The Massive Overreaction To Uber's Response To JFK Protests

from the calm-down-people dept

Okay, let's start this out by admitting that there are plenty of reasons that people really dislike Uber, and I know that some people have a kneejerk hatred for the company. For a variety of reasons, in some people's minds, Uber represents the very worst of Silicon Valley. While I do think that the company has had some issues -- especially around privacy -- many of the complaints around Uber have been greatly exaggerated or distorted. But none have been quite as ridiculously distorted and exaggerated as the online reaction Saturday night to Uber's decision to drop its infamous "surge pricing" at JFK due to protests there. That resulted in a "#DeleteUber" hashtag going viral and being passed around by many, many people -- including many of my friends who I normally agree with on most things.

The whole thing doesn't make any sense to me and seemed quite ridiculously unfair to Uber (and, sure, some will argue that the company deserves whatever shit it gets, but to me it lessens people's credibility when they throw a fit over something where it appears they took things entirely out of context). So here's the background. As you are, by now, no doubt aware, on Saturday night there were protests all around the US, mainly at major airports, concerning people who were arriving from overseas at those airports, and being barred (or worse, sent back on other flights) in response to President Trump's new executive order concerning individuals born in seven particular countries. As part of this, the NY Taxi Workers Association announced a one-hour work stoppage to protest the executive order:

That afternoon, entirely separate from this, Uber announced that it had turned off surge pricing at JFK:

This resulted in many people assuming that this was Uber "breaking the strike" and basically undermining the protest message made by the NYC taxi drivers. And with many people already predisposed to dislike Uber, a meme was born. This was complicated even further by the fact that Uber's CEO, Travis Kalanick, is on one of Donald Trump's "economic councils." Some argued that it meant that he was supportive of Trump and all of Trump's plans, even as Kalanick made it clear that he didn't support the plan and planned to use his access to tell Trump why the plan was bad. But, it didn't matter. Tons and tons of people started tweeting that Uber was evil for supporting Trump and "breaking the strike."

But this makes no sense. The more I looked at it, the more I realized that no matter what Uber did, some people would have likely twisted it into being a way to bash Uber. Here were the options:

• Leave surge pricing in place: People would still argue that Uber "broke the strike" and, even worse, they'd argue that the "greedy" company was "profiteering" off of it by charging much higher rates. Dropping surge pricing actually decreases the supply of drivers, decreases the profit for the company and actually doesn't help Uber very much, because it means longer waits and fewer riders and drivers.
• Stop offering service to/from JFK: People would argue that this was Uber actively working to stop people from getting to the protests, especially since there was a period of time when the police were blocking the AirTrain, which is JFK's main connection to the NYC subway system.
• Stay silent: If only that were possible. My twitter feed over the weekend was full of reporters from major publications tweeting out over and over again their demands from basically every tech company to put out a statement or do something. And, indeed, Uber's CEO had sent out an email making it pretty clear that he didn't support the executive order at all, and that they were actively looking to help Uber drivers who were impacted by all of this.

And then, of course, there was the final option, which was dropping surge pricing, which was probably (quite reasonably!) seen inside the company as a show of support for the protestors, in that they were making it cheaper for people to get to and from JFK to take part in the protests.

I brought this point up with some on Twitter, and their response was that even if it was well intentioned, it didn't matter, because the impact was to "undermine" the work stoppage. That's also silly. Of all things, my undergrad degree is actually in labor relations, and that included multiple semesters of labor history and studying all sorts of things related to work stoppages and the like. When the point of a work stoppage is to push for better wages, then obviously, scabs or breaking a strike, is reasonably problematic to that strategy. But that's not what the NYC taxicab drivers were doing. They weren't making Donald Trump's life any harder (I'm reasonably assuming, he wasn't waiting for a cab from Terminal 4). What they were doing was a symbolic protest to make it widely know that they don't approve. And they accomplished that mission. Uber's decision had no impact on it (and, arguably, drew more attention to the protest).

So, sure, if you don't like Uber for this, that, or the other thing, feel free to continue to dislike Uber for those reasons. But if you deleted your Uber app because you thought it somehow "broke the strike," you massively overreacted and got sucked in by a meme that involved taking things out of context and misrepresenting reality.

