; it needs to have actual observable implications.
When your entire defense is that "but we have to provide this public service", you might want to check that you're actually providing it.
Agree about the dangers of needing to make everyone a pure good or a pure bad guy though.
If I buy legislation that allows me to extort consumers then when I extort them afterwards it is legal, but it's also as evil as always. There is a reason why illegal and evil are two different words.
I too was of the same thought that Uber drivers don't discriminate. But I have had a few too many instances where Uber shows more than one vehicle available nearby, when I confirm booking, after some time, no driver accepts. Why would it be so? Could it be because of my non-caucasian/american name?
After this happened, I just removed my photo, and now I'm thinking of having a generic american first/last name.
Just because Uber says it doesn't happen, doesnt mean that its not happening. Either Uber is using wrong metrics/data to identify such occurrences, or is flat-out lying to everyone saying that "the drivers cannot discriminate".
This to me, is the key of the problem. Yes, the taxi medallion system was broken in many cities and Uber is forcing to at least acknowledge that regulation in it's current form it's not longer useful. But I think that as a company Uber it's not a positive force on the public transportation market. Quite the opposite. I love tu use it when I'm in San Francisco but cannot shake the feeling that we are screwing ourselves long term by supporting it.
The medallion system was never "useful". It was simply a feudalistic setup designed with the help of regulatory capture to allow private investors to impose a private tax on riders and drivers.
Uber is simply modifying the feudal system, placing themselves at the top instead of the medallion owners.
Given the range of big investors and political support for the company (that stretches all the way up to Obama), I would guess that it's not even a change in who owns the taxi system - Goldman sachs are probably simply buying up uber stock and dumping medallions on easily duped investors - pension funds and the like, while lobbying their ass off to give Uber a free pass on all this lyft sabotage bullshit.
Owning a taxi medallion is like owning a McDonald's franchise. Doesn't exactly make you a Master of the Universe. A $1 million investment in an NYC medallion nets you a maximum of about $75,000 a year: http://blogs.reuters.com/felix-salmon/2011/10/21/why-taxi-me.... The average McDonald's franchise nets $200-250k/year, and costs about $750k-1.5 million to buy.
Anyways those boomers are annoying (my father is one); explaining to him how he got incredibly lucky is like bashing my head against a wall, especially contrasting with my own personal, relative financial failure.
As for "Goldman Sachs-esque" returns, the price of a taxi medallion increased from about $100k in 1985 to $250k in 2005. Less than the return most Americans got on their house over that time. There was a major spike in the last decade, but it doesn't seem to be correlated with any real change in demand for cabs, or any specific regulatory action. As far as I can tell, the spike in price is just the result of the general attractiveness of safe but low-yield investments in this poor economy.
In any case, these are $1 million investments that net maybe $50-75k per year, and are appreciating quickly but not more so than say real estate in SF or NYC. The owners of these medallions aren't big money players. The investors behind Uber are.
Only if McDonald's was the only company that was allowed to sell food.
Have you considered not using it?
Think it won't happen? It happened to Aereo. Sure, they didn't have as much money and weren't in as many locations, but its a similar vibe: if they closed their doors tomorrow, nothing would change. They might be in the process of disrupting the market, but they haven't won yet. They could lose everything overnight.
This plays into their "Uber vs. The Taxi Cartel" trope perfectly. In reality, Taxi regulations vary by city, state, and country. Uber is now operating in over 90 cities in the US and in 44 other countries. They couldn't possibly be "forced to close at any moment" since their business is legal or at least 'not illegal' in the vast majority of those territories.
The "Taxi Cartel" is really several hundred independent locally granted monopolies that exist to attempt to ensure requirements that Uber is going to ignore. The highly profitable airport routes exist to subsidize the requirement that taxis are handicap-accessible and can't discriminate against customers. Medallions were created to ensure that cars were properly maintained, drivers could earn decent wages, and that there wouldn't be reoccurrences of the crime waves against taxis and customers that led to medallions in the first place.
Obviously the number of medallions has been restricted to an unreasonably small number in most places causing the terrible service that many are used to. Also fairly obviously, the advent of the smartphone with personal profiles has reduced the crime potential facing the typical cabbie as well as the issues hailing cabs in outer boroughs or less populated neighborhoods. All of that said, it's not like cab companies or taxi drivers are widely profitable. The only public Medallion company (NASDAQ: TAXI) only makes $35M in revenue/year and about 1/3 of that in net income. If the claims surrounding Uber are true, they're projecting close to $2 Billion in net revenue in the very near future.
