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Uber's playbook for sabotaging Lyft (theverge.com)
1224 points by coloneltcb on Aug 26, 2014 | hide | past | web | favorite | 391 comments

I've been mystified how Uber's kept up their "Underdog" mantle for as long as they have. They've raised over $1.5B in investment from some of the biggest companies, private equity firms, and VCs on earth. I think you stop being an underdog as soon as Goldman Sachs, Blackrock, TPG, KPCB, Google, and Jeff Bezos are invested in your success.

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.

The whole "taxi cartel" thing is stupid. It arises out of this really distressing attitude that every dispute must involve "good guys" and "bad guys." Yes, the taxi companies are trying to shut down Uber and Lyft using regulation, but they are just trying to enforce a legal monopoly granted to them by the cities in which they operate. It's a legal right they got in return to agreeing to measures like rate regulation and "common carrier"-esque regulations concerning routes.

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?

As you point out, most people are critiquing the state intervention for being woefully outdated and not inline with market economics (as they always seem to end up being overtime thanks to technology). No-one really thinks the Taxi companies are the "evil" ones because they were handed monopolies on a platter then got comfortable and fat with their position.

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
Why do regulations have to be in line with market economics in the first place?

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.

>Why do regulations have to be in line with market economics in the first place?

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.

> 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

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

> 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

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.

Market economics is the aggregate of the deals that people make when they are not coerced. It's what results when both drivers and passengers are free to choose their best options. Regulation that disrupts this, by preventing drivers from offering services (through a medalion system) or prevents passengers from paying for services (by capping fares) make people worse off than they otherwise would be.

You're willfully ignoring the positive parts of the regulations, like proper insurance and licensing requirements. And even those you listed have both positive and negative sides. It might be difficult to hail a taxi, but I do know that once I do, I can expect to pay the capped fare to go wherever I want to (common-carrier regulations mean they can't refuse you a trip within some bounds). I fail to see how the alternative, which would be flat-out refusal of service or drastically increased pricing to go to unpopular places, improves anyone's life.

Not when two competitors are spending their money to actively make the other competitor's service worse.

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)

It's what results when there is no incentive for people to know what their best options are.

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.

> That Uber so vehemently lobbies against sensible regulation, like an obligation for commercial insurance, speaks volumes.

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%.

I do think the local municipalities have a responsibility to revisit the regulations in light of a changing market, and frankly I believe a lot of the "universal coverage" motivations of the original regulations are misguided and never should have been in place to begin with.

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.

I feel like you're trying to paint the inverse picture where the taxi company is the 'little guy'.

> 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.

"Taxi company is the 'little guy'" analogy is wrong.

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.

Actually, in many places, Mom and Pop stores have regulators that stop Walmart and Starbucks from opening stores near them.

Very few locations in the United States have regulations protecting mom & pop stores from Walmart or Starbucks. You're exaggerating by an extreme factor.

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.

> critiquing the state intervention for being woefully outdated and not inline with market economics

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.

> Regulation is often not about being inline with market economics

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)

The problem is that local politicians have little incentive to retract an inefficient monopoly enforcement (even one that we assume was previously efficient), because the taxi companies' special interests tend to win out over the dispersed interests of all taxi customers. This isn't some specific flaw with taxi regulations. It's a basic economic reality of government regulation.

It's a bad law, but as people point out downthread, breaking a bad law is not in itself a good deed, it is simply a neutral one.

That's a good soundbite, but I don't like it. Breaking a bad law can be virtuous, but I suspect in this case it's neutral at best.

>Breaking a bad law can be virtuous, but I suspect in this case it's neutral at best.

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".

I think there is some legitimacy to the shake-up of the "taxi cartel".

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.

I agree with you here -- I'm not necessarily pumped about ride-sharing because it's the best way for everybody to get around, but it is an outstanding way to wake up the taxi companies and force them to actually consider customers. Until recently, they've had enough of a corner on the market that they can have broken credit readers, unsafe drivers and suspect billing without much consequence. In my city, they seem to be regarded as the Comcast of the transportation world.

> they often advertise they accept credit cards when they do not,

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.

"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 sounds straight up criminal. Carrying a GPS enabled phone and mapping the route driven should gather enough evidence to persuade regulators to take action.

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.

On the other hand Uber doesn't take cash, which I prefer.

