Because they have the money and lawyers, so they can break the law.
They like to call it Disruptive Innovation or some other fancy term.
The problem with Uber is they think every country is the same and welcomes them. I under that might be the case with U.S, but it doesn't mean taxi system in every country is broken and they are welcomed to "fix it".
This could happen if Uber manages to be cheaper by avoiding taxes or breaking speed limits; or in general does something that's good for the customers, but bad for society, and so is forbidden.
I don't know that that's the case. In other places, it seems to manage to be net good for the customers, good for society, and mostly only bad for existing taxi companies. But "people are using Uber" is far from sufficient evidence to say that taxis are crap.
That's a false argument - "If Coke isn't crap why are citizens drinking Pepsi?" The Taxi system is not crap everywhere. There are certain markets that are underserved. There are also plenty of markets that Uber operates in that have an adequate Taxi system.
It's cheaper because it socializes the costs - usually Taxi drivers have to make a licence that involves knowledge of the area and likely other aptitude tests, as well as maintenance of the cars and insurance. Then there are laws that prevent working below a certain minimum income rate in Europe that also affect Taxi drivers as most of them don't operate on their own.
Uber moves all these responsibilities to the owner of the car, now you are your own business man you face the majority of risks and Uber still gets a big chunk of profit. Uber doesn't care about your maintenance costs.
Sometimes it works, often this encourages dangerous behavior to still have profits e.g. skipping maintenance, safe working times, vacation... Uber doesn't care that much about this. A lot of people work almost full time without enough compensation to warrant the stress.
Besides that European countries - at least the bigger cities - have often excellent public transport that is inexpensive and mostly works. Taxis supplement that and Uber is trying to compete on price there, something that abuses the drivers in the long run.
I hope Uber is kept out of Europe or is regulated to protect the drivers and users.
> Uber is directly providing Uber drivers with knowledge of the area (via maps)
It's not Uber who's providing the knowledge, but Google or whatever (freely available) mapping backend the drivers / Uber App use.
> requires maintenance of cars
Do they require it, or do they "require" it like proper insurance?
> Assuming I take an Uber, exactly what costs are paid for by someone other than myself, the driver and Uber?
The risk of uninsured driver getting himself (and you) in an accident in an improperly maintained car.
Secondary costs of disruption (the negative kind) of transportation market due to one player outcompeting other by acting illegally and getting away with it.
Destruction of provisions for those "worse off" in said market - i.e. it's fine if you're young and live in the middle of the city, but try getting an Uber as a grandma living on the outskirts. Drivers will refuse such unprofitable rides.
Weakening of social trust in rule of law as a successful business keeps being successful by ignoring the law and attracts copycat (you could say the authorities are to blame for not reacting swiftly enough, but then again you need a criminal doing crime to show inadequacy of the law).
> Secondary costs of disruption (the negative kind) of transportation market due to one player outcompeting other by acting illegally and getting away with it.
This is circular logic. Your only argument seems to be that
uber may not actually require insurance. That may be true, but it's also easy to fix.
>try getting an Uber as a grandma living on the outskirts
Where I live (Warsaw), they just introduced a "leaving the city" fee, which means the drivers are incentivised to take those trips. And it still probably comes out about as much as a taxi.
Full disclosure: I just accepted a job offer from Uber.
Uber pays a significant amount of licensing fees to Google for use of it's data. Further - Why would making use of a freely available mapping backend be 'socializing the cost' in a way that is unfair competition to taxis?
Taxis refuse unprofitable rides. Uber hides your destination until the driver picks you up, and keeps track of drivers that cancel. Ever tried to get a taxi in the slums? Wasn't possible before Uber. Ever try to get a taxi as a black man? Was pretty hard. Uber is imperfect, and your questions of how good their insurance is are valid, but everything else you've pointed out is a problem that the Taxis had, generally worse, not one that is new to uber.
It's not Uber who's providing the knowledge, but Google or whatever (freely available) mapping backend the drivers / Uber App use.
Yes, Uber does pay other third parties for services. That's not socializing the costs. Similarly, a bar paying Kingfisher to manufacture beer is not "socializing the costs" of providing me with entertainment.
Do they require it, or do they "require" it like proper insurance?