If Uber does indeed take all of the profitable routes, Taxi companies will close their doors. Some might consider that a net win, but consider the Uber app and the demographics of Smartphone owners (http://i.imgur.com/T5JpmQE.png) and then try and estimate how many Ubers are handicap-accessible. This would only be a net win for the wealthy, young, and non-handicapped, which was the entire point of taxi regulation in the first place.
I don't mean to argue that Uber = Bad and Taxis = Good, and there are other options to solve these problems rather than local monopolies and route protection, but the simplistic "Uber vs. Taxis" analysis usually ignores all of the externalities that would accompany a taxi-less world.
This is interesting to me because none of the studies I have come across concerning taxi regulation emphasize these arguments; they mention them only in passing, if at all.
Take this paper from the November 2007 issue of Transport Policy, "Entry Controls in Taxi Regulation: Implications of US and Canadian experience for taxi regulation and deregulation": http://schallerconsult.com/taxi/entrycontrol.pdf
In its discussion of the rationale for taxi regulation (section 3), these reasons are given:
- economies of scale may disproportionately favor larger companies
- regulations guarantee availability of off-peak and low-density service
- many aspects of taxi service cannot be examined prior to consumption
- insufficient barrier to entry may lead to oversupply
The reasons given there (p.22) are:
- lack of regulation leads to "excess entry" into the market
- high taxi supply could take people away from more "economical" transport options
- arguments about pollution and congestion
- cyclical demand could lead to wage downturn when demand subsides
- cyclical demand could harm service quality, since long-term players can't become established.
So why suddenly are taxis the champions of the underprivileged, and their competitors the tools of young rich person oppression? If protecting the underprivileged is "the entire point of taxi regulation in the first place," why are these social arguments missing from pre-2009 (when Uber was formed) literature?
That said, I've never seen a lot of signs that taxi regulation was effective in providing service in low density areas and off-peak times.
Indeed, it seems pretty clear to me that the main purpose of taxi regulation is either:
a. Sincere concerns about "oversupply"
b. A revenue generation device with a fig leaf about a nonsensical "oversupply" problem.
c. A corrupt institution to guarantee the profits of politically connected people with a fig leaf about a nonsensical "oversupply" problem.
d. Or most likely, some mixture of the above.
Note that c. is probably not the principal answer here.
In any case, I think that there's a terribly high bar of evidence required to imagine that taxi regulations save us from the scourge of oversupply, and I've never seen the slightest whiff of such evidence. Why exactly is the taxi industry uniquely prone to oversupply?
Potentially because you only cited two studies when discussing a massive industry and are probably purposefully ignoring all of the work done to support the point you claim is ignored?
There are decades of research on the very points you claim are ignored. A small sample:
* Do Economists Reach a Conclusion on Taxi Deregulation (http://www.emmanuelcombe.org/moor.pdf)
> Because taxis are more expensive than other transit services, they must offer something that other transit modes do not. In particular, taxi services are important to certain segments of the population. Seniors, housewives, the disabled, and the poor each account for a much higher share of taxi trips than their share of the population (Rosenbloom 1985; Weiner 1982).
* Factors Affecting the Use of Taxicaps by Lower Income Groups (http://trid.trb.org/view.aspx?id=92135)
> Previous studies and our data suggest that the poor often choose taxis because they are the principal option when an automobile is not available. Taxis appear to be chosen over conventional transit (when it exists) because they offer greater service flexiblity, convenience, and duration of service, as well as better meeting the security demands of the poor. Increased availability of taxi service by reduced market entry restrictions and reduced cost of taxi service by permitting group riding and providing subsidies would increase the mobility of the poor.
* Subsidized Taxi Programs for Elderly and Handicapped Persons in the SFBay Area (http://trid.trb.org/view.aspx?id=70030)
> The objectives of the report are: (1) to describe six programs which deliver transportation service to elderly and handicapped persons utilizing the subsidized taxi mode; (2) to identify the essential similarities and differences among these programs; (3) to illustrate, in qualitative terms, the nature of the costs, efficiencies and impacts on taxi operators, subsidizers, and users of the six approaches; and (4) to interpret this information and identify those findings which appear to be transferable to planners in other localities. The subsidized taxi programs are successfully delivering transportation service to elderly and handicapped residents in all locations as evidenced by rising client enrollment and ridership volumes. Overall, response to the programs has been and continues to be extremely favorable.
* The determination of acccessible taxi requirements (https://dspace.lboro.ac.uk/dspace-jspui/handle/2134/2284)
> This report describes the results of a programme of ergonomic research undertaken to provide a scientific basis for the generation of regulations concerned with the introduction of accessible taxis in the UK.
* Modeling urban taxi services with multiple user classes and vehicle modes (http://front.cc.nctu.edu.tw/Richfiles/22015-Wong-Wong-Yang-W...)
