Uber's Most Important Innovation: Highlighting Totally Bogus Local Restrictions

from the keep-it-up dept

Fri, Sep 21st 2012 1:32pm — Mike Masnick

It's baaaaaaack. Despite a summer uproar that caused the DC taxicab commission to dump a proposed plan that would have artificially kept Uber's prices high, the commission is back, and it's got another (bad) proposed rule (pdf) that would make life difficult for Uber and its independent drivers.

If you're unfamiliar with Uber, it's a pretty great service that makes it really easy to use your phone to get a car (usually a black car akin to a typical car service, but in some cases smaller cars or even actual cabs). Users have a credit card on file, so you never have to even handle payment stuff as it's all done automatically. It's also been innovative in how it works with drivers, who are independent contractors. Using Uber is more expensive than a cab, but it's so easy and useful that almost everyone I know who uses it, loves it.

However, taxi and limo services are some of the most highly regulated local markets out there, and Uber just keeps running up against those random or pointless rules and regulations. In this case, the new DC rules clearly seem designed to mess with Uber. Among some other things, it would require drivers to give riders a paper receipt, and would also say that you can't have a car business with fewer than 20 cars. That really mucks with the way Uber partners with drivers, who are often one-man (or woman) shops, doing this to make money. But, in some cases, they can also allow someone to build up their own "fleet" of cars, but which operate via Uber's platform. But under these rules, it may be difficult for drivers, or for entrepreneurs buying up a few cars, to really embrace this model. Finally, the new rules prohibit dropping people off outside of DC by saying you have to stay within the territory you're registered in.

For its part, the DC taxicab commission disagrees with Uber's assessment of the new rules expressing a clear bit of frustration with the company:

"They don't what they're talking about," Linton says. "They often don't know what they're talking about."

He also pushed back on a few other points:

According to Linton, the regulations would still allow for independent sedan operators with one car, and would only eliminate companies with a handful of cars that he says most frequently try to game the system. Linton says paper receipts will prevent drivers from charging for miles they didn't drive, and the regulations will only prevent sedans from operating in jurisdictions they aren't registered in—i.e., an Uber trip from Maryland to D.C. could be driven by a car from Maryland or D.C., but not from Virginia.

In other words, he's got perfectly good reasons that the rules aren't bad... except for the simple fact that none of his explanations make sense. Even if it does allow single car operators, why should it be illegal to own between 2 and 19 cars? They say the smaller shops often game the system -- but in that case, go after them for such gaming of the system. Don't completely wipe out all the other good players with such a broad blanket ban. As for paper receipts... huh? I don't see how a paper receipt prevents a driver from overcharging. Even worse, this somehow suggests that Uber's drivers are doing that. But I've never seen or heard any such complaints against Uber. Is there anyone clamoring for a paper receipt from Uber? And, if there are such mysterious people out there... um... is it really that important to pass a rule for them?

Honestly, these rules seem much more designed -- as so many rules are -- to protect legacy players against upstarts like Uber.

And, of course, this is happening all over the place. We already covered the situation in Boston, but there was recently a similar mess in New York City where Uber partners with real cabs (as opposed to car service cars), but which the city is trying to block.

All of these efforts seem like crony capitalism at its best: taking existing inefficient systems, and then blocking unique innovators, whose customers seem pretty damn happy for the most part. Uber, of course, long ago realized something very simple: even though it's fighting these battles on every front, the publicity from it is the best advertising it could ever get. In fact, we've heard that the use of the service tends to go up significantly after such fights. This, of course, frustrates Uber-critics on things like the taxicab commission, as they suggest that Uber complains about these things solely for the publicity. Even if that was the case, I don't see how Uber's wrong. If it gives them publicity for a service people like, more power to them. The real question should be why we still allow such a blockade on innovation by various taxi commissions.

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Filed Under: local rules, regulations, sedans, taxis, washington dc
Companies: uber

20 Comments

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Joseph M. Durnal, 21 Sep 2012 @ 2:03pm

DC/MD/VA
They don't call it the DMV for nothing, there is a Washington DC metro area where borders don't really matter. Making a rule like this is clearly designed to prevent competition to existing DC taxis.
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Mason Wheeler, 21 Sep 2012 @ 2:19pm

Paper receipts
I can see a lot of your points, but the paper receipt one should be obvious: the rider immediately has a record of what he's being automatically charged by the system, that he can review and check for accuracy. It not only prevents gouging and fraud, but also simple mistakes and human error on the part of the driver. That one's actually a perfectly cromulent regulation.
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Mike Masnick (profile), 21 Sep 2012 @ 2:22pm

Re: Paper receipts
I can see a lot of your points, but the paper receipt one should be obvious: the rider immediately has a record of what he's being automatically charged by the system, that he can review and check for accuracy.

Uber provides that info via your phone... so you have that info all without wasting paper and time.
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Anonymous Coward, 21 Sep 2012 @ 2:58pm

Re: Paper receipts
I don't remember the last time I took a taxi and wanted a receipt, you could save a lot of energy (and paper) by not issuing receipts.