Admittedly, there was one thing that Uber could have done, and didn't -- which was the strategy that its main competitor Lyft did take: announcing plans to donate $1 million to the ACLU (over the course of four years) directly in response to the executive order. This is actually a really great move by Lyft, and kudos to them. Kalanick later announced a $3 million "legal" fund to help Uber drivers, but that's not quite the same thing. Directly donating to organizations that will fight the executive order is a great thing and Lyft deserves lots of kudos for it -- but it's still a bit silly to argue that every company had to take that step to not be the target of a massive negative campaign.

Filed Under: immigration, jfk, protests, ride hailing, ride sharing, strike breaking, strikes, surge pricing
Companies: lyft, uber

Uber And California DMV Fight Over Definition Of Self-Driving Cars

from the policy-fight! dept

In highly regulated private industries the law means what it says – right up until a regulator decides that it doesn't. For that reason Uber, a company with a reputation for aggressively challenging legal norms, must have been particularly frustrated when the California Department of Motor Vehicles decided to publicly rebuke it for complying with the law of the Golden State.

The crux of the issue is that Uber decided to move forward with deploying some of its vehicles with automated technologies onto California's roads without a permit which, the California DMV believes, it must first obtain before rolling out.

In a statement, the DMV said that it has a "permitting process in place" through which twenty manufacturers have obtained permits. Then, so as to leave no double about its position on the matter, stated that "Uber shall do the same."

Now, whether the new Volvo XC90's equipped with Uber's technologies are "autonomous vehicles" as a matter of perception or regulatory projection is up for debate. Different people have different ideas about what fits that mold. But, when it comes to whether the DMV should take action to slow Uber's work, the question turns from one of perception to one of law and textual interpretation.

California, by way of the DMV, has chosen to define an autonomous vehicle in regulation as a vehicle equipped with technology "...that has the capability of operating or driving the vehicle without the active physical control or monitoring of a natural person...." Thus, the factual question that confronted Uber before it made its decision to deploy the vehicles in California was simple: "is this vehicle capable of driving without being monitored or controlled by a driver?"

For all of their impressive capabilities, it is a matter of public record that Uber's vehicles often require human intervention. By extension, those vehicles require constant monitoring by a human driver. On that basis, Uber likely thought that, while not toeing the industry line, its vehicles do not meet the definitional threshold necessary to trigger the state's autonomous vehicle testing regulations.

Of course, what regulatory history there is that points to a different intent, one that tracks with the DMV's argument, is no doubt informative and interesting as a matter of historical record, but it should not overcome the obvious strictures of the regulation as written.

In the meantime, the DMV has sent Uber a cease and desist letter. While the merits of regulation are often a matter of debate, the even application of the plain language of the law should not be. Unfortunately, it appears that Uber, by dint of its reputation, is facing unwanted "special treatment" by its regulator. Worse, the DMV may be expanding the reach of its regulations after the fact. If that's the case, and certainty is lost, so too will be the very definitional purpose of the DMV's regulations – to make regular.

Filed Under: autonomous vehicles, california, dmv, regulations, san francisco, self-driving cars
Companies: uber

Come On Elon! Tesla Stupidly Bans Owners From Using Self-Driving Teslas For Uber

from the you-don't-own-what-you-bought dept

We've talked a lot about the end of ownership society, in which companies are increasingly using copyright and other laws to effectively end ownership -- where they put in place restrictions on the things you thought you bought. This is bad for a whole variety of reasons, and now it's especially disappointing to see that Tesla appears to be jumping on the bandwagon as well. The company is releasing its latest, much more high powered, version of autonomous self-driving car technology -- but has put in place a clause that bars Tesla owners from using the self-driving car for any competing car hailing service, like Uber or Lyft. This is not for safety/liability reasons, but because Tesla is also trying to build an Uber competitor.

We wrote about this a few months ago, and actually think it's a pretty cool idea. Part of the point is that it effectively will make Tesla ownership cheaper for those who want it, because they can lease it out for use at times when they're not using it. So your car can make money for you while you work or sleep or whatever. That's a cool idea.

But it's flat out dumb to block car owners from using the car however they want.

If Tesla wants to compete with Uber, that's great, but it should compete and offer a better deal for car owners, rather than artificially limiting what they can do. And the thing is, Elon Musk knows this. Remember, a few years ago when he famously freed up all Tesla patents into the public domain, recognizing that it was better to compete on execution rather than artificial legal limitations? So why not take that same approach with competing in car hailing services as well? Don't limit what owners can do with their cars. That's now ownership. ow they're just leasing.