> One of the main issues is the provision of several modes of taxi services in many large cities. For instance,
there has recently been a concern about the provision of easily accessible taxis for the handicapped, whose travel characteristics are very different from those of other customers.
* Compromise & constraint: Examining the nature of transport disability in the context of local travel (http://invent.newmobility.org/library/wt8-2.pdf#page=42)
> While major advances have been made over the last twenty years in the planning and provision of transport that is accessible to all, the links have not yet been effectively made between applied work on transport planning and the major developments in theoretical understandings of disability which have been taking place during a similar period. Existing studies have attempted to measure transport disability, but have generally failed to link it to wider theoretical or structural concerns, or to explore disabled people’s responses to transport disability.
* Taxi - Why Hailing a New Idea about Public Accommodation Laws May Be Easier Than Hailing a Taxi (http://heinonline.org/HOL/LandingPage?handle=hein.journals/v...)
> Municipal policies have also been developed to combat the problem, some demanding automatic confiscation of the cab if a complaint is alleged, others requiring cab drivers to take at least one fare a day to underserved neighborhoods or face suspension.
Thank you for the accusation of intellectual dishonesty, but you are wrong about this. My process was: Google for articles about taxi regulation, and see what percentage of them make the argument that regulation protects the underprivileged. In my sample of 3 or 4, the answer was 0%, which seemed a clear argument against the sweeping claim that protecting the poor is "the entire point of taxi regulation in the first place" (note: not taxis, taxi regulation).
Furthermore, your links (or the few that I had time to investigate) do not support the central thesis that taxi regulation specifically protects the poor and underprivileged. In fact, many of them are specifically contrary to your shallow analysis.
> Seniors, housewives, the disabled, and the poor each account for a much higher share of taxi trips than their share of the population (Rosenbloom 1985; Weiner 1982).
This says nothing about taxi regulation benefiting the poor. And in fact much of this paper is criticizing regulation; it even cites evidence arguing that regulation hurts the poor (emphasis mine):
> Others (such as Eckert 1970, Beesley and Glaister 1983, and
Frankena and Pautler 1986 advocate removing entry restrictions and
eliminating monopoly rents. Beesley and Glaister (1983, 611) estimated that entry and price restrictions lead to nearly $10 million per year in welfare losses in the city of London alone. Embedded in those welfare measures are
the poor without cars, the elderly, the disabled, and others who now and
then need affordable door-to-door transportation services and would
benefit from a more competitive market. They are on the wrong side of the
political calculus, with their dispersed costs overlooked in a regulatory
process dominated by the concentrated benefiaries (Taylor 1989).
> Factors Affecting the Use of Taxicaps by Lower Income Groups
The abstract of this paper specifically argues that the poor would benefit from reduced market entry restrictions!
"Increased availability of taxi service by reduced market entry restrictions and reduced cost of taxi service by permitting group riding and providing subsidies would increase the mobility of the poor."
I have to run and don't have time to see if any of your other evidence is any better. But maybe you can narrow it down to a more compelling list.
To prove your point, you can't just show that taxis are good for the poor, you have to show that taxi regulation is good.
I actually do largely agree that most taxi regulations only serve to increase costs to consumers without much benefit but that's not really the end of the story. You really need to define 'taxi regulation' in order to have a productive conversation.
Handicap-accessible vans are much more expensive than the typical Prius. The handicapped market is small enough that no Homo Economicus would buy a van to serve the handicapped population without a subsidy or mandate. It's a big enough problem that just about every jurisdiction on earth has defined the issue and worked on their own solutions (UK for example: http://webarchive.nationalarchives.gov.uk/20100104171434/htt... or Houston: http://www.houstontx.gov/ara/regaffairs/Houston_Taxi_Study_R...).
No matter what some people would have you believe, regulations aren't just enacted to entrench power. They're almost always in response to some continuing problem. There's probably a way forward that largely deregulates the existing taxi industry, but acknowledging the reasons for the existing regulations will greatly limit the 'unforeseen' side effects.
There was a nice quote I found the other day, known as Chesterton's fence:
"In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, “I don’t see the use of this; let us clear it away.” To which the more intelligent type of reformer will do well to answer: “If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it."
I'm a bit sensitive to these sorts of arguments, and not because I'm deaf to arguments about social justice -- actually the opposite. Most of us on this website were born into incredible privilege that we did nothing to earn. We grew up able to focus on our studies without being distracted by instability in our homes or violence in our communities. We didn't struggle to feed ourselves. Some kids that grow up in poverty acquire mental habits and social patterns that they will never be able to shake completely that identify them as poor and limit their mobility no matter how hard they try (or anyone else tries to help).