Why should it be mandatory?
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Applesauce, 21 Sep 2012 @ 4:02pm

While I'm absolutely certain that all *current* members of the taxicab commission are honest and honorable, it would be interesting to see how often past members have been convicted of taking bribes, kickbacks and payoffs and favors from the existing entrenched operators.

Again, as a DC area resident myself, I have complete and utter faith in the honesty and wisdom of all *current* commission members.
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Anonymous Coward, 21 Sep 2012 @ 5:12pm

I can't belive you didn't call them on the licensing absurdity. In an area like DC metro a requirement like 'car must be registered at pickup or destination' is clearly designed to limit small operators from serving every customer they can. What if I only have one car in VA and I want to pick someone up in DC headed to BWI? Nope, have to turn down that work.
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Anonymous Coward, 21 Sep 2012 @ 5:55pm

It would be nice if, for once, Mike Masnick would, before declaring something stupid, actually research the original reasons for it.

That would, at least, be somewhat informative.

For example, taxis are heavily regulated, and have been for decades.

That's not solely a result of "crony capitalism." Unless you believe there is a singular Taxi Corporation that successfully exerts its influence over every single city on the planet.

Instead, it's likely a result of tort law, consumer protection concerns, etc.

So to say, hey, let's scrap that shit and let "Uber" do what it wants doesn't sound like it benefits anyone except, you know, the shareholders of "Uber."

Considering "Uber" is more expensive than cabs, and doesn't follow the same regulations, I don't see why we should be in a rush to skew the law in favor of this particular company.

Anyone who has found themselves at an airport or train station of a major city and saw those signs that warned you not to get on an unregulated cab: they're there for a reason. And it's not crony capitalism.
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Atkray (profile), 21 Sep 2012 @ 6:04pm

Re: Re: Paper receipts
But think of the forests.
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Anonymous Coward, 21 Sep 2012 @ 6:34pm

Re:
Yeah, those arbitrary limits on the number of cars a company can own and mandatory paper receipts will definitely protect consumers, because
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Anonymous Coward, 21 Sep 2012 @ 8:53pm

Re: Re:
Because the cab company benefits from lack of receipts while consumers don't. Unless you can think of a situation otherwise.
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techflaws (profile), 22 Sep 2012 @ 2:49am

Re:
Talk alot, do you? But, eh, what are the reasons then?
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Anonymous Coward, 22 Sep 2012 @ 3:12am

the ones dreaming up these ridiculous 'rules' are being 'encouraged' to do so by the legacy players. like so many other US industries/companies/services, they cant handle competition simply because they have never had to compete, previously having thrown a few bucks around to someone to keep the businesses safe
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Anonymous Coward, 22 Sep 2012 @ 5:45am

Re: Re: Paper receipts
I was wondering this as well, thanks for clarifying.
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Anonymous Coward, 22 Sep 2012 @ 1:38pm

Re: Re: Re:
Wait, so if the cab company benefits from something ... then that something must necessarily hurt consumers?
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Anonymous Coward, 22 Sep 2012 @ 1:39pm

Re: Re: Re:
and, in this situation, the opposite is true. The cab company benefits from receipts because it harms the competition which hurts consumers who wish to use a competing service.
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Anonymous Coward, 22 Sep 2012 @ 3:51pm

Re:
"Instead, it's likely a result of tort law, consumer protection concerns, etc."

You don't make any sense. How is passing laws that raise prices on consumers by reducing competition in any way 'protecting' consumers. Consumers would be much more protected - from artificially high prices - in a competitive environment where they don't get abused by high prices.

If the govt. wants to protect consumers the first thing they need to do is to stop destroying competition.
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Michael Price, 24 Sep 2012 @ 3:09am

Pointless?
"Uber just keeps running up against those random or pointless rules and regulations"

"Honestly, these rules seem much more designed -- as so many rules are -- to protect legacy players against upstarts like Uber."

Only one of these can be true, either the restictions are pointless and/or random or they are designed to protect legacy players.

Guess which one I vote for?
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vastrightwing, 24 Sep 2012 @ 8:58am

No more new business models
I propose that we no longer allow any new business models to be developed. We have all that we need right now. New models only serve to disrupt existing models and this is very bad, as the music industry will tell you over and over. So kids, you can stop thinking and go back to watching legacy TV right now. You won't ever have to worry about figuring out to make a living because you will only be allowed to do what is currently being done. Politicians can rest now knowing that they won't ever have to deal with new technology to get around existing systems. I love it!
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Bouncinideas, 13 Apr 2013 @ 2:13pm

Uber
Best article I've seen for Uber's new 2013 strategy. Awsome ideas for any startup in the article and how Uber used them

http://capitalistcreations.com/uber-a-great-startup-business-but-can-it-survive/
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Jesse Rebel, 2 Mar 2014 @ 10:19am

Re: Re: Paper receipts
The difference is that there is a delay between when you leave the car and when your charges are available to view via your phone. By the time you are able to view your charges ... the car is gone. The charges will probably be what the driver said ... but what if they aren't?
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