For me, the appeal that Uber had (when it was active in Vancouver) was that most people didn't use it, and that I didn't have to pay at the point of delivery (nor tip). On a Friday night, leaving a venue at midnight with my wife and a friend, we knew from experience that waiting for a cab was going to be an hour at least, and probably more, as taxis were surging into the city with their fares and then rushing back out to get more fares. We were just out of the way enough that no cab was going to want to carry us from A to B, heading from a poorly-travelled area of town to another. On top of that, it was going to be hugely expensive, and splitting the fare is a hassle.

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.

You know, I don't even think anything is wrong with Uber's public image. Its in their shareholders' best interest to be free from insurance requirements, etc, although I think ultimately they'll have to capitulate to those. And some of the "poaching" of Lyft drivers--well that's great. The drivers should go to whoever pays the most, and agreeing to not poach drivers would be anticompetitive.

I think Uber is great. I just see no reason to aggrandize them or to demonize the cab industry.

are we all forgetting just last week (i think at least) both companies accused each other of the same thing here... only Uber's documentation about it leaked.

Seems both are up to no good.

The whole premise of this article is that "siphoning drivers away from Lyft" is wrong. Its not. Isn't "not poaching" what everyone is up in arms about when Apple and Google did it?

Making a better offer is fine. Using your competitor's service to summon their employees so that you can make a better offer is, at least, impolite.

Canceling rides is the bigger problem.

Exactly. That's more than impolite, it's unfair IMO. If the only way they can offer a better service is by screwing with the competition, well, they aren't doing a very good job then. Otherwise they could spend their time looking for ways to improve their services.

If taxi drivers actually adhered to those "common carrier-esque" restrictions, they would have a valid point in expecting Uber to follow the same. As it stands, you're speaking like someone who hasn't actually endured the experience of needing a cab driver to adhere to them.

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.

> Yes, the taxi companies are trying to shut down Uber and Lyft using regulation, but they are just trying to enforce a legal monopoly granted to them by the cities in which they operate.

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.

You've obviously never been a black person trying to hail a cab. I can't tell you how many times I've had taxis refuse to take me across a bridge (which is part of their responsibility that comes with the monopoly). The taxi industry brought this on themselves and I'll be glad to see them go.

How is Uber addressing this? If anything it seems like it would be harder for them to enforce this that a regular taxi company.

Drivers don't see you when they take the ride so there is no racial bias. When they refuse to take you across abridge, they leave a digital trail so you can contact Uber about the specific person that refused the ride.

thats not true. Driver sees the user details, and the ratings, before accepting the ride offer. The driver has an option to not take the ride offer.

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".

> not all companies that break bad laws are good.

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.

>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.

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.

> Goldman sachs are probably simply buying up uber stock and dumping medallions on easily duped investors

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.

That's a bad analogy. For years medallions were owned to be flipped and sold at a higher price. Owning a taxi medallion is like owning a McDonald's franchise in the middle of a city where property values have skyrocketed to the tune of 20% per annum for the past decade.

You mean like any boomer who bought a house in NYC or SF or DC in the 1980's? The point is that taxi medallion owners aren't Goldman Sachs-esque financial fatcats. That's an absurd part of the Uber versus taxi cab narrative.

they don't have goldman-sachs-esque assets, but they have experienced goldman-sachs-esque asset growth, and they have done it in large part colluding with the government. (http://www.huffingtonpost.com/2009/06/02/government-sachs-go...)

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.

They didn't "collude" with the government. The whole premise of taxi medallions was to limit supply to maintain taxi driver wages and limit oversupply of cabs in a crowded city. Indeed, the number of cab medallions issued has outpaced population growth in NYC over the last several decades.

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.

>Owning a taxi medallion is like owning a McDonald's franchise

Only if McDonald's was the only company that was allowed to sell food.

Orthogonal to the point he's making.

Not to the point he was replying to though - the medallion system was being talked about as a way of controlling competition through regulation. That's not what's happening with McDonalds.

> 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.

Have you considered not using it?

What it boils down to, though, is it doesn't matter how much investment money you have if you're declared to be operating an illegal business and ordered to shut down. At this point, Uber and other ride-share companies are still in that danger zone. They're operating against the law in many cities (mine included, not that I'm complaining), and could be fined or forced to close at any moment.

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.

> They're operating against the law in many cities (mine included, not that I'm complaining), and could be fined or forced to close at any moment.

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.

It's interesting to me that the main defenders of the status quo with respect to taxi regulation tend to invoke themes of social justice and egalitarianism (and criticize, either overtly or covertly, their opponents' privileged perspective).

