Top EU Court Says Uber Is A Transport Service That Can Be Regulated Like Traditional Taxis

from the if-it-looks-like-a-duck,-swims-like-a-duck,-and-quacks-like-a-duck,-then-it-prob dept

Uber is a company that provokes strong emotions, as numerous stories on Techdirt indicate. Uber has been involved in some pretty bad situations, including inappropriate behavior, special apps to hide from regulators, and massive leaks of customer information. Despite this, it is undeniable that millions of people around the world love the convenience and competitive pricing of its service.

Equally, traditional taxi services dislike it for the way Uber flouts transports regulations that they obey, which is fair enough, and hate it for the way Uber challenges their often lazy monopolies, which is not. This has led to some appalling violence in some countries, as well as numerous legal actions. One of those, instituted by a professional taxi drivers' association in Spain, has resulted in a case before the EU's highest court (pdf), the Court of Justice of the European Union (CJEU), which has just ruled as follows:

the Court declares that an intermediation service such as that at issue in the main proceedings, the purpose of which is to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys, must be regarded as being inherently linked to a transport service and, accordingly, must be classified as 'a service in the field of transport' within the meaning of EU law.

The CJEU's reasoning was that Uber is more than a simple intermediation service. Its smartphone app is "indispensable" for the process of agreeing to deals between the driver and the customer, and Uber exercises "decisive influence over the conditions under which the drivers provide their service." As a result, the CJEU ruled that Uber is not "an information society service", but a "service in the field of transport", and may therefore be regulated just like traditional taxi services.

In practice, this means that Uber will be able to operate in the EU, but will be unable to continue with its swashbuckling approach that has seen it ignore many traditional requirements for taxi services. That result will be important for its knock-on effect on other services offered as part of the so-called "sharing economy". In fact, these are better described as new kinds of rental services, and like Uber they have often skirted around existing laws that cover their field of operation. The CJEU ruling, which can't be appealed, is likely to mean that other companies using online technology to provide such services will also need to obey relevant EU laws.

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Filed Under: cjeu, eu, regulations, ride sharing, taxi
Companies: uber

Bad Ideas: Tesla Bars Ride Sharing Drivers From Using Its Superchargers

from the pray-we-don't-alter-it-any-further dept

Tesla remains a fascinating company. Elon Musk famously likes to do things his own way, and doesn't much care for convention. And that's often a great recipe for innovation. At times, it leads to really awesome things like giving away all the company's patents for anyone to use without licensing. But, sometimes it does some weird things that should make people think twice about buying into the Telsa vision -- even when at first pass it may make sense. For example, a few months ago, we were concerned about the "surprise" remote range extension that Tesla gave to drivers in Florida to help them evacuate before Hurricane Irma hit. On its face, this obviously seems like a good thing. Helping people evacuate a hurricane by extending their mileage is unquestionably good.

But it did raise some concerns -- about a company remotely, and without notification, updating the car you purchased from afar. Because if it can be used for "good" reasons (like giving you extra range to escape a hurricane) it might also be used at other times for bad reasons. What if, for example, Elon Musk decides he doesn't like you. Last year, Musk famously banned famed venture capitalist Stewart Alsop from buying one of Tesla's cars after Alsop publicly complained about a poorly staged event by Tesla. Could Musk "brick" someone's car for displeasing him? The backlash to that would be massive, which probably keeps such a move out of the realm of likelihood, but there are still problems with the company changing your car after purchase.

Similarly, last year there were reports that Tesla was banning people from using its self-driving car technology as part of any ride-sharing project. This seemed like an anti-competitive move, as Tesla has talked about setting up its own sort of Uber using self-driving cars that people would buy (basically, you'd "rent out" your car while you weren't using it). We thought that was a neat idea, but were troubled by the idea of contractually blocking Tesla owners from working with other vendors on such a project.

And now there's another troubling move: Tesla is telling "commercial" drivers of its vehicles (mainly ride-sharing drivers) that they can't use the company's Supercharger network to charge their cars. There are perfectly legitimate, non-nefarious reasons for this. Mainly: there are apparently problems with Superchargers being overcrowded these days, and you could see why the company doesn't want them clogged up with ride sharing drivers, effectively subsidizing their driving jobs. At the very least, the company has made it clear the policy only applies to new Tesla buyers, so it's not a bait-and-switch situation.

But, still, there's something troubling about the idea that the company can ban you from using its Superchargers based solely on the type of driving you're doing. Again, that leads to questions about what other situations may arise where Tesla bans people from using its chargers in one form or another. I'm sure that many won't think this is a big deal -- and will point out that the company needed to do something to avoid congestion. But we should be concerned about how this is subtly changing our relationship to the products we (thought we) own, and the control that companies have over our usage, post-purchase.