Tesla's plan for a competing ride hailing service is a good idea, and I'm excited to see what the company does with it, but if it starts off by artificially blocking Tesla owners from using their cars on competing services, it makes me think that Tesla doesn't think it's own service will be very good, and therefor it needs to artificially lock Tesla owners into its own platform, rather than competing on the merits. That seems antithetical to the message that Tesla and Elon Musk have given off in the past. Hopefully Musk reconsiders this anti-consumer move and recognizes that Tesla can build such a service that can stand on its own merits without artificially restricting Tesla owners.

Filed Under: autonomous vehicles, car hailing, competition, drm, elon musk, limitations, ownership, restrictions, ride hailing, ride sharing, self-driving cars
Companies: lyft, tesla, uber

Uber & Lyft As An Extension Of... Or Replacement For... Public Transit

from the well-that's-interesting dept

Lyft just announced an interesting partnership with MARTA, the Metropolitan Atlanta Rapid Transit Authority to basically help get more people to and from MARTA stations. It's an interesting approach to try to help make public transit more convenient:

Partnering with transit agencies like MARTA is a core part of our vision to build a sustainable transportation network. By helping fill the first and last miles between a passenger’s home and a MARTA station, we’re making it easier than ever to ride transit. We believe that when transit is within reach of everyone, our cities are more liveable, connected, and prosperous.

Of course, it's not entirely clear what's really involved in the "partnership" beyond marketing. Yes, Lyft is offering discount vouchers, but only for 10 rides. And you could already use Lyft or Uber to do this without the partnership.

Where this potentially gets more interesting is the decision of Dublin, California, to look to Lyft and Uber as a substitute for public transportation by subsidizing rides via those companies instead of taking a bus.

In a first for California, a public transit agency next month plans to begin subsidizing fares of people who take private Uber and Lyft cars to local destinations rather than riding the bus.

Passengers ordering Uber or Lyft car trips within two test areas of Dublin will be eligible to get door-to-destination service at a big discount under a partnership between the ride-hailing companies and the Wheels public bus system in Dublin, Alameda and Pleasanton.

The local transit authority is even suggesting that this might change the way they set up routes and serve certain communities. In fact, they've already killed off one (little used) bus route, suggesting that this new partnership can help replace that route more efficiently.

I can see why this might annoy some people -- and certainly those who don't trust big private companies like Uber and Lyft are going to complain. Similarly the bus driver's union rep is apparently pissed off. But this is still a really interesting experiment. If it allows municipalities to truly offer better, more efficient transportation and it's cheaper overall, then is it really a problem that some companies might also make some profits from it? It will be interesting to see how this experiment in Dublin works out and if other cities follow suit. And it seems like a much better idea than what's happening in Massachusetts, where the government has instituted a special tax on Lyft and Uber... and giving that money to the taxi companies who didn't innovate.

Filed Under: atlanta, california, car hailing, dublin, marta, massachusetts, public transit, ride sharing
Companies: lyft, uber

Uber Wasting No Time: Launching Test Of Self-Driving Cars

from the this-should-be-interesting dept

It's no secret that Uber has been interested in self-driving vehicles and how they might change its business. Lots of people have predicted futures in which Uber basically runs a fleet of self-driving cars and Uber itself has commented on the idea in the past as well. But I'm not sure anyone expected it to happen this soon. The company is apparently starting a test-run with driverless vehicles in Pittsburgh:

Starting later this month, Uber will allow customers in downtown Pittsburgh to summon self-driving cars from their phones, crossing an important milestone that no automotive or technology company has yet achieved. Google, widely regarded as the leader in the field, has been testing its fleet for several years, and Tesla Motors offers Autopilot, essentially a souped-up cruise control that drives the car on the highway. Earlier this week, Ford announced plans for an autonomous ride-sharing service. But none of these companies has yet brought a self-driving car-sharing service to market.

Uber’s Pittsburgh fleet, which will be supervised by humans in the driver’s seat for the time being, consists of specially modified Volvo XC90 sport-utility vehicles outfitted with dozens of sensors that use cameras, lasers, radar, and GPS receivers. Volvo Cars has so far delivered a handful of vehicles out of a total of 100 due by the end of the year. The two companies signed a pact earlier this year to spend $300 million to develop a fully autonomous car that will be ready for the road by 2021.