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
Or take this OECD Policy Roundtable debating taxi regulation from 2007: http://www.oecd.org/regreform/sectors/41472612.pdf

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 out of all of those arguments, maybe one has anything to do with these egalitarian concerns that Uber/Lyft critics invoke. And many of these arguments are very directly obsoleted by Uber/Lyft-like business models (particularly the ones concerning incomplete information prior to the hail).

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?

I note that at least in theory, "guaranteeing availability of off-peak and low-density service" is indeed at least partly about providing transit to the "underprivileged" -- that is, to people who live in unpopular/poor parts of town or the elderly who want taxi transit during low-demand parts of the day.

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?

> Why are these social arguments missing from pre-2009 (when Uber was formed) literature?

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.

> probably purposefully ignoring

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 apologize, I didn't mean to imply dishonesty, but my initial Google search showed very different results than yours and the tone of your last paragraph didn't exactly confer respect.

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.

> 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[0]:

"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 probably should also apologize for getting as snippy with you as you picked up on.

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).

Uber could write itself a code of conduct that states that they maintain X accessible cars per Y inhabitants in any covered area. And that they will cover the entire region with certain price controls (which is a form of network neutrality), not just the meaty routes. And so on.

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.

This is such a beautiful, earnest response I read it aloud to my wife. Thank you for eloquently describing your experience of a kind of helplessness in the crevasse between the lucky few and the needy many. I am touched by your writing.


> 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.

Ha ha. In Sydney, at least, this is a joke.

I never met more scammier taxi drivers than in Sydney. Once you stated you destination they would always ask which way you wanted to go in order to check if you knew the way. If I didn't they would almost always take a longer route than necessary. From the airport on a quiet day I would say don't take the tunnel I don't want to pay toll. They would sometimes take it anyway despite my instructions and we would then have an argument because I refused to pay. You can be sure many people don't. Worst taxis ever.

Never been to Prague then?

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.

Yeah they are infamous. Budapest isn't any better.

Funny story involving Prague mayor...


Amsterdam is very bad as well.

Echo that. I think a "regulated" taxi driver actually killed a tourist a few years ago.

It is a joke everywhere in the world.

At least everywhere the taxi market is large enough to make it worth it for taxi companies to influence government to make sure the taxi regulations favor them by increasing the barrier to entry for would-be competitors.

I think that how "big" the taxi business is is mostly a red herring, and that viewing it as a cynical ploy of taxi companies is an un-nuanced reading of the situation.

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.

> 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.

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.

Australian taxi services are close to being a monopoly.

In my opinion, all it would take for Uber to be shut down is a sufficiently big enough fine for violating the law in one or a couple cities. If they got hit with a $5000 per passenger fine in a major metropolitan area with thousands of passengers, how long with the major investors keep pumping in money? There's little hope of a return on that kind of loss.

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.

That would shut them down in the cities that instituted the fine. But they'd probably keep going elsewhere and use their popular support to try to undo the change.

There are bastions of sanity in the world. My city government and Uber worked together to put Uber/Lyft under legal regulation while at the same time doing a small amount of deregulation of taxis to help competition. There was a _healthy_ amount of dissent which made reasonable points and the measure eventually passed.

It may be cold half the year in Minneapolis, but I think it makes people a little more reasonable.


That's probably why they're employing such shady tactics. They need the fastest growth they can achieve, in order to become huge enough and making it difficult for the regulator to shut them down by means of law.

> the regulator

Which regulator?

That's probably why they're employing such shady tactics. They need the fastest growth they can achieve, because those new 911 turbos aren't going to buy themselves.

There ya go, fixed it.

I disagree, I think business size matters a lot. Uber may not be there yet, but the nature of legal violations changes for big companies. It's like they say: if you owe the bank a million dollars, you have a problem. If you owe the bank a billion dollars, the bank has a problem. Similarly, a sufficiently large business breaking the law is more a problem for the government than the business. Just look at how much trouble e.g. Bank of America got in for all their illegal shenanigans surrounding the mortgage crisis.

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.

nothing would change

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.

>number of drunk drivers would go up

>bar industry would see a hit in their clientele

Back to pre-Uber levels, presumably.

It'll mean less bars. More bars have opened than closed since Uber has been around.

I haven't heard of many bear attacks since Uber started offering their service either. Must be connected.

I guess I should say that the growth of bars seem to be exceeding the growth of parking lots. Does that mean more people are carpooling or taking cabs? Maybe. But it could also mean Uber has an effect.

Frankly, I'm not sure how the country survived before Uber.