This is heavy stuff that all of us who are privileged have to live with. The world is deeply unfair and we're the beneficiaries of it. Nothing we can do can undo all the unfairness. All the money in the world can't buy a magic wand that will turn Africa into Europe. The best we can do is try to be part of the solution and not part of the problem, as much as we reasonably can.
It's because this injustice is so real that I get so cranky when the social justice card is, in my view, played without sufficient foundation. A human's most natural state is to value themselves and the people close to them more highly than everyone else. When you make a social justice argument, the only people who will be impacted by it are the people who have accepted the idea that they have a moral obligation to care more about justice than their own personal well-being. So you are, in essence, cashing in on the blank check they have written to the world promising to value the welfare of other people more highly than their own wants and needs.
This might sound a bit melodramatic for a discussion about a ride-sharing service. But people who like Uber and Lyft really like it. If you confront them and say "your joy dance is deaf to the poor and sick that you're trampling under the soles of your shoes," that is a very serious charge.
So if I see someone say that "the entire point of taxi regulation" is to protect the poor, handicapped, etc. and then I find that the first several articles I find concerning taxi regulation have nothing to do with this (and in fact, some authors argue the opposite, that reduced regulation would benefit the poor), I get a little cranky. Because it, in my view, overstates the connection between this issue and the very real injustices of the world, and makes an unwarranted claim on the moral obligation of people who have decided to value justice above themselves.
> No matter what some people would have you believe, regulations aren't just enacted to entrench power.
I would never argue that they are. Few things in life are just one thing.
And I wouldn't argue that 100% of taxi regulations are automatically bad. Some are probably worth keeping. The handicapped-accessible issue is likely one of them. (I don't know much about the specifics of that regulation, but it certainly doesn't seem to apply to 100% of taxis since I see plenty of Crown Victoria or Prius taxis that are just like what you'd get from UberX.)
But some regulations are clearly obsoleted by the innovations of Uber/Lyft. And I am really opposed to a reactionary stance that says we have to protect the existing taxi industry against Uber/Lyft or the poor and sick will suffer (the implicit assumption being that taxis serve the poor and sick in a way that Uber/Lyft never can).
Those things likely cost extra, and that will shuffle money around a bit in a non-linear way - Uber will have to find a way to sort that out, one way or the other (unless they're shut down). It might be better for them if they find a solution on their own terms, before the regulators step in.
Ha ha. In Sydney, at least, this is a joke.
While it got a lot better I remember my first ride in 2006 from the airport into town.
The cabbie was texting away while rushing down the autobahn with 160 (km/h). Scary.
At least he only overcharged me by about 50%, which wasn't too bad for Prague at that time.
Funny story involving Prague mayor...
Rather, I think that the deal is that taxi regulators work with taxi companies and taxi drivers. Day in and day out, for, at this point, generations. Taxi companies and taxi drivers advocate for their interests and beliefs, as of course they do and should, both to the people in their local Taxi and Limousine Commission or local equivalent, and also to city councilors and such on the fairly rare occasions when those people take up taxi regulation.
The size of the market is to a large degree irrelevant. The taxi companies are going to advocate their interests -- mostly informally and without thinking of themselves as lobbying -- whether they're in a $5 million market or a $50 million market. It doesn't really matter how big objectively the taxi market is -- however big it is, it's their livelihood.
Taxi regulatory practices will be subjected to democratic scrutiny only rarely. Honestly, prior to Uber bringing all this into the spotlight, how much thought did you give to taxi regulations? Most people I've spoken do didn't even know what a medallion system entailed. It's a minor and bureaucratic subject that the ordinary people are typically uninterested in. Similarly, government officials who want to make a big showy example of rooting out corruption probably do not gravitate to TLC jobs -- it's just not that big a deal, and not that high profile.
In that environment, you'll often see a slow process of regulatory capture. And indeed, it's hard to argue that the taxi industry was not marked by regulatory capture.
But it's a mistake to imagine, because of that, a shadowy cabal of well-heeled businessmen with a gigantic presence behind them. Uber is the big business, not the taxi companies. The taxi companies have had a cushy deal, but that's through a slow accretion of generations of largely informal "lobbying," not a backroom power-brokering deal.
All I meant is that there is some fixed cost to lobbying local government for favorable regulations regardless of community size, and it's probably not worth it for local governments which are too small to have a sizable taxi market.
> Honestly, prior to Uber bringing all this into the spotlight, how much thought did you give to taxi regulations?
A fair amount, but that's because I read a lot of libertarian stuff, and taxi regulations have been a major topic of libertarian economics as a textbook example of regulatory capture (perhaps second only to tariffs) for much longer than Uber has existed. The Machinery of Freedom, a popular libertarian book proposing a legal system without government, discusses taxi regulations at length, and it was first published in the 1970s. Libertarianism aside, I think taxis have always had a reputation in pop culture for being bad experiences, but I agree that the economic and political debates we see now involving ridesharing were never common.