I've only used Uber across 3 separate continents, but I've never rode a poorly maintained Uber.
Also, even if they didn't, this isn't "socializing the costs". The cost of poor maintenance is born by the driver and the passenger.
Destruction of provisions for those "worse off" in said market - i.e. it's fine if you're young and live in the middle of the city, but try getting an Uber as a grandma living on the outskirts.
That's not "socializing the costs". At most, that's privatizing something that you would prefer to be surreptitiously socialized. Also, Uber makes it easier rather than harder for said Grandma to get a ride.
As for "Weakening of social trust in rule of law", many things do this. For example, black Americans and others violating unjust laws as part of civil disobedience has the same effect. Is protecting respect for the law truly an important value when the underlying law is unjust?
The risk of uninsured driver getting himself (and you) in an accident in an improperly maintained car.
This should be addressed regardless of Uber's existence. In Poland we have an Insurance Guarantee Fund (Ubezpieczeniowy Fundusz Gwarancyjny[1]), an institution which pays out judgements to people harmed by drivers without proper insurance.
The Taxi fares were artificially raised a lot by Orban a few years ago and the prices are fixed. I stopped using taxis at that point and was forced to bring people to the airport myself. Uber was welcome by all the people in Hungary, with much nicer drivers as the taxi drivers themselves.
I think the underlying question of parent is: Uber is illegal in many European countries, so why did they back out of Hungary as opposed to, say, Norway?
Hungary's current government takes a dim view on a number of topics and strongly favors the rule of law, or the appearance of enforcing those laws. In 2015, refugees and migrants were walking across the border with Serbia, so the government installed a wall topped with razor wire to corral them towards the designated entry points [1] In 2010, the country's laws for press and media were significantly changed, drawing widespread EU criticism [2].
(I'm providing context, not wishing to engage in political conversation)
I think Uber made a judgement call that the Hungarian government would likely enforce the laws rather harshly, and did not want to deal with the consequences.
The background story is: in Hungary, about one year before Uber's entry, large taxi companies lobbied for a very heavy regulation on transport services that fixed the rates and raised drivers' entry level significantly. The said purpose was to kill off the "taxi hyenas", but the reason and effect was to end competition by enforcing a uniformized premium level service. "Taxi hyenas" were replaced by the "taxi maffia" -- but not just the hyenas, but small and (to some rate) innovative companies were gone out of business.
The taxi drivers who remained in business were in for the trade-off of investing into compliance with new regulation but making more money than before. So old school taxi was not simply lingering in its naturally backward state as in other countries, but there was an artificially fortified status quo.
In that situation, when value personal transfer reappeared with Uber, it was therefore even more sore for the taxi companies and drivers, who took their position and the protection of their investment granted by the state. So what happened is nothing else just the taxi maffia enforced this grant and the state complied. Both sticking to decisions that once made (no regard of consequences), and heavy state control is quite to the taste of the government -- thus they complied happily.
And once the government puts its weight into something, there is no question it's gonna happen. The only surprise element is that Uber resisted so far.
That's a good question. Possible answers are that Hungarian market may not have turned out profitable enough for Uber to fight for it, and/or maybe authorities in Hungary are swifter than in Norway - similar to how Poland is still struggling with Uber while Germany managed to quickly ban the illegal parts.
I still don't understand how Uber is not a taxi service in the USA. I guess it's different when you use a smart phone instead of a land phone. Yeah I know the drivers are not technically employees but come on, we all know it's a more convenient taxi service.
they do the same in many countries and call it disruption.
for example, Netherlands, where they were banned but ignored it. their office got raided few times by police and there is ongoing criminal investigation.
No, UberPoP is banned (and hence not available anymore). UberX and UberBlack are not banned and still operating (the drivers have taxi licenses and blue number plates).
I used Uber recently for the first time recently in San Francisco and San Diego (I was at the Decentralized Web and NAACL 2016 conferences) and I thought Uber was a nice service. Each of the 8 times I used Uber I sat in the front seat to talk with the driver. All 8 drivers were fairly upbeat about being able to earn extra money whenever they had some free time. A few said that it was their full time job.