More bars have been opened during the economic recovery after the GFC?

Aereo is fighting a much larger battle. It's the difference between fighting a house cat and a sabretooth tiger. The problem with Aereo is not that it is so good for consumers that some people aren't getting "their cut"...it all boils down to advertising. With Aereo, it's no longer truly possible to tell someone how many homes they are reaching with advertising dollars. How are network executives supposed to quantify how much they can charge to advertisers, now that they have even less of an idea of the effect of those advertisements? Also, since Aereo was being considered as on-par with the rest of the CATV providers, why weren't they required to pay retransmission fees? Although I really did believe in Aereo's promise of a better future, and I absolutely think that the future of television is streaming linear broadcasting, I always knew that it was going to be killed off by legislation because the cable industry is SO corrupt that there is literally no room for disruption.

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.

>I've been mystified how Uber's kept up their "Underdog" mantle for as long as they have.

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.

I agree with the idea of what you're saying, but Hyundai vs Honda seems odd to me. I've owned and liked 2 Hyundai but really don't understand why people buy Honda's.

If Uber is already this evil now, what things can we expect once they go into ground transport in general with self-driving cars? I don't want to trust a nefarious company to drive me and my kids around!

How can their investors, of which some are excellent startup investors, be fine with this. Is there no guidance at all??

> I've been mystified how Uber's kept up their "Underdog" mantle for as long as they have.

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.

I see Uber as wanting their own future monopoly. They aren't some egalitarian democratic plumb bob making the world better for everyone. They are a national and trans-national transportation monopoly that has deep brand recognition while forcing drivers to play or pray, same schtick as the taxi companies. Why else would Goldman Sachs and Blackrock be involved?

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.

Or have cities provide Uber-esq services in lockstep with their other transportation services (bus, light rail, etc).

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.

This is a great idea. A public clearing house utility for transportation. Seattle just started one of these to integrate public and private parkinglot availability. Why not for personal transit? it would be like the nasdaq of transpo.

Let the requirements gathering begin.

Good catch.

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.

Uber wins on latency and that is it. An actual taxi costs less.

I bet Lyft doesn't think it's silly.

Don't let the fist bumps and mustaches fool you, Lyft has raised over $300,000,000 in VC and has tried to poach many an Uber driver. There's no one to feel bad for in this race.

Except probably the drivers.

Why? The drivers are in huge demand (hence trying to be poached and getting hefty starting bonuses). In this scenario they are being paid to drive around an Uber recruiter. If they don't want to work for Uber they still get paid for a ride they wouldn't have had otherwise.

Except when they actually cancel the rides. The drivers lose in that situation.

Sort of. Without seeing the data I can't say for sure, but I'd bet the cancellations occur almost instantly after seeing who the driver is (someone who already had been pitched). They don't really lose in that case because they haven't done anything other than accept the ride.

I thought the cancellations were for the purpose of looking statistically similar to the average rider. If that's the case, it's no difference to the drivers.

Read the Uber playbook carefully.

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.

Actually, I know drivers who use multiple services and get along quite well...

Poaching drivers is one thing. Canceling rides is another.

Can you point me to evidence that Lyft is also poaching drivers and/or cancelling rides? This is the first I've heard of it.

Every company is, to some extent, an underdog against governments.

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!

... are you casting Gilded Age robber barons as underdogs?

I don't understand how anyone could get that from my comment. Could you elaborate? I'm honestly confused.

He did go a little away from the topic, but you did (roughly) say that, even if it wasn't the crux of your point.

> " 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

They would be excluded because I wrote "is," which is the present tense.

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.

>I've been mystified how Uber's kept up their "Underdog" mantle for as long as they have.

They now have a guy from the Obama campaign (David Plouffe) working on their PR.

He must be really good considering he hasn't even started yet.

"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"


I know this may sound hyperbolic, but I hope that others join me in finally getting around to installing the Lyft app today.

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.

I was in San Francisco for a few days in mid June.

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.

Having used both, the one thing that keeps me from exclusively using lyft is coverage. Around Atlanta suburbs they don't seem to have much coverage, not something that can be fixed easily I guess.

On at least two occasions in San Francisco I've seen someone with the Uber U on their windshield and a pink mustache on the dashboard, ready to swap out. Don't know how widespread it is, but it seems pretty easy for drivers to work both networks.

I was in SF a few weeks ago (for YC Hacks, actually) and virtually every one of my Lyft drivers (~4) was a driver for both Lyft and Uber.