In my city I thought Uber would be massively successful. I was so excited when they launched. But there are hardly any drivers around, because the police calls up Uber rides and then tickets the driver for operating an illegal cab. No one wants to drive with that persecution going on.
It may be cold half the year in Minneapolis, but I think it makes people a little more reasonable.
There ya go, fixed it.
Uber also has the advantage that they're generally not dealing with national governments, but local ones, who are much more easily swayed by big businesses. One locality might declare them illegal, but they can just drop that market and move on. Or more likely, as happened here in Virginia a few weeks ago, they'll come to some sort of arrangement with the local government and be back in business in a few days.
Well, in my market (San Diego), anyways, I am certain the number of drunk drivers would go up, and the bar industry would see a hit in their clientele. I rarely even drink myself, but I don't think twice about calling a Lyft to go out or come back after drinking.
>bar industry would see a hit in their clientele
Back to pre-Uber levels, presumably.
On the other hand, Uber is not illegal. It never really was. Taxi cartels are attempting to twist the law to make it sound illegal. But really, Uber is just a dispatching service for limo companies that already exist. If you're talking about UberX, that may be a different story. UberX is not available in all 90 cities that regular Uber operates in, but there are enough cities with just regular Uber service that it won't be a problem if they have to shutter UberX for some reason down the line.
Companies intentionally market themselves to mislead in ways that are beneficial to them, in terms of image. One example is Hyundai, which walks the fine line of modeling its logo and style after Honda to draw off Honda's goodwill with customers (I think that this is quite smart).
I wonder how much Uber has invested in its PR status to keep this underdog image.
How can their investors, of which some are excellent startup investors, be fine with this. Is there no guidance at all??
I see them as the "underground." Granted they have gotten a lot of funding, their primary opposition -- taxis -- are firmly entrenched & cities all over the country have considered various legislation to ban/stop them.
In fact, I think it's somewhat silly they're fighting with Lyft. They should be working together to knock back the entrenched players.
Someone needs to make the craigslist of Uber or a Meta-Uber. The fact that many uber drivers are also taxi operators is very telling.
Don't we argue always for the last-mile to be a public utility? Same scenario. Whitelabel services can contract with locales, an API is provided that anyone can integrate with, and the city can manage capacity and utilization.
The way I see it, Uber is trying to establish a global rent-seeking scheme. Or, to put it in slightly another way: they're trying to capture a large number of the existing, mostly local rent-seeking schemes.
Once that happens, they will no doubt fall into the same slouch that infests any lucrative monopoly.
For the time being the customers can at least enjoy the ride.
The cancellations happened because recruiters were getting matched with Lyft drivers who had already been pitched by Uber (sometimes even by the same recruiter), so they tended to call it off before the Lyft arrived.
It's unclear how much this policy impacted the Lyft drivers, but their time is definitely being wasted to some degree.
They may have more money than taxis, but taxis often have entire local agencies dedicated to their industry. It's extremely difficult to break that sort of captured regulatory structure. The ICC for example was chartered in 1887 to regulate railroads, and was not dissolved until 1995!
> " Every company is, to some extent, an underdog against governments."
Why would "Gilded Age robber barons" be excluded from that statement? And he went to them based on the fact that you also mentioned that period of time (and regulation that affected them).
So while I wouldn't have written that reply myself, it's fairly obvious how he got to it from your comment
The ICC is just a great example of how hard it is to get rid of a regulatory agency, even when it is obviously no longer needed.
They now have a guy from the Obama campaign (David Plouffe) working on their PR.
"David Plouffe, the former campaign manager and White House adviser to President Barack Obama, is taking his political secret sauce to Uber late next month as senior vice president of policy and strategy"
Before now I'd considered them too small to be worth bothering with, but hey, if Uber is worried then maybe I should give it a try. After this, and Uber's attempts at doing the same with GoTaxi a few months ago, I'll be very happy to take my business elsewhere.
I'd also be interested to know if the VCs that invested in Uber were aware of these tactics. It's especially sad to think of good startup investment money being used to defraud a competing company rather than invest in good customer service.
Having never used a ride-sharing service before, I hesistantly installed Lyft and handed over my payment information.
After the first ride, I didn't look back. I used their services maybe 10 times in 3 days in order to get around the city. Waits were never very long (we got rides at many different times of day, morning, mid-day, late night) and all of the drivers I had were friendly.
My experiences were all pleasant and the fares were reasonable. I can't speak to the quality of the Uber experience, but it seems many of the Lyft drivers were not too keen on the company.
All of them said they vastly prefer Lyft — they said Uber's policies for firing otherwise excellent drivers as soon as they dip below 4.6/5.0 stars makes them very worried.