I had a mild argument with my son about Uber (he is a fireman and a union guy). He thinks that Uber is really unfair to union taxi drivers who jump through some hoops to get licensed, etc. Besides wanting good service, I rate businesses like these on how much profit is captured by the person doing the work vs. the company that they work with. I don't have any data on this, so I am judging Uber based on the low cost of shared ride service and the general friendlyness of the drivers.
> He thinks that Uber is really unfair to union taxi drivers who jump through some hoops to get licensed, etc.
So they were forced to jump through ridiculous hoops, so should we force everyone to follow the same stupidity?
If anything, the solution is tear down these bureaucratic barriers and open up the competition for everyone. But you'll never see the taxis supporting this, because they know they'll lose, and would rather have their business propped up artificially using governmental force.
Taxi is a perfect market (exchangeable, homogenous product, low barriers of entry) so all profits will be competed out. But since drivers also need to make a living, everywhere in the world they have lobbied for protection so that they can keep some of the profits. Without that, they would work for (almost) free since many people would have an incentive to enter the market.
Since they are also providing a service to the public governments have granted them extra protection.
This is a system that has been working for a long time, and in the long run, Uber will not be able to change this.
Competition from Uber and Lyft is so fierce that New York cabbies are going out of their way to be polite, engaging in chatter with riders and being helpful with packages, luggage and giving extra care to senior citizens.
> I had a mild argument with my son about Uber (he is a fireman and a union guy). He thinks that Uber is really unfair to union taxi drivers who jump through some hoops to get licensed, etc.
I have multiple problems with ridesharing services:
1) They foist the risk off onto the contractors while keeping all the profit themselves. They could have been a well-run national taxi company that serviced suburbs (and would have had STAUNCH defenders), but that won't get you unicorn valuations.
2) Most of them are using VC money to subsidize the ride costs. This is fine--until they run out of money. Then the cities will be left to pick up the pieces when suddenly there aren't enough taxi drivers anymore to service the demand. Uber and Lyft actually tried to use this as leverage in Austin to get their way politically. So, the threat is not theoretical. These companies are not trying to service the customer; they are trying to become the taxi monopoly.
3) Uber/Lyft/etc. drivers often don't comply with local laws surrounding carriage services. This includes licensing and insurance but also includes simple things like "Where in the airport am I allowed to pick someone up?" I have had a not-insignificant fraction of drivers who simply don't know where they are going--especially if "surge pricing" pulled them in from an area outside their usual haunts.
4) I have a problem with Uber, specifically. It seems like it's run by a bunch of nasty, rich, party boys and their treatment of people they regard as beneath them is absolutely disgusting.
I like the fact that the ridesharing services have forced most cities to start issuing more taxi permits. I like the fact that the ridesharing services function in the suburbs where taxis won't go(mostly--I have had some misses). I like the ridesharing services when they lobby for laws attempting to break the taxi monopolies.
So, my verdict is still out.
(Edited: I can haz English. Sheesh, my grammar is starting to suck.)
I have no opinion on Uber leadership coming into this, and would just like to see some elaboration on point 4?
I certainly would agree that there are companies with leadership teams as you describe, so I'm not opposed to that notion. Just wondering about this specific case.
1) They had a big party a couple of years ago where they had a large display that showed where several famous tech people were at the very moment in Uber cars. They did this without notifying or getting permission from said people[0],[1].
2) They rented the building next to ours for training. We rent several parking spaces in the lot on the other side of our building from the city. They repeatedly parked in our reserved spots and told their drivers to park there even after repeatedly being told they were reserved (purchased by us) and not to park there. They would literally move their cars, wait 5 minutes, then move them back. During breaks they would stand in front of the door to our building smoking and acting surly as if to try to intimidate us. I don't know how high up the management chain our people went, but it was clear they weren't going to do anything about it. Eventually our neighbor kicked them out!
1) This has long been a problem with taxi companies since long before Uber -- look at almost any cab and it will say something on the side like "vehicle leased to driver" or "driver is independent contractor".
3) True, but "hey, let's enforce the regs on the book" is a Pandora's box that most cabbies don't really want to open, because that would mean enforcing the ever-present laws about not rejecting people for having the wrong destination/race, not demanding more than the regulated fare, rejecting credit cards, etc.