Separately, the company announced that it has bought a self-driving startup, Otto, and put its co-founder, Antohony Levandowski, in charge of Uber's self-driving efforts.

We've already noted that Tesla has Uber-like plans as well, but this could certainly get interesting. Lots of people (including us!) have speculated on what the world will look like as autonomous vehicles become more prominent, but it's somewhat amazing how quickly this is happening.

While it's not a huge surprise that Uber may be leading the way, it does still raise some interesting questions. Obviously, lots of people say that Uber wants to do this so that it won't have to pay drivers any more (though in these tests a human is still in the driver's seat and, one assumes, getting paid). But part of the genius (or problem, depending on your point of view...) of Uber was that it was just a platform for drivers who brought their own cars. That is, Uber didn't have to invest the capital in buying up cars. It just provided the platform, drivers brought their own cars, and Uber got a cut. If it's moving to a world of driverless cars, then Uber is no longer the platform for drivers, it's everything. It needs to make the investment and own the cars. That's actually a pretty big shift.

That's not to say that it won't work -- and there's an argument that Uber's real power these days is in its operations software figuring out which cars should go where -- but it is an interesting shift in the business. And given that, it's also interesting to see how Tesla is entering the market from the other direction -- a direction that is more like Uber's original concept, where individuals own their own cars, but then lease them back to Tesla to act as for-hire cars for others. I guess it's possible that Uber could do the same thing too, where any car owner could provide their vehicle back to Uber to earn money, but without having to drive it -- just making it a productive resource.

Who knows how this will turn out -- and I'm sure some people will inevitably freak out when there's a self-driving car accident -- but the future is getting really interesting really fast.

Filed Under: autonomous vehicles, ride hailing, ride sharing, self-driving cars
Companies: otto, tesla, uber

No, A New Study Does Not Say Uber Has No Effect On Drunk Driving

from the put-down-your-drink-and-read-the-study dept

The first rule of science journalism is to read the study before you write about it. Alas, that hasn't stopped media outlets from routinely misreporting, exaggerating or exercising insufficient skepticism about scientific research, particularly in the service of clickbait headlines and extra views.

A recent study from the American Journal of Epidemiology on whether the introduction of ridesharing has had an effect on alcohol-related crash fatalities was the latest victim of this kind of sloppy reporting. The Washington Post announced: "Is Uber reducing drunk driving? New study says no." CNN declared: "Uber doesn't decrease drunk driving, study says." Fortune writes: "A New Study Says Uber Has Had No Impact on Drunk Driving." Other outlets published similar stories.

But alcohol-related fatalities are not the same thing as drunk driving rates. According to the National Highway Traffic Safety Administration, nearly 10,000 Americans die each year in crashes involving a drunken driver; about two-thirds of that total are the drunken drivers themselves. But according to the FBI's Uniform Crime Reporting Program, there are annually about 1.1 million arrests for driving under the influence, which itself is just a fraction of the Centers for Disease Control and Prevention's estimate of 121 million incidents each year in which intoxicated drivers aren't caught. Astoundingly, according to one analysis, drunk drivers average just one arrest per 27,000 miles driven while intoxicated.

Ideally, society would like each of these three numbers to fall, but first, we must be able tell them apart. The AJE study's authors make clear that they "did not examine Uber's association with other traffic outcomes, including drunk driving incidences and nonfatal crashes." This leads one to the conclusion that these journalists – or at least, those writing the headlines – may not have actually read the study at all.

When it comes to whether services like Uber and Lyft reduce drunk driving overall, logic suggests that more available and convenient transportation options likely would make it easier for many to plan a night out without getting behind the wheel, and reduce the incentives to drive under the influence. The CDC already lists taking a taxi as an important preventative measure and ridesharing options are usually cheaper and very often more convenient than getting a taxi. As these services increase in popularity – particularly among millennials, who both use ridesharing more and have a greater propensity to drive drunk – one would expect a corresponding decline in the number of DUI arrests and alcohol-related fatalities.

There isn't much research on the subject, but most observations to date seem to support the supposition. A 2015 study published by Temple University's Fox School of Business concluded the introduction of UberX in California led to a reduction in the rate of motor-vehicles homicides per quarter of between 3.5 and 5.6 percent. Another study by Mothers Against Drunk Driving, in partnership with Uber, also looked at the introduction of UberX in California and found that alcohol-related crashes by drivers under age 30 fell 6.5 percent, or 59.21 fewer crashes per month.