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.

Lyft has a similar policy re: stars.

The drivers' experience carries far more weight than any policy on paper, though.

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.

This is what I imagine drivers doing. In NYC, if you're in the outskirts of the boroughs you're probably better off as a driver being part of both networks.

Can confirm that some drivers are on both networks (Inland Empire). They even offered discount codes from both Lyft and Uber!

I'd love to take my business elsewhere. Particularly to Lyft however when I tried to sign up the other day to try it out I got a message that my account was banned and I had to contact support. I believe it said I had a duplicate account. I've never used Lyft.

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.

Same, pretty sure I've been shadow-banned by Lyft for the past year or two since it never shows any available cars in the middle of the day despite living in downtown SF (and plenty when my roommate opens the app next to me). I'm very cordial in any rideshare service I take, and have a very high Uber rating over hundreds of trips (though that large quantity is a direct result of not being able to use Lyft). I've always joked I was caught up in the counter-Uber net, because I see no other reason why I wouldn't be able to use the service.

Or uber "borrowed" your account info and used it for one of their Lyft smurfs...

Is there any evidence of this? That is going beyond anything I've read, in my opinion.

Nope, it's pure speculation based on multiple reports of seemingly baseless shadowbans from Lyft. But given uber's recent behavior Lyft might want to look into this just in case. I have no idea what the relevant laws are but parking a username seems less much risky than making fake calls, yet it could easily have similar upside for uber.

The logic doesn't sound that far-fetched if you've read the linked article and find the business case plausible.

You honestly think Uber would risk their customer's credentials to shut out a competitor they are already trouncing by most accounts? I would consider the risks of using customer's credentials in such a careless and ridiculous way many magnitudes higher than the potential rewards. It's much safer to buy burner phones and assume fake identities. Sorry, it just doesn't make sense without some evidence to back up it up.

Credentials? They would just need a username, unless I'm mistaken?

> 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.

Slightly negative PR for having the monopoly in the long term? I'd take the negative PR any day.

Jail time for fraud?

Have you seen people go to jail for parking domain names? We aren't talking about stealing credit card numbers here.

ewww... I guess I should take the time to contact support.

I keep hoping they release a Windows Phone App, or a mobile website with service functionality.

My sympathies - it was exactly issues like that which drove me away from Windows Phone (7) back to Android. I hear it's a lot better these days, but all it takes is one missing app...

I switched back from WP8 to android a couple of months ago, and I must say the better app selection has been huge.

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.

I got my second Windows Phone (in spite of developing exclusively on iOS myself), and I don't miss most apps. It's amazing how many good third-party apps work with the cloud-backed apps I use on my iPad. Instapaper, Trello, Simplenote, etc.

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.

yeah, the timeline is usually: ios--->android--------->wp

No, the timeline is usually iOS ---> Android.

No doubt. I've found that Lyft is the one major missing piece for me, but because Uber has an app (and has previously had a full-functioned mobile site) that it wasn't a deal breaker. I'm probably simpler than most around here in my wants from my smartphone though.

Does anyone know if this is still the same situation on Blackberry?

It really does seem a two-horse race between iOS and Android.

I have a Windows Phone and I can't even cash checks. Sigh.

That doesn't make any sense. How can a phone cash checks? No phones have a cash dispenser.

Just a wild guess, grandparent either misspoke or uses the same word to describe cashing and depositing checks.

Either way the intended meaning was clear enough not to warrant a flame.

You don't say it directly, but I'm inferring that you're suggesting Lyft because you disapprove of Uber's tactics as described in the story.

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.

Not being the GP I don't know, but I'd wager it has something to do with the whole planning to disrupt their usual business part of it. It's not just recruiting, it's running interference.

Conspiracy to commit fraud and disrupt business strikes me as eligible for a RICO prosecution.

I have used Lyft in Seattle and am very satisfied. I've found Lyft a much more fun and relaxed ride than Uber.

Uber does have an explicit SUV option (I don't recall Lyft having this), which has proven to be a boon upon occasion.

Just downloaded Lyft app for use in Kansas City AND signed up on hn after lurking for years! Feeling super motivated today apparently.

Does Lyft still require a Facebook account?


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.

Oh, great news. that's what kept me from signing up in the first place. They replied to my comment saying they were "inherently social" as if you can't be social without Facebook.

Huh, that's interesting. I assumed it was far more common for people to have both. Whenever a price drop is announced, I switch, and it's been a pretty good heuristic so far. Also lyft predated uberX, so I would've thought that many people would have it from back when it was essentially a different service.