Your son's argument seems confused. Taxi drivers in the US typically aren't unionized and their mandated "livable" rates are mostly eaten up by medallion rental fees, which freely adjust on the market, and are bid up to the point that it only leaves behind the previous unlivable wage for the driver.
(It turns out that "having an expensive final product" doesn't mean that every contributor's market value is expensive. Who knew? I mean, other than people familiar with the concept of economic incidence.)
> Here is the thing about Uber and Lyft (and much of the “sharing economy”).
> They don’t pay the cost of their capital.
> The wages they pay to their drivers are less than the depreciation of the cars and the expense of keeping the drivers fed, housed, and healthy. They pay less than minimum wage in most markets, and, in most markets, that is not enough to pay the costs of a car plus a human.
> These business models are ways of draining capital from the economy and putting them into the hands of a few investors and executives. They prey on desperate people who need money now, even if the money is insufficient to pay their total costs. Drivers are draining their own reserves to get cash now, but, hey, they gotta eat and pay the bills.
This article has the usual pro-Uber slant that allows them to complain that it's "impossible" to do business in a place because of regulations that apparently don't hinder any of the other players, so we're unlikely to get any details on what in particular made servicing Hungary "impossible."
I have to assume this is just more of their petulance, given local events involving them. Uber and Lyft claimed that servicing Austin would be "impossible" given the horrific demands that their drivers submit to finger-printing and left, claiming all over the place that they were "kicked out."
We have several ride-hailing services that are somehow able to bear these truly onerous and unbearable regulations, and that's without 100 billion in SV funding.
So I would guess that Hungary didn't want to serve themselves up on a silver plate and Uber threw the usual fit.
Yup. They clearly have an agenda that's more than just doing business. If all they wanted to do is make money for shareholders, they'd just comply with local regulations. They must be thinking for the verrrry long term, if they are planning on changing the structure of democracies to allow them to operate as they please.
Edit: To wit, appealing to the Texas legislature to overrule Austin's popular referendum.
Not sure about their long-term planning. It seems to me they're doing "just" business pretty well. Their strategy seems to be universally to burn money on lawyers so that local authorities can't ban them until they get to stay due to popular demand. It seems to be evidence of audacity, not necessarily of a long-term strategy.
I agree there is a deeper agenda to create a Libertarian structure so that government can't interfere in their operations.
This is made clear by the idea that a $60 billion dollar silicon valley company finds it "impossible" to create a seamless, frictionless method of obtaining fingerprints from drivers as part of their on-boarding process. It's ludicrous on its face. I'd be happy to do the project for just what they spent on the failed referendum in Austin.
Having predictable and uniform standards for Texas state-wide seems to make sense to me. Uber should be careful what they wish for, though, because the last quote I heard from one of the legislative committee chairman controlling such a bill was "as long as we get fingerprints I think it's a good thing."
> Article is light on what it would take for Uber to be compliant as a legal dispatcher service.
Typically the problems are: a) surge pricing b) rates that do not follow the government set rates c) refusing service to certain customers d) no mandatory insurances e) do not accept cash payments in cars.
Or, their drivers needs to be licensed taxi drivers, and they are not.
For example in Slovakia, the law states quite clearly, that if you provide road transportation for other people as a business, then if your car has more than 9 seats, you are operating a bus service, and if it has 9 or less, you are operating a taxi, and must follow all regulations applied to taxi drivers. But Uber says they are not a taxi, despite operating almost exactly like one. :-)
For example, we have other popular taxi service, which also has a smartphone app working very similarly to Uber, with the one exception, that they only accept professional taxi drivers as their drivers. So if they wanted, Uber could do the same and be perfectly legal, but they apparently don't want to.
> Or, their drivers needs to be licensed taxi drivers, and they are not.
I can't talk about Hungary but in Austria an uber driver could not be a licensed taxi driver or at least, it does not matter. However for sure an uber cannot be a taxi because uber has no chance to follow those regulations and restrictions without giving up their business model.
> For example in Slovakia, the law states quite clearly, that if you provide road transportation for other people as a business, then if your car has more than 9 seats, you are operating a bus service, and if it has 9 or less, you are operating a taxi, and must follow all regulations applied to taxi drivers.
