What do we do about a problem like Uber? Tom Slee speaks his brains Veteran software pro Tom Slee was one of the first critics of so-called “Sharing Economy” outfits like Uber and AirBnB. His forthcoming book What’s Yours Is Mine: Why The Sharing Economy Isn’t draws attention to the dark side of their operations – and strongly argues for regulation. But this creates a dilemma. They’re hugely …
On the one hand he admits that things like Taxi services have issues, but the likes of Uber are not the answer BUT, without the likes of Uber, where is the need for change?
If there is no need for change, because, well why bother, then things don't happen.
Just look at music. The labels we screaming how torrent were killing music sales and went around with the ban hammers. Then the likes of Apple (and them more and more) offered legal downloading and now it's a multi-billion pound business for the record labels. Yet without the downloading business becoming legit, they would have still been wielding the big hammer, without generating anymore money, just pissing people off.
In the UK at least we have two different forms of taxi. We have the Hackney Carriage which holds is own operator's licence and is allowed to take bookings on the street. These are very strongly regulated, must be wheelchair accessible and are able to charge fares based on distance and time.
On the other side you have the private hire sector, these are generally a lot less regulated than the Hackneys, the operator's licence is held by the taxi company and bookings can only be made with the operator, so the cars can't pick up off the road. Importantly they can only charge by distance.
Both of the above have regulated fares. Hackney fares are set by the Local Authority and private hire have to submit their fare sheets for approval too.
Uber attempts to circumvent this in a number of ways. There is nothing stopping Uber setting up as a private hire company in the UK, however their pricing models are not compatible with the way taxi licencing is done in a lot of the UK. Private hire companies can't just put a surcharge on because their busy (Surge pricing is one of Uber's defining characteristics), they also can only charge by the mile, whereas Uber's app charges you for both time and distance travelled.
Uber are trying to straddle the line between being a black cab and being a private hire, while adding some extras in that aren't strictly legal either.
Hmm. Yesterday I got off a train in a town OUTSIDE* London (fancy that, the UK has places other than London, who'd have thunk it?) and got INTO a taxi. I never took my phone out of my pocket but used this amazing technology called my mouth to talk through a window to someone sitting behind a big wheel.
On making some noises I got in and he drove me, immediately, to where I wanted to go.
There fixed it for you.
* CAPITALS and bold, just to out do you.
A lot of private hire companies outside London have a time component to their fares as well - the difference in London is that they're not allowed a meter, which makes it a bit impractical (unless you have an app...). Is there definitely a rule against charging more when you're busy, or is Uber just the first to try?
I don't think we should forget why the distinction between private hire and hackney carriage exists: rather than taking the first taxi off a rank you can choose which minicab firm to book - it's a competitive market. Hackney Carriages on the other hand need regulation because it's always in the interests of a driver to charge as much as they can get away with, knowing there's no chance of repeat business anyway.
If you look at it this way it seems clear that Uber fits the private hire definition better; it can't survive without returning customers. I think the extra competition in London is working nicely for the consumer, plenty of minicab firms have brought out apps and cut fares recently.
probably the most obnoxious statement in there is "VC's expect Uber to become a monopoly"....
It is the expectation of exclusivity for *your* venture, that is poisonous.
Monopolies are how we got to the current dysfunctional state with taxis, broadband, retail computing...
P.
Adam Smith said that capitalism led inexorably to monopoly unless the Government established regulation. Once again, he was right. What people want is to be able to control the market and set their own price, and we constantly see that happening today -- unless the Government enforces competition.
At tracking your one-night-stands... Seriously I fear this is yet another yanky shitty corp you don't want to find yourself beholding to privacy-wise... I live in a city where taxi safety could benefit. But the way these guys roll, no thanks!
http://www.theregister.co.uk/2014/11/20/senator_franken_uber_privacy_probe/
http://www.theregister.co.uk/2015/06/22/epic_uber_ftc/
Uber\s creepy one-night-stand tracking blog (since taken down)... "You people are fascinating"...
https://newsroom.uber.com/ridesofglory
At tracking your one-night-stands...