In June 2016, Providence College published a study which found that "DUIs are 15 to 62 percent lower after the entry of Uber" and the introduction of the service "is associated with a 6 percent decline in the fatal accident rate." More recently, when Uber and Lyft were pushed out of Austin, Texas, DUI arrests spiked by 7.5 percent.

Given that background literature, it's important to note some significant limitations in the approach used by the AJE study's authors. They looked at data from 2005 to 2014 for the top 100 metropolitan statistical areas (MSAs) in which Uber has entered the market. Of course, in many of those MSAs, the company may be operating in the largest city or cities, but not across the whole metropolitan area. Also notable is that in most of the MSAs the study examines, Uber was introduced at some point in 2014, the same year the authors' data ends.

Additionally, many of these jurisdictions also did not have friendly regulatory climates for ridesharing in the period the authors examined. Aside from California and Colorado, where state-level pre-emption laws were passed, most ridesharing regulation through 2014 was done at the city level. It was fairly common at the time for transportation network companies to have uncertain legal status and for jurisdictions to impose hostile regulations, issue cease and desist orders or hold sting operations to block Uber and Lyft from operating. Additionally, carpool services like UberPOOL and Lyft Line, which are significantly cheaper, had not yet become widely available. Today, ridesharing is cheaper, more popular and fully legal in most major cities.

It also may not be that surprising the AJE study didn't line up with results from other research that focused on California. Uber was founded in San Francisco and launched there in 2009. Lyft launched in 2012. TNCs have been legal statewide in California since the California Public Utilities Commission's initial rulemaking in 2013. California is the oldest and probably strongest ridesharing market. If ridesharing has an effect on alcohol-related fatalities or drunk driving more generally, it would show up there first.

In much of the rest of the country, ridesharing is not as well-established. According to Pew, as of December 2015, only 15 percent of U.S. adults had used a ridesharing service. Of those, only 17 percent reported they use it more than once or twice a month. In short, outside of millennials in major urban centers, ridesharing hasn't yet caught on in a big way.

More research looking at more recent data is needed to better understand the effects of ridesharing on drunk driving rates. And with each new report, whatever its conclusion, one hopes science journalists will bring more care and a healthy skepticism to the table. In the meantime, this study alone isn't a compelling reason to dismiss other evidence supporting the positive effects of ridesharing on reducing drunk driving.

Zach Graves is a senior fellow at the R Street Institute, a free market think tank based in Washington, DC

Filed Under: drunk driving, journalism, ride hailing, ride sharing, studies
Companies: uber

As Austin Struggles To Understand Life Without Uber & Lyft, DUI Arrests On The Rise

from the not-cool dept

A month ago, folks in Austin Texas voted against a proposition that Uber and Lyft supported, concerning a number of new rules that would be put on ride hailing operations. Given that, both companies immediately shut down operations in Austin -- a city with over a million residents and only 900 cabs. In response, people are so desperate for rides that they're seriously trying to recreate the Lyft/Uber experience by using a Facebook group where people can post their location, negotiate a fee, and have someone pick them up (something that seems a lot more dangerous than typical Uber/Lyft).

DUI (driving under the influence) arrests have gone up by 7.5% compared to the previous year.

This does not mean that Uber/Lyft leaving is absolutely the cause, as there may be lots of other factors. But the anecdotal evidence certainly suggests it's having an impact. From the Vocative story linked above:

“The first Friday and Saturday after Uber was gone, we were joking that it was like the zombie apocalypse of drunk people,” Cooper said.

People were so desperate for rides, she said, that she’d pull up to a corner and pedestrians would offer to hop in her car as soon as they spotted her old Uber and Lyft emblems in the windshield. “They don’t even know who I am,” she chuckled in amazement.

Even more troubling than the late-night pedestrian concern is Austin’s rampant drunk driving problem—last year the city had more than 5,800 DWI arrests, according to police data. Back in December the city’s Police Chief Art Acevedo expressed concern for how an Uberless Austin would affect the road safety. “If we take away the (ride-hailing firms) here and in other cities, it definitely will impact DWI,” he said. “There’s no doubt about it.”