I absolutely love using Lyft in Seattle.

I also use Lyft and Uber in Seattle, and I much prefer Lyft.

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.

Maybe I'm different (hey, it's possible), but I like UberX for the inverse reason. When I do one of the "ridesharing" things, I'm usually half awake, coming off of a shift at work, and I just want to go home or wherever else I'm going. I wish there was a socially acceptable way to say "I'm grumpy and don't want to talk, please just hush." Since Lyft has a reputation for being more open and friendly, I stick with Uber/UberX because they're usually quiet drivers.


Pretty simple. Cancel within 5 minutes for free.

> Pretty simple. Cancel within 5 minutes for free.

Don't do that -- it screws over the driver who has to burn gas.

Please be sure to read this article before commenting.

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?

Yeah but they did cancel a bunch of rides and that's the upsetting part. Their reasons might have been different than originally assumed but that doesn't change the egregious nature of their tactics.

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.

Lyft says that Uber employees have canceled 5000 rides since last October. That's like $100k in lost revenue -- it's nothing. Definitely not some big plan by Uber to undermine Lyft.

It's also lost revenue for the drivers who were on their way to pick up the recruiters. I think that's the part most people are upset about.

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.

Much less than that. They only lose the time it took to drive to the person, not the time they would have spent driving that person to their destination. The "drop" is way less than $20, so we can assume the cost of a canceled ride is too.

This is like $10k in revenue.

If someone defrauded me of $100k, I wouldn't call it 'nothing'. Fraud is a felony. People need to go to jail for this.

That's a potential software developer's salary, whose contributions are certainly worth more than that - I'd call it substantial.

That's not all. Let's say that software developer would have produced $200k in value for Lyft. But that 200k could hire two more software developers! By induction, Uber has cost Lyft an infinite amount of money.

Point #2 is technically correct, but I think it's perfectly legitimate to block people from recruiting your employees at your place of business, while they are working.

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.

Except they're not Lyft employees. They're independent contractors. They set their own schedule, choose where they wish to work, ect...

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.

And 4. Uber contractors cancelling rides for drivers that have already been recruited

5. Uber drivers organizing in chat groups to keep track of Lyft drivers in the area that have already been tapped, to prevent canceled rides.

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.

From the article, the organization was to ensure that they didn't hit up the same driver multiple times, giving away the scale of the game they were playing. Clearly they don't care about canceling rides, since they were literally just in the news for intentionally canceling rides for no reason other than to make Lyft and their drivers lose money.

Where did you see anything about Uber canceling rides specifically as a tactic to make Lyft lose money? Everything I've seen has indicated that the rides were canceled because the Uber recruiters realized they were calling a Lyft driver that had already been spoken to.

No, that's not it. They're keeping track of Lyft drivers in the area so that they know who to cancel, not so that they can avoid canceling rides.

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.

Can't stomach unethical, morally bankrupt anti-competitive tactics. Sabotaging a competitor's services distorts the free-market, ultimately harming consumers. If Uber aren't suitably punished by the courts, I hope at least their reputation is tarnished in the court of public opinion. Although that's not clear since "there's no such thing as bad publicity" and Uber's been getting a lot of that recently.

Either way, I'm at least glad I've never used Uber yet, and now never will.

Sabotaging a competitor is precisely how the free-market operates that's why we have regulations, because a free market isn't actually free or desirable.

I'm so tired of people who don't know what "free market" means making up their own definition and then saying it's a bad thing.

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.

>I'm so tired of people who don't know what "free market" means making up their own definition and then saying it's a bad thing.

"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).

I disagree with your defintion in the google-Apple example and so does Wikipedia. It's pretty clear that if the government regulates it it's not a free market anymore.

--- 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. http://en.wikipedia.org/wiki/Free_market ---

The wikipedia quote doesn't seem to support your point, though.

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.

Enforcing anti-trust regulation depends on the industry:

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 Google and Apple make an agreement about smartphone pricing, then we might not have a free market for cell phones.

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.

Exactly this. I have to explain this to people all the time. A free market is not the same as anarchy. Regulations are involved in making a market free by preventing non-governmental anti-competitive forces from distorting the market.

Right. Most libertarians would agree that courts play a vital role in enforcing rules/laws that govern across specific areas relating to contracts - specifically the areas of duress and coercion.

So in the end, what you're saying is that he's right? I took his comment as a broad generalization, not some flippant slogan via "free market is a fantasy economics concept pretty much exclusive to all who read Ayn Rand and vote Ron Paul". But you already knew that.