As a user, I found the actual driving experience of Lyft better, but the Uber app is vastly superior to Lyft's – not being able to split rides being a major annoyance.
Actual implementation of policies can be completely different (imagine a ratings drop triggering an automated email saying "turn in your kit before 6pm today or a security detail will come get it" vs. triggering a non-confrontational call from someone trained to help you improve your ratings). Even the tone with which a policy is generally enforced (even if the end result is exactly the same) matters.
I don't have direct experience with either Lyft or Uber, but I wouldn't discredit drivers' impressions.
I wonder if action they took against my account was a result of them trying to mitigate these attacks from Uber. If so the damage is much worse than just the canceled rides.
> the risks of using customer's credentials in such a careless and ridiculous way many magnitudes higher than the potential rewards
Are you sure? What are the risks of parking a username? I doubt it's illegal and I bet they could obfuscate the traffic well enough to make it very difficult to prove to a court that they were the ones doing it. The only downside seems to be a bit of slightly negative PR (i.e. the assumptions of those who jump to conclusions) when Lyft detects the widespread parking.
Meanwhile, the upside is the expected value of their most profitable customers times the probability that they will switch to Uber+Lyft or 100%Lyft.
Low risk, large upside... I don't think this is as bad a business proposition as you make it sound like.
Where I felt the app shortage hurt the most wasn't at the top - there are a few glaring omissions, and some of the apps took a long time to show up, but WP8 for the most part has apps for top services (facebook, twitter, instagram, spotify, uber, etc).
But then there's this second tier of apps where WP8's coverage is absolutely terrible.
I was talking with a coworker today about how his bank (small, local bank) just released an app allowing mobile check deposit - on android and iOS.
Your favorite pizza chain or sub shop has an app for ordering delivery or takeout? Android and iOS only.
Target has an app that allows you to search an item, and then see what aisle it's in in the store - android and iOS only.
There's this huge class of convenient but not necessary apps that you don't get on windows phone right now, and having spent a couple of months with them, I don't think I could go back. It's too bad really, I feel like Microsoft got a lot of things right with WP8. I definitely preferred the UI compared to android.
In line with Microsoft's info-not-apps philosophy, I'd love for them to work with, say, Lyft, to integrate the APIs behind the app into Cortana - so I can have a similar experience as the Lyft Android Wear app. Extrapolate to all the apps that are UI layers for a web service.
It really does seem a two-horse race between iOS and Android.
Either way the intended meaning was clear enough not to warrant a flame.
I'd be interested to know what, specifically, you disapprove of. The article sounds to me like one company trying very hard to recruit another's drivers.
What is the alternative? One or both companies refrain from recruiting each others' drivers? Google and Apple (and others) recently got in trouble for doing that sort of thing.
Uber does have an explicit SUV option (I don't recall Lyft having this), which has proven to be a boon upon occasion.
If you the type of person who closes a bar, though, I would strongly suggest additionally adding a photograph, since it will make you easy to identify in the crowds of the bar rush.
It's interesting, there are two totally different cultures when it comes to Lyft and Uber drivers. Lyft drivers are always happy to talk and love it when you sit in the front seat. Uber drivers are always pretty friendly but often encourage sitting in the back like a taxi. There are drivers that are both on Uber and Lyft and they are always great and seem to be more like a typical Lyft driver than an Uber driver.
Don't do that -- it screws over the driver who has to burn gas.
It is NOT about Uber ordering fake Lyft rides to keep Lyft drivers off the street, as was alleged by Lyft last month.
It is about:
1. Uber using the Lyft service to get in touch with Lyft drivers, then trying to recruit them to be Uber drivers by presumably paying them more
2. Lyft trying to block Uber contractors from using Lyft, so that they cannot do (1)
3. Uber using burner phones and fake Lyft accounts to enable them to keep doing (1)
Also keep in mind the uproar here over the past year caused by Apple/Google/etc trying to increase profits by subverting the free market for tech worker salaries. Is the only difference that then it was collusion as opposed to an adversarial arms race? Or does the collective opinion depend on whether HN readers stand to benefit financially?
What it sounds like from the article is that the independent contractors Uber hires are canceling rides whenever they realize that the Lyft driver has already been approached. If they had a policy of never canceling rides I don't think people would be as upset.
And while the canceling of rides isn't a big plan by Uber to undermine Lyft, the recruiting of their drivers most certainly is. That I have no problem with, but canceling rides is (borderline) fraud.
This is like $10k in revenue.
Lyft isn't trying to block Uber from contacting Lyft drivers at home, on Facebook, on LinkedIn, etc. They are trying to block them from abusing the Lyft service to recruit. It would be like Apple trying to block Google from waltzing into their HQ and walking from desk to desk trying to recruit their employees.