No matter what you think of Lyft or Uber, it's pretty clear that they're very, very useful services for lots of people -- and that includes drunk people who no one should want behind the wheel themselves. Putting in place regulations to limit those services seems to be backfiring, and hopefully it doesn't lead to loss of life either through drunk driving or less safe drivers making use of the informal Facebook groups.

Filed Under: austin, dui, dwi, innovation, ride hailing, ride sharing, texas
Companies: lyft, uber

NYC Judge: Taxis Must Compete With Uber, No Matter The Medallion Industry

from the bravo dept

If violence is the last refuge of the incompetent, as Issac Asimov's delightful line in Foundation tells us, then perhaps desperate lawsuits are the last refuge of the disrupted industry. There is simply no better example of this than the many groups affiliated with many city's taxi services and their many lawsuits against Uber. We've seen this dance play out in the past, with the disrupted industry flailing away in court, attempting to get the government and/or the law to protect its own business interests rather than competing with a disruptive newcomer. It almost never ends well for the old guard.

But it isn't just taxi companies themselves who have attempted to get into this mix against Uber. Take a case brought in Queens, for instance, in which Melrose Credit Union joined others in an effort to force Mayor de Blasio and New York's Taxi Commission to ground Uber on its behalf. Melrose Credit Union has most of its loan portfolio tied into medallion purchases, lending money to taxi companies in order that they could pay the once-expensive medallions. The problem, obviously, has been that taxis aren't making as much money as they used to because Uber is displacing them. As a result, taxi companies and drivers can't make enough to pay back the loans, the loans are defaulting, and Melrose Credit Union is freaking the hell out. They told as much to Queens Supreme Court Justice Alan Weiss. Weiss, as it turns out, was less than impressed.

“Any expectation that the medallion would function as a shield against the rapid technological advances of the modern world would not have been reasonable,” he wrote. “In this day and age, even with public utilities, investors must always be wary of new forms of competition arising from technological developments.”

In other words: compete or die. And those really are the options, no matter what other legal actions might be taken or verdicts rendered. The fact is that the progress of technology will indeed march on and will create more efficient ways of performing within any given industry. Attempting to stem that flow with trumped up legal actions and proclamations of the industry's destruction would only work in the short-term, if at all. In this case, the court ruled that de Blasio and the Taxi Commission aren't required to keep Uber drivers from picking up customers. And why should they be? If the public wants the service, Melrose Credit Union would deny them that service on the argument that it will lose money? Judge Weiss wasn't having that.

Judge Weiss made clear that that’s not his concern. “It is not the court’s function to adjust the competing political and economic interests disturbed by the introduction of Uber-type apps,” he wrote.

Indeed it isn't, nor is it the court's function to countermand the Taxi Commission's stance that Uber rides are pre-planned rides, instead of hailed fares off the street, and therefore don't require a medallion. If medallions become less valuable, that's a problem for the medallion money-men to endure, not the public.

Filed Under: cabs, competition, disruption, innovation, lawsuits, loans, medallions, new york, taxis
Companies: melrose credit union, uber

How The Heavy Hand Of Government Stifles The On Demand Economy

from the not-helping dept

This century has produced a new lexicon that didn't exist a generation ago: Broadband. Apps. Connectivity. Streaming video. Social networks. The on-demand economy.

The new millennium has also produced a startling number of successful American companies with worldwide reach: Airbnb, Amazon, Facebook, Google, Lyft, Netflix, Pandora, Snapchat, Twitter, Uber, Yahoo, Yelp.

With so many American innovators leading and improving the global economy, it would seem natural for American policymakers to do everything possible to allow these companies to flourish. Instead, we see far too many examples of our politicians actively discouraging or burdening new services from the country's leading American companies. With good intentions, but flawed logic, politicians are jumping in to regulate these new companies, slowing the pace of innovation.

In July, Democratic New York Mayor Bill de Blasio was forced to table a plan to limit the growth of ride hailing companies like Uber and Lyft in New York after riders launched a public campaign to stop the proposal. Ride hailing services give New Yorkers and visitors access to quick, clean and affordable transportation options and help expand the city's economic growth by creating more job opportunities. So why are city regulators trying to slow their expansion and limit consumer choice?

Ride hailing companies continue to face pressure from courts and politicians who say drivers should be treated as employees rather than independent contractors. Labor unions are pushing this view, while ignoring that many ride hailing drivers are drawn to the flexibility of being independent contractors. (Meanwhile, taxicab drivers in many cities are also considered independent contractors, a fact that is rarely mentioned in these debates.)