No, he did a great job of explaining that it's not one or the other, which is what the earlier comment quite blatantly made a claim of.

No they didn't.

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.

That depends on whether you define free market as anarchy or free of regulation or whether you define it in the original economical theory sense: a lot of competitors with essentially same product and everyone instantly know all available into (so everyone buys cheapest of the same).

Monopoly is not free market in the original sense, even if it came out from unregulated competition.

" a lot of competitors with essentially same product and everyone instantly know all available into (so everyone buys cheapest of the same)."

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).

Depends on what you mean by "free market". There's the free market that Adam Smith talked about, and there's the free market that Ayn Rand talked about.

> Sabotaging a competitor is precisely how the free-market operates

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.

Either way, I'm at least glad I've never used Uber yet, and now never will.

Which, of course, is you exercising your market decision to not use Uber.

Interesting to hear Travis Kalanick's response to the Lyft accusations last week where he mentioned that "competition is better for the consumer, better for the driver"

@ about 4:40 in this video:


Agree. Goober's whole business model was about leveraging our good will from smashing the taxi cartels.

Now this? Nice "pivot" guys.

Uber has a culture of breaking the rules. As beneficial as that was and is in their growth, it's not surprising it mutates in less pleasant ways as they grow. The same actions that seemed benevolent before, will seem more and more malevolent as they look less and less like an underdog.

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.

It will be interesting to see how long a company with that culture can survive. Uber may even be able to flout federal law because of their extensive passenger & travel data. (Suspect Larry Page got off easy on the illicit drug advertising because of this, others would expect to do hard time.)

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.

"will seem more and more malevolent". Are you saying its not actually malevolent but is just being perceived as so because it is aggressive ?

I only meant that how we look at them changes with their size, and if they want to remain the "good guys" their tactics should change too.

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.

The way people perceive actions tends to change based on the status of the person(s) performing the action at the time the action was performed.

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.

This is a really dumb strategy though, breaking the rules means not being constrained by the social norms and trying something new, however, it doesn't mean being an a-hole and doing purely malicious stuff at all. That's very unentrepreneurial.

>The customers will end up asking for more regulation in a few years

Consumers hardly ever ask for regulation.

I was thinking of taxi legislation as the example (EU city example, can't speak for the US). Taxis in my city need to be registered and the drivers need to have a taxi license, the cars need to have prices clearly listed on their window, as well as the driver's ID visible in the car. All of this is due to consumers getting repeatedly ripped off, complaining about it to the city's politicians, which then wrote up the regulations. The consumers are much better protected now, and have a clear channel for complaints.

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.

Really? My view is the other way around. Customers ask for more regulation and businesses are against it. Some of the consumer requested laws include national laws like the Pure Food and Drug Act and Clean Water Act, state laws like various lemon laws, and local laws like rent control.

> businesses are against it

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.

I speak of course in broad generalities, and not to each and every company or consumer. To start, all members of a business are also consumers, so there is no clear cut distinction between the two, and some consumers are philosophically against all regulations even without being in control of a business.

You're right, the government just steps in and regulates because, uh, it hates business?

{rolls eyes}

IMO Uber's greatest threat is someone coming along and making a similar service and licensing it to cities so that the cities could control who becomes a driver, total number of drivers, as well as integrate with traditional taxi services and take a cut of the revenue. Then all the sudden Uber et al. are competing with a entity that has the ability to legislate them out of 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.

http://gocurb.com/ has been doing exactly that for many years.

Curb (TaxiMagic) is just a (bad) dispatch-management service; it's not really built into any taxi system, and doesn't provide any sort of feedback or quality control on the ride experience.

There is a feedback mechanism in Curb (I'm a former employee). For some taxi companies, LA for example, Curb has very deep links into the dispatch system and can choose not to offer rides to certain drivers directly - so enough bad feedback and the taxi driver will no longer get Curb ride offers. For other taxi companies reviews get reported back to the taxi management and they can act on the report as they choose (some companies act quickly and promptly and some others don't do anything).

And Hailo (?)

But why aren't they succeeding?

They are succeeding, but not to the extent of Uber/Lyft. Regulated taxi industry pricing is much higher than lyft or UberX pricing. If taxis get de-regulated and/or UberX/Lyft get regulated then Curb/Hailo/etc will be well positioned.

> Regulated taxi industry pricing is much higher than lyft or UberX pricing.