Remember as all journeys are arranged via the Internet, Uber could be regarded as a communications services provider (under the UK's draft investigatory powers bill 2015) and hence have to retain these records in case the powers that be wish to do some digging...
So for those liaisons where you don't want to leave any history, a conventional hail-and-ride taxi service is so much more confidential...
And let's not forget this gem...
> It’s an acute problem for progressives and the Left when you want to ban or regulate something, and yet you can’t show "harm" to justify it.
Sure, because the Right have *never* decided that they wanted to ban or regulate something yet have been unable to show "harm" to justify it...
I don't know enough about the rest of the world, so I'll stick to London.
Uber seems to meet a need, AirBnB similarly. I have used neither of them. A few years ago Taxi Drivers were up in arms about those bicycle rickshaw things claiming they would bring the end the world as we know it. Doesn't seem to have happened. No incumbent welcomes competition.
The argument here seems to hinge on the "community" theme, we are all in this together, etc. So what will Uber/Air do to undermine that? Well, if we all agree with one definition of community: nothing at all. Personally I don't care about the schools I don't need, the public libraries I don't use and so forth. Of course I live in a Local Authority that seems to be efficient in both collecting and administering local taxes, so they are low and I am quite happy. YMMV
Those that argue for mechanisms other than competition highlight the accompanying evils but underplay the resulting choice and diversity. Don't like the wages? Do something about it. Don't like the prices? Don't buy it then. But what are the options in the absence of competiton?
Remind me again, why the tube drivers are taking strike action and what alternatives I have?
The Grauniad says it's about working patterns - OK but is that every tube driver*? (in the same way some shops are happy to open on Christmas day) and what about the user demand for a 24 hour service?
The world was going to end, according to some, when buses went cashless - doesn't seem to have happened.
Sure society needs some oversight, but always beware of special pleading and always ask "qui bono?"
* I'm grateful as ever for the Daily Mash view no thanks, we're paid enough
Only if the systems in question are private. It's not really a problem if they're in public ownership.
'Too big to fail' is an issue because it means that a company ceases to be governed by the rules of the market and gets an implicit public guarantee - the tax payer will bail you out because they cannot live without you. This removes the pressure of competition, and so means that you've effectively become vulnerable to all the sins of the public sector, only it's being run for a profit so there's an upward pressure on prices that doesn't exist in publicly-run enterprises.
This isn't to say that public ownership doesn't have a whole host of problems of it's own - but 'too big to fail' doesn't really apply to government-run monopolies because they're answerable to a body which is directly selected by the customers, rather than a body which only represents the shareholders.
One aspect about the various changes in regulation that are mooted is they are stupidly reactionary: they see (picking Uber for argument's sake) the business practice and they try to target that.
What they ought to be doing for everyone's sake is to identify why such regulation ought to exist, and make sure it applies to Uber as for any other taxi company. For example, most people are not in favour of cartels and other "closed shop" arrangements that serve to protect a few, but they are in favour of, for example, making sure that cars and drivers are in fit condition and fully covered by insurance. Simply putting that onus on Uber alone would be a step towards a level playing field.
OK, it may not address all of the issues, for example, to keeping universally available service, but unless that is also explicitly imposed by the existing taxi license holders its a hard sell to argue against Uber on that point. Legislate for social outcomes, not business methods, etc.
The one other area is the financial technology side, with P2P lending – which has turned out not to be P2P lending at all. It turns out those businesses have just turned into a new way of qualifying loans for the financial institutions.
Quite Heavenly ProVision Says I, and with Pre Investors Blasting Corrupt Commands and Controls and Supplying Worthy Refurbishments ….. for Immaculate Replacements.
And that be Uber Future Futures and AIDerivatives zeroday trading with perfect enough to succeed Novel Day Traders*. ‽
*:-) Latter Day Sainted Early Trippers ........ True Survivors.