I still agree that it's perfectly legitimate for them to put forth effort to block recruiters but I think the fact that the drivers aren't employees does make it not quite as bad as your analogy.
Just making sure it's all in there. I'm not a big fan of Uber either but the large-scale stuff (top post here) seems way more important than Uber trying to reach out to each Lyft driver one time and see if they're interested.
And, look, if they could hail specific drivers that they'd never talked to before, I'm sure they would. But they can't. They don't control who Lyft matches them with. It sounds like they make some attempts to avoid just hailing the same driver over and over again, but sometimes they do hail the same guy over and over again, and in that case, they cancel.
Either way, I'm at least glad I've never used Uber yet, and now never will.
A "free market" is an economics term meaning a marketplace free from anti-competitive forces such as government subsidies, government price floors or ceilings, monopolies, cartels, oligopolies, non-compete agreements, etc.
If Google and Apple make an agreement about smartphone pricing, then we might not have a free market for cell phones. The government could then use regulations against such anti-competitive agreements to end the price fixing and restore a free market. In that scenario it was private enterprise causing a non-free market and regulation that made it a free market.
Regulations can help a free market (breaking up monopolies, preventing cartels and anti-competitive practices) or regulations can harm a free market (subsidizing production, preventing new entrants from entering the market). This notion of "free market vs regulations" is completely misunderstanding what a free market is and how the systems involved work.
"Free market" has multiple, ill defined and often conflicting meanings, which is partly what makes it so useful for propaganda purposes.
Yours is just one of those meanings, and a particularly pernicious one at that, because a marketplace free from anti-competitive forces has NEVER existed and never will exist.
The neoclassical school economics actually uses the term 'perfect competition' to describe your particular meaning, and while it's a very common assumption, it's one that always breaks their models (making them a poor fit to reality).
A free market is a market system in which the prices for goods and services are set freely by consent between sellers and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority.
It specifically lists "price-setting monopolies" and the like (which would include price-fixing agreements between Google & Apple, right?) as interference in a free market. Prices must be set freely by consent between sellers and consumers, not amongst sellers in backroom deals.
If a government's only "regulation" is to stop monopolies, price-fixing, and other violations of the natural supply/demand pricing, then you have a free market.
If no one stops those things, then you do not have a free market.
If BurgerKing and McDonalds collude to set a hamburger at $10, then Joe's Hamburger will quickly open and win market share with its $4 hamburger.
If the product is an advanced piece of tech with large amounts of IP - there can only be a few firms, thus the need to prevent collusion through regulation.
If people buy the phones voluntarily, knowing that the prices are set by agreement between Google and Apple, then that's a free market. The fact that you disapprove of sellers colluding to set prices does not mean collusion automatically stops the market from being free.
> The government could then use regulations against such anti-competitive agreements to end the price fixing and restore a free market.
Using regulations to force companies (or anyone) to do things they have not chosen to do voluntarily is not a free market. The fact that regulations might lead to an outcome you approve of does not make regulatory coercion a free market operation. The way a free market would "fix" price collusion between two sellers is by buyers voluntarily choosing not to buy from those sellers, causing those sellers to lose money and either go out of business or change their practices.
They narrowly defined a word that has many definitions while demonstrating outrage at any other meaning.
While they are technically correct in a textbook sense, their idea of a "True" free market has never existed in the context of this conversation, and it can be argued that price collusion between suppliers for a market is the natural result of free markets.
Monopoly is not free market in the original sense, even if it came out from unregulated competition.
But we already know these free markets are either not efficient or likely not efficient.
Strong form efficiency is provably false.
Weak form efficiency is only possibly true if P = NP (http://arxiv.org/abs/1002.2284).
No, it isn't. A free market is a market in which all transactions are voluntary: nothing happens unless both parties agree to make it happen. So unless your competitor agrees to let you sabotage them, sabotaging a competitor is not a free market operation.
Which, of course, is you exercising your market decision to not use Uber.
@ about 4:40 in this video:
Now this? Nice "pivot" guys.
A cheesy line from Batman comes to mind, they will live long enough to see themselves become the villain. The customers will end up asking for more regulation in a few years. Maybe Uber will start issuing a limited amount of medallions in every city. But a lot of money to be made along the way.
For service startups we benefit from the early adapter "eliteness." Early drivers as well as users of Uber were of a high social status and fairly sophisticated. Much like the early days of usenet, rules can be lax or non-existent. However when the mass market begins to arrive startups which previously flourished with an tight early adapter user base start to show their cracks.
No one wants to kill their own momentum but a way to see if your startup will start to stink as it grows is to recruit both service providers and users from online ad campaigns very early on. Track them as their own segment and see what sort of unique problems they bring.