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 suppose it depends on where you are using the services. In Los Angeles, after you factor in tip for a taxi driver, Uber and Lyft are about 40-50% cheaper. Here's Uber's analysis of the pricing in LA http://blog.uber.com/LAuberXpricecut

Uber controls its fate, though its success may be stymied by municipalities. Taking the business directly to cities puts the onus on them- a much harder proposition than providing a good service. I know which business I'd rather run.


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.

Price comparison SF:

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.

Anecdotally, I've had better experiences with Lyft as well. Uber's customer support has been terrible in comparison.

Agreed. I can't even sign up for their app on Android using Google account and Google Wallet. I emailed their support email a week ago and haven't heard anything back. The Wallet dialog pops up but I can't click anything. Looks like I won't be signing up with Uber anytime soon.

I just got back from the U.S.

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.

Am I the /only/ person commenting that has had a better experience with Uber? I am having a hard time thinking about using Lyft over Uber in the future (West LA area).

Same here... west LA too. UberX usually has more cars available and the Lyft ones are usually older models.

Is the comparison usefull? I think many drivers use both Uber and Lyft.

And at the end the good care belongs to the driver not to the services behind them.

Is it just me or does "growth hacking" and having good "hustle" actually means doing sleazy things and being a dick.

I don't understand why Silicon Valley and Startups think acting like this is not only acceptable, but should be applauded.

I also don't understand why VCs pick companies that are clearly courting a huge lawsuit by providing a platform for people to ignore local laws.

Probably because they see how well AirBnB is doing in the same vein of "ignoring local laws".


I think that they found a sweet spot where they can make a lot of money and still get away with it, because companies will get acquihired and VCs recoup their investment before people get fed up and start complaining. And "growth hacking" and "hustle" and the like are just ways of making those practices not trigger pangs of conscience, the way saying "you're being an antisocial, malicious jerk" might.

Every Dark Pattern is the brutal end of blindly following A/B testing.

It is the brutal end of blindly following A/B testing with the bottom line as the controlling variable.

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.

> If you were to A/B test for user satisfaction instead (much harder to measure) you'd get a totally different result.

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.

It doesn't have to mean those things, but yes, it often does unfortunately. I still think there are some white hat techniques that can get results, but I'm no expert.

If you set aside the hyperbolic title, this actually is an exoneration of the worst things that Uber has been accused of: namely they were NOT pranking or trying to deliberately mess up Lyft.

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).

Lyft has stated they've had over 5,000 CANCELLED rides, meaning Uber is deliberately trying to mess up Lyft. If you don't think the cancelled rides count, how can you say that aggressively recruiting its drivers, and as a by product, reducing the earnings of the drivers/Lyft, is Uber not trying to mess up Lyft? I'm not saying its illegal, but its clearly Uber trying to win the market by shutting out Lyft.

5000 cancelled rides over a year does not mess up a system that reportedly has a millions of trips per year.

Those are the rides that are cross-correlated with known recruiters. The actual figures could be more. I know for a time in February I would get tons of suspicious pings, and my friend who was a dual driver said, "oh, that's Uber fucking with you"

I don't think the argument here is over the scale or the percent of rides that were fake. The argument here was "Is Uber trying to shut down Lyft, through a variety of tactics?". I'd have to say yes, they are trying their best to block Lyft out of the business by limiting the key resource, drivers.

> Is Uber trying to shut down Lyft, through a variety of tactics?

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.

Straight up, this is a key point. Lyft is in 64 cities. 5500 canceled rides over a year is peanuts. That's 1 cancel per city per 3 or 4 days. I can't believe this is even a story.

It's a story because it's an abusive tactic. It harms individual drivers to try to benefit a very wealthy company.

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 love lyft (and also drive for uber)... I have no doubt in my mind that uber did this (and if I get deactivated by uber for posting this I don't really care, they've lost so much money on trying to recruit me it will take 10 more months for them to recover their investment).

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.

Why were they trying to recruit you if you were already driving for Uber?

They tried to recruit me before I drove for Uber? I do now, but I "gave" the recruiting bonus to my friend who was a dual driver and not the smarmy recruiter.


It sounds like you don't understand how Lyft and Uber work. You have no control over which driver you get; the driver app lets all the drivers in your area (and an increasing area over time) know that you want a ride. Whoever clicks "accept" first gets it.

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.

They don't know which driver they'll get assigned to them until they get the driver assigned to them - there's no way for them to check drivers against the spreadsheet until the ride has been requested.

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