Judging by the link in the end of the article (which gives a blurb only before you hit a registration wall) apparently attempts - so far not very successful - to expand into China and India cost an awful lot.
Bribes? Dunno...
And all those servers and Big Data and analyzing how often an average customer visits hookers every month and how hot a typical French "driver-partner" is on a scale from 3 to 7 must have operating costs attached... To say nothing about office parties.
In the US, most cities have terrible taxi service, with no more than a tiny (if not in fact zero) percentage of vehicles with disabled access, and in most places insisting on cash payments – assuming they show up at all. In New York, there are many fewer cabs than the customers would like, but the street grid simply cannot support more --- which is what led to the absurdly high auction prices for taxi medallions just before the arrival of Uber. And while you can often (if the weather's not too bad or its not rush hour – that is, when you most want a cab) hail a cab on the street in busy parts of Manhattan, it's impossible to do so in the outlying parts of the city. And heaven help you if you, like I do, live in the suburbs around a major city. Then there's at most one taxi company "servicing" your area, and they act with the customer serve orientation of all monopolies — and their vehicles are run-down, poorly maintained, and usually driven by foreign nationals with whom it's sometimes difficult to communicate.
The answer to the complaints about Uber management's practices (which begin at odious and sink from there) is for the regulated taxi companies to band together and offer an app-based taxi call service. If Lyft can do it to, they wouldn't be violating any patents. Yet they are resistant to such changes, because they're used to decades of regulatory protection in a shared monopoly.
Well, tough for them if a more agile and imaginative capitalist or two eats their lunch.
And yes, it was innovative for a firm with capital behind it to use a smartphone app to enable people to find out if there was a car near enough to them to wait for, whether Uber invented that technology or not.I find Mr. Slee rather a pompous fool, and his arguments somewhat less than fact-based.
One final note: each time I've used Uber in the US, I've asked the driver if he or she was happy with the deal. Only one of a dozen or 15 answered in the negative; he was a recent immigrant who had had to have Uber finance a new car purchase to enable him to drive for them, and found the terms oppressive (see "business practices, odious" above). All of the others, new or with a few years' experience with the company, driving several hours a day or only occasionally on weekends or work holidays, were positive. If the drivers in Seattle had grievances, they were right to organize, which gives their negotiations with the company some balance. The drivers around the US I've talked to haven't, with that one egregious exception, seen the need for that kind of leverage.
Most of their innovation is in the way they deal with regulation, rather than technology advances.Uber can only be successful in places where regulation is failing. The reason for taxis and private hire vehicles being regulated separately in the UK is historical and no longer really relevant. There's no such distinction here in Germany and the taxi companies already have their own app: MyTaxi. As a result Uber isn't really interesting to passengers.
Using geolocation to improve efficiency and registration to facilitate payment is a win-win for passenger and driver.
"As a result Uber isn't really interesting to passengers."
Well, that and the German ban on them using unlicensed drivers means that they have no competitive advantage. It's not that regulation is directly failing elsewhere; it's that, for reasons I can't begin to understand, most of the USA and UK etc have decided that Uber isn't subject to the same regulation as any other taxi firm, despite fulfilling exactly the same function as a private hire radio operator.
Sure, some of the various regulations controlling taxis were obsolete. Others, like checking drivers to ensure they're not alcoholic rapists, are actually a pretty good idea. Uber ignores the lot and basically hopes that it can get away with it; European countries are quite resistant to companies deciding they can pick and choose which laws they want to comply with, and so Uber is having a harder time getting a toe hold here.
People don't give a crap about "sharing economies" they know dealing with a taxi is a nightmare and Uber is far better.