I don't think Tesla is doing anything nefarious here, and there are plenty of seemingly good reasons for why the company chose this path. But we should be quite careful and thoughtful about how we move into a world where the company that sells you something retains an astounding amount of control over how and even if you are allowed use it, based on how much it likes or dislikes you or your profession. Because sooner or later, these issues are going to get bigger and more problematic -- and it might help if we really thought about them now, before things get messy.

Filed Under: cars, elon musk, internet of things, ownership, ride sharing, superchargers
Companies: tesla

Chicago Alderman's Plan On City Budget Crisis: Let's Just Charge Uber And Lyft More To Fix It

from the that's-not-a-plan dept

Big city budgets are hellaciously complicated affairs. That much is obvious, but the actual level of management of a budget likely goes far beyond what the average member of the public realizes. Even with that stipulated, the city of Chicago's budget is an absolute mess. Budget shortfalls abound for any number of reasons, ranging from bloated payrolls, to pet projects that have missed the mark on cost projections, to a shortage of income related to police and parking activity from our infamous redlight cameras and our equally infamous privatization of parking meters. Anyone looking to solve this budget crisis is likely to begin pulling their hair out immediately, wondering where to even begin.

Except for Alderman Anthony Beale, longtime stooge for the taxi industry, who has suggested an easy fix: just go crazy in taxing the hell out of innovative ride-sharing services like Uber and Lyft.

Beale, who chairs the City Council Transportation Committee, said he hopes Emanuel will revisit the idea of higher fees and tougher regulations on the burgeoning ride share industry as part of budget talks for 2018. He said the move would help even the playing field for cab drivers finding it increasingly difficult to compete. Beale wanted a per-ride charge of $1 on ride share companies as part of Emanuel’s 2016 budget. Instead, Emanuel raised the charge from 30 cents to 52 cents per ride.

“We should have went for the dollar and we negotiated down to the 50-cent (fee),” Beale said Wednesday. “Now here we are again, going for the dollar. And so, I think we could have been much further along if we had just stuck to our guns and gone for the dollar a couple years ago.”

Chicago has been a battleground of sorts in this fight between taxis and ride-sharing services. The per-ride fee instituted in 2016 came on the heels of a city-wide protest by taxis in 2015, where cabs refused to pick up fares in the downtown area and instead just honked their horns a bunch while those of us that work down here tried to actually do our jobs. The protest was designed not so much to rally public support to their side, as the public's voting with their wallets is what got us here in the first place. Rather, it was designed simply to be a pain in the city's ass enough for city officials to write in higher per-ride fees into its licensing legal framework.

And to that extent, it worked. The fee went up by a third or so. For Beale to lament the lack of a 300% increase in fees and, more fallaciously, to frame the desire for that increase as a budget solution when it is nothing of the sort, is fairly laughable. The real reason for Beale's angst is that he is the errand boy of Chicago's taxi companies, plain and simple. This is pure entrenched player protectionism and regulatory capture in reverse, with taxi companies looking to regulate more innovative and useful companies to death, or at least into some sort of insane fairness coma.

That isn't how government is supposed to be done, but it sure is the Chicago way.

Filed Under: anthony beale, budget, chicago, ride sharing
Companies: lyft, uber

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

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

Judge Posner Smacks Around Cabbies For Thinking That Cities Allowing Uber Violates Their 'Property Rights'

from the that's-not-how-this-works dept

It's no secret that cab companies and many cab drivers don't much like Uber and Lyft. Competition is tough. And cabs in most cities have survived thanks to artificial limits on competition through medallions and the like. This has always been a stupid, and frequently corrupt, system. For years, before Uber and Lyft came along, people talked about the ridiculousness of artificially limiting competition in this manner, but it was only once those companies came along that the true ridiculousness was made clear. While some forward looking cabbies have embraced these and similar systems, others have been fighting the new reality, often in fairly ridiculous ways. In Milwaukee and Chicago, cab companies sued those cities, arguing that allowing this type of competition amounted to a Fifth Amendment violation, in the form of "taking private property for public use without just compensation." What private property, you might ask? Well, according to the cab companies, the artificially restricted competition is their property. No, really.

The district courts didn't buy it, and now that it's moved up to the 7th Circuit appeals court, Judge Richard Posner isn't buying it either. In the two decisions -- Joe Sanfelipo Cabs v. City of Milwaukee and Illinois Transportation Trade Association v. Chicago, Posner makes quick work of explaining to these folks that the government restricting competition from entering your market isn't a property right that those who benefit from it get to make claims over (though he does, unfortunately, say that patents are a form of property in dismissing the "absurd" claims from the cabbies):

The plaintiffs’ contention that the increased number of permits has taken property away from the plaintiffs without compensation, in violation of the constitutional protection of property, borders on the absurd. Property can take a variety of forms, some of them intangible, such as patents. But a taxi permit confers only a right to operate a taxicab (a right which, in Milwaukee, may be sold). It does not create a right to be an oligopolist, and thus confers no right to exclude others from operating taxis.