That's not how it works in Austria and I'm sure that's not how it works in Hungary. In Austria there are two regulations: taxis and personal drivers. The latter is what uber currently follows. It's a car with a driver that cannot pick up customers from the street who are hailing and it must not be equipped with a taximeter.
> For example, we have other popular taxi service, which also has a smartphone app working very similarly to Uber, with the one exception, that they only accept professional taxi drivers as their drivers.
Uber is not just great because of the app but also because the drivers are rated, the customers are rated and with the surge pricing there is a chance to get a taxi when it's needed. Try getting a taxi in Vienna at rush hour. You can't, because nobody cares extra since you get just as much money there as you do normally but you are stuck in traffic, so there are fewer taxis on the road.
This is why taxi services are mostly crap. Without surge pricing it is common to never find a free ride, basically getting a taxi is a lottery. Why would government need to regulate the rates? Uber refuses crap customers (according to ratings) whereas taxis refuse you depending on your face, distance or number of bags. Insurance is a real problem which is why many European countries ban UberPOP
That's why there are taxi dispatch apps around the world (these days). Uber still thinks it needs to "fix" them (ie. make sure rent money flows to them instead of anybody else).
Sometimes my former socialist self whispers to me that the US is annexing the whole world through its companies. Then I realize that's a simple thought that is hard to dispel.
They didn't get banned in Austin, they didn't want to fingerprint their drivers and pushed for legislation that specifically excluded them from a law. The city of Austin even tried to work with them, offering to front the cost, set up mobile fingerprinting stations, but they rejected this stating it would be too high of a barrier for their drivers, and when the vote came in against Uber/Lyft on Proposition 1 they decided to leave. In other words, in the specific case of Austin, they acted like spoiled children when they didn't get their way and made it so no one can benefit from their services in the city.
I said effectively banned and what I meant was because of the unusual and onerous requirement of fingerprinting drivers when other cities such as NYC (where I live and which is far more dangerous than Austin) has no such requirement, nor apparently, does any other major US city since I've taken Uber/Lyft in a number of them.
What on earth are you talking about? Uber drivers in NYC have far, far more onerous requirements - including fingerprinting, drug testing, and a medical exam [1].
> unusual and onerous requirement of fingerprinting drivers
Maybe it is unusual because it's not common in other cities, but let's not pretend it's onerous. Austin really tried to work with Uber/Lyft on this, such as offering to pay for the fingerprinting or have mobile fingerprinting stations, and Uber/Lyft still didn't like the idea because it would likely mean that other cities would see it as an example. And it's also not fair to say that it's even effectively banned because it's a law that's not difficult to work within.
If NYC, Boston, LA, Chicago, DC, SF, Las Vegas, and other major cities across the country didn't require fingerprinting then it was unreasonable and according to my view, "onerous" in terms of the implications.
There is no reason except restraint of trade that Austin would need this fingerprinting when other larger and far more dangerous cities have done fine without it.
I would like to direct your attention to the "principle of charity" suggestion that @dang recommends commenters use when evaluating discussion.
By asserting facially false facts (NYC does indeed require fingerprinting[1]), and then attributing malice ("no reason except trade restraint") to Austin's referendum results your reply violates that principle in my opinion.
They aren't banned in Austin. They left rather than comply with the law. Other companies still operate. You can debate whether or not the law is a good law but they certainly weren't forced to leave.
Since you know very well they weren't banned in Austin, and in fact the city council spent a great deal of time and money trying to keep them here, perhaps you have some substantive point to make?
I wonder when US gov will take a deeper look at Uber.
It is not only taxi and public transportation laws around the country they "disturb"; I still receive spammy emails they continue to send, and even Sendgrid is fully in bed with them.
I forwarded spam to Sendgrid and they said they will follow up with Uber (so apparently they are Uber's customer support at this point - great!) The spamming practice never changed or stopped despite Sendgrid telling me they will send my email to them (!!) to unsubscribe me from their list, when I didn't even subscribe in the first place.
As I received more Uber spam I kept updating Sendgrid ticked (zendesk). Eventually some 2 weeks later they closed it as "resolved" and never replied to my emails again. I still get Uber Spam from Sendgrid. Stay away from them as long as you can (both Uber and Sendgrid)