On-demand economy services like Airbnb that link homeowners with those looking for places to stay are also under attack, as hotel unions join with the lodging industry to regulate, and in some cases ban, these services. The city of San Francisco is considering a measure that would cap Airbnb stays at 75 days, a move that Airbnb says will cost the city $58 million in tax revenue over the next 10 years. Why would city leaders seemingly ignore the potential good that immense amount of revenue could do?

Our nation was built on a foundation of freedom -- freedom to contract with each other for goods and services, freedom to innovate and create new products, freedom to start a new business and maybe even fail at it. The government should only impose itself on industry if there's a compelling public interest.

Rather than force new services to fit the framework of old rules, innovative startups offer regulators a chance to revise outdated rules to reflect a new reality. Ride hailing services naturally weed out bad drivers and poor service, especially when compared with the legacy cab drivers who aren't rated on or accountable for the quality of their service. Government can and should require driver screening and insurance, but it's the dynamic feedback nature of the wireless service that safeguards the public and benefits drivers.

Home-sharing services like Airbnb give users more options when they travel and provide extra income for homeowners. Government can and should collect hospitality taxes after some threshold of rentals, but cities benefit from the influx of tourism whether visitors stay in hotels or not. Recently, my family took a holiday in New York City, where Manhattan has few hotel options for families with children. Thanks to Airbnb, we rented an apartment for a third of the comparable hotel price.

Meanwhile, millions of Americans enjoy new services and experiences thanks to the ever evolving tech economy -- whether it's making a living from eBay or Etsy, figuring out where to eat or stay from Trip Advisor or Yelp, or enjoying new music from Pandora. Politicians need to get out of the way, let these businesses thrive and intervene only when there's a demonstrated, compelling need -- and even then, do so as narrowly as possible. The public is voting with their apps and their finger taps. Politicians would be wise to listen to the sounds of the page clicks. It's what their constituents want.

Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA), the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times best-selling books, Ninja Innovation: The Ten Killer Strategies of the World's Most Successful Businesses and The Comeback: How Innovation Will Restore the American Dream. His views are his own. Connect with him on Twitter: @GaryShapiro

Filed Under: innovation, on demand, on demand economy, regulations, ride hailing, sharing
Companies: airbnb, lyft, uber

Toronto Cab Drivers Sue Uber For Interference With Their Super Profitable Business Model

from the that's-how-it-works,-of-course dept

I was last in Toronto a few years back, pre-Uber, and I remember clearly having a long conversation with the cabbie who drove me from the airport to my hotel, about just how ridiculously corrupt the taxicab business is in Toronto. He was telling me how supply was artificially limited, and even things like being allowed to pick up passengers at the airport required under-the-table kickbacks to certain officials. The driver was pissed off about the whole thing. I'm reminded of that now, as the news comes out that some cabbies in Toronto are suing Uber itself, claiming illegal competition. This is interesting on a few levels. While we know that many cabbies are upset about the competition from Uber drivers, in most cases the direct attacks on Uber have come from the cities and politicians, rather than directly from the cabbies. Yes, there have been riots by cabbies in France, and protests other places, but actual lawsuits have mostly been limited. There are a few exception, such as when Chicago cabbies sued Uber with some nonsensical claims about false advertising.

Here the claims seem equally questionable:

Law firm Sutts, Strosberg LLP, which is representing the taxi drivers, said in a statement on Thursday that the named plaintiff, cab driver Dominik Konjevic, alleges that "Uber X and Uber XL have created an enormous marketplace for illegal transportation in Toronto".

There doesn't seem to be much of a claim here other than "we don't like competing." Or, as we've described it in the past, felony interference with a business model. It's not even clear how the Toronto cabbies have standing here, as you'd think anyone who would have a right to complain would be the passengers, but of course, that's not going to happen, because most of them actually like services like Uber.

There's also the fact that an Ontario court just rejected an attempt by Toronto itself to block Uber in the city, saying that the service was legal. The cabbies here are filing this under different "provincial" law though it seems likely to have the same overall outcome.

Yes, I'm sure if you're a cabbie in a cushy industry where there is tremendous corruption and artificially limited supply it must really suck to have to face real competition from players who are more innovative and provide a better overall service. But that doesn't mean it's illegal.

Filed Under: cabs, competition, lawsuit, taxis, toronto
Companies: uber