If Lyft had 5 times the funding, Uber recruiting their drivers would look like a bold move. It would mean Uber believes drivers will stick with them long-term because life for drivers with them is clearly better, and the initial investment pays off in the long run, despite them having a smaller war chest to begin with.
Now that Uber has 5 times the funding, the same move looks like Uber is afraid of Lyft beating them in the market, and is trying to kill them early by buying off their drivers and crippling them. They can afford this even if driving for Uber is a shittier experience long-term than driving for Lyft, since they have so much more money it doesn't really matter. Lyft will be dead or badly injured before drivers figure it out, so Uber doesn't need to worry about being the best in the market.
What their actual motives are is anyone's guess, but it doesn't look good for them to do this.
Everyone knows reddit admins used to game the system by faking submissions to solve the chicken and egg problem and nobody really cares, but there would be an uproar if they were found to be manipulating story placements behind the scenes today because the scale of the site is so different.
People are pretty willing to overlook borderline underhanded things if you are really an underdog trying to get a leg up, but far less so when you're the industry leader trying to crush upstarts.
Consumers hardly ever ask for regulation.
To me that is clearly a consequence of consumers wanting more regulation. Same as with perishable products having to be clearly marked with its due date in stores, and practically every consumer protection law/regulation out there.
Not saying that these laws can't be abused, but that doesn't mean the consumers aren't the main reason behind their existence.
I think some businesses are against it (they tend to be the smaller ones), but other businesses (these tend to be the larger ones) like it because, while it imposes a burden on them, it imposes more burden on their competitors. Also, businesses can often get into a position where they basically write the regulations that they will have to abide by (i.e., regulatory capture). In that situation, regulation can be an asset for a business.
Underhanded tactics like this is just more ammunition for anyone who wants to make the argument that the industry needs to be regulated. Uber might be shooting Lyft in the foot but they're also putting holes in the floor they're standing on themselves.
But why aren't they succeeding?
Empirically, it's a bit higher, but not much. A few data points from my recent experiences - I take a cab to work once or twice a week if I'm running late. The last 3 Ubers (UberX) I've taken were $11.02, $11.45 and $9.79. The last 3 Hailos I've taken were $12.29, $10.39 and $12.09. These are from similar times on similar workdays with similar traffic patterns. (Edit: this is in NYC and the Hailo fares include a 20% tip)
I'm thinking I'll pay the extra dollar from now on, worth it to avoid supporting these business practices. Although my biggest problem with Hailo has been availability - it's often impossible to get a Hailo near rush hour while Ubers are always available.
I don't think it will get much further than that in many European cities. Most of the regulations are in place for a reason.
Uber X: $3 base fare, $0.30 per minute, $1.50 per mile
Lyft: $2.25 base fare, $0.27 per minute, $1.35 per mile
Both have a $1 trust and safety fee, and Lyft has a lower minimum.
I’ve personally had better experiences with Lyft overall, and I’ve taken at least 100 rides with each service.
Where I was, Uber was constantly jacking up the price with surge pricing, between 1.25x to 1.75x the normal price. Meanwhile, Lyft not only wasn't jacking up the price during those same hours but was running a 25% special. On top of that, the Lyft drivers were typically friendlier. No brainer which one I recommend to others.
And at the end the good care belongs to the driver not to the services behind them.
I don't understand why Silicon Valley and Startups think acting like this is not only acceptable, but should be applauded.
If you were to A/B test for user satisfaction instead (much harder to measure) you'd get a totally different result.
A/B testing is a tool, you can use it for good or bad.
I think you would pretty much get Amazon.
Strictly from a customer point of view they are the company that would get the highest user satisfaction I would give any company.
They do worry me though, that much power in some verticals is far too open to abuse.
The hangup calls were the side-effect of their extremely aggressive recruitment efforts for Lyft drivers - where it seems they'd hang up and call back later to try and get a different driver that they hadn't already pitched.
While not great, it also doesn't strike me as particularly underhanded or evil (this is a scenario where the "best" outcome for Uber is paying Lyft for a ride where they try and give the Lyft driver a phone and presumably a better paying job).
But not through cancelled rides, right? I don't understand how Uber trying to recruit drivers is any different from any tech company trying to recruit me.
It's a story because Uber thinks they need to do it. Does that then mean that Uber thinks they can't compete on quality of product and price of product?
I think it would be hilarious if lyft didn't ban the uber guys but hellbanned the uber guys (hellbanned in the hn sense). Which would make the number of cancelled rides make much, much more sense.
The fact that there are so many cancellations is a direct result of the Uber recruiters using a CRM to avoid pitching to the same driver more than once.