Posner notes that if there had been an explicit promise not to change regulations, that might have been one thing, but there was not. Similarly, he admits that the taxi permits are property, but that's unrelated to the issuing of more permits:

The taxi permits issued by the Milwaukee city government are property, but have not been “taken,” as they do not confer on the holders a property right in, amounting to control over, all transportation by taxis and taxi substitutes (such as Uber) in Milwaukee.

And then he basically says "welcome to a market economy, cabbies":

Undoubtedly by freeing up entry into the taxi business the new ordinance will reduce the revenues of individual taxicab companies; that is simply the normal consequence of replacing a cartelized with a competitive market. But the plaintiffs exaggerate when they predict ruination for themselves. Buses and subways and livery services and other taxi substitutes have not destroyed the taxi business; nor has Uber or Lyft or the private automobile or for that matter the bicycle. Taxicabs will not go the way of the horse and buggy— at least for some time.

That's from the case against Milwaukee. The Chicago ruling is pretty similar:

All seven of the plaintiffs’ claims are weak. The first is that allowing the TNPs into the taxi and livery markets has taken away the plaintiffs’ property for a public use without compensating them. A variant of such a claim would have merit had the City confiscated taxi medallions, which are the licenses that authorize the use of an automobile as a taxi. Confiscation of the medallions would amount to confiscation of the taxis: no medallion, no right to own a taxi, ... though the company might be able to convert the vehicle to another use. Anyway the City is not confiscating any taxi medallions; it is merely exposing the taxicab companies to new competition—competition from Uber and the other TNPs.

“Property” does not include a right to be free from competition. A license to operate a coffee shop doesn’t authorize the licensee to enjoin a tea shop from opening. When property consists of a license to operate in a market in a particular way, it does not carry with it a right to be free from competition in that market.

Posner doubles down on just how dumb this argument is by the cab companies:

Taxi medallions authorize the owners to own and operate taxis, not to exclude competing transportation services. The plaintiffs in this case cannot exclude competition from buses or trains or bicycles or liveries or chartered sightseeing vehicles or jitney buses or walking; indeed they cannot exclude competition from taxicab newcomers, for the City has reserved the right (which the plaintiffs don’t challenge) to issue additional tax medallions. Why then should the plaintiffs be allowed to exclude competition from Uber? To this question they offer no answer.

All that the City gives taxi‐medallion owners is the right to operate taxicabs in Chicago.... That isn’t a right to exclude competitive providers of transportation.

Perhaps more importantly, though, Posner also shoots down the argument that it's unfair that Uber gets to operate under a different regulatory regime:

The plaintiffs argue that the City has discriminated against them by failing to subject Uber and the other TNPs to the same rules about licensing and fares (remember that taxi fares are set by the City) that the taxi ordinance subjects the plaintiffs to. That is an anticompetitive argument. Its premise is that every new entrant into a market should be forced to comply with every regulation applicable to incumbents in the market with whom the new entrant will be competing.

Here’s an analogy: Most cities and towns require dogs but not cats to be licensed. There are differences between the animals. Dogs on average are bigger, stronger, and more aggressive than cats, are feared by more people, can give people serious bites, and make a lot of noise outdoors, barking and howling. Feral cats generally are innocuous, and many pet cats are confined indoors. Dog owners, other than those who own cats as well, would like cats to have to be licensed, but do not argue that the failure of government to require that the “competing” animal be licensed deprives the dog owners of a constitutionally protected property right, or alternatively that it subjects them to unconstitutional discrimination. The plaintiffs in the present case have no stronger argument for requiring that Uber and the other TNPs be subjected to the same licensure scheme as the taxi owners. Just as some people prefer cats to dogs, some people prefer Uber to Yellow Cab, Flash Cab, Checker Cab, et al. They prefer one business model to another. The City wants to encourage this competition, rather than stifle it as urged by the plaintiffs, who are taxi owners.

And, later:

There are enough differences between taxi service and TNP service to justify different regulatory schemes, and the existence of such justification dissolves the plaintiffs’ equal protection claim. Different products or services do not as a matter of constitutional law, and indeed of common sense, always require identical regulatory rules.... If all consumers thought the services were identical and that there was therefore no advantage to having a choice between them, TNPs could never have gotten established in Chicago.

There are all sorts of arguments people can make about whether or not companies like Uber and Lyft are good (and I'm a fan of them), but arguing that they're "taking property" away from cab medallion holders is not a legitimate argument.

Filed Under: car hailing, chicago, competition, medallions, milwaukee, property, property rights, richard posner, ride sharing, taxis

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