Dealing with Uber (or Lyft, which I use) is "ask for ride via app... car shows up and takes you where you want"
With a taxi, it was call. Get hung up on. Call. Connect to operator that you couldn't understand. Spend 10 minutes yelling back and forth trying to set up a ride. Car might show up in 20-30 minutes. Get in and listen to racist asshole rant about "that n*gger president ruining everything" for 15 minutes until you get where you want. Try to pay. Driver gets pissy about card. Scrounge up cash. Driver is pissy about no tip. Tell him to take cards next time. Slam door.
**After** Uber showed up, the local (Orlando) taxi companies all bought the same shit app. It randomly ignores the phone's GPS, AND the map selection, AND the location I type in, and sets my location somewhere downtown. The taxi goes there, and they then blacklist you from further business.
That's the sort of fail that is killing them, not Uber.
I won't even discuss the taxi driver that insisted on reading her paperback while "driving"
Just the fact of having reviews on taxi drivers is a huge step forward, can't count how many times I have to be on an argument with a cab driver trying to charge more for the trip, or dealing with their bad behavior, or shitty driving; and having no one to file a complaint. Aside from the reviews, also I've been several time in a rush or under puring rain looking for a taxi without avail, with Uber it is way easier.
It seems to me that the main motivation for a lot of these new services is the natural consequence of the existing services being squeezed by bureaucracy.
Uber - taxi license systems rife with corruption, never able to find a taxi when you want them, expensive and filthy when you do.
Bitcoin - cash strangled by regulation and tax, provides a well oiled alternative to the usual fiat currencies.
AirBnb - traditional hotels and B&Bs require fulltime commitment because of regulation. Anyone wanting to offer smaller concerns just cannot afford it. AirBnb supplies the means for smaller players to enter the market in a casual way.
Bureaucracy and high taxation is crushing the life out of traditional businesses. It is inevitable that others will flood in to take their place. And let's be honest here: the main parties opposed to them are the incumbents and the regulators.
I made it about 60% of the way through the article and I had to give up. I waited and waited for the guy to say something, anything intelligent and I couldn't wait any more.
It's pretty much guaranteed that any time a business comes up with some offering that people want, there will be a politician trying to put a stop to it.
Yes, Uber are dicks, but he is seriously underselling how terrible traditional government supported artificial shortage (through the medallions) taxis are.
Yes, there are now taxi apps. But there sure weren't any useful ones before Uber. It was the competition that forced them to become competitive.
Airport is a special case in that you can almost always get a taxi out. But elsewhere, forget it. So much easier to get a Lyft.
The 'sharing economy' companies would never have gotten anywhere if the over-regulated, over-protected, stagnant companies they were competing against weren't so terrible to begin with.
Maybe there's a happy medium.
Uber/AirBnB etc brought a common user interface no matter what city I fly into and that's it.
'Hey Cortana, I need to be at the Pigs Head to meet Mike at 20:00 and I need to pick up Julie on the way.'
Cortana: broadcasting request, sending your customer rating, auction closes in 90 secs
Cortana: receiving quotes - cheapest (@$x) is CrapTax...rubbish rating...you've never used them.
Most expensive (@$x+4) is Lilys Limos...top rating...out of your league.
Most likely for you (@$+1) is Mickeys or Al's...both rated good...which one ?
'Mickeys'
Cortana - booking Mickys...confirmed. Texting Julie, ETA Julie 19:51 texting Mike, eta Mike 20:00...ordering drinks @ Pigs Head, You - Pint Stella, Julie - Pint Guiness, Mike - Pint Bitter. Table 14.
I don't just want another taxi controller (no matter how seemingly efficient) I want you to bid for my business.
And it isn't just taxis and beds, it's clothes and food and phones and gas and everything.
I publish a demand and based on my credentials, suppliers submit bids.
I thought that this was the Uber business model that was the brave new world, turns out it wasn't.
No idea why you got down voted. Your scenario sounds to me just like all the good SF "utopia" novels describe it. ie, it works for the users by making life better.
The "problem" seems to be that pretty much every business is run purely to maximise profit and there's no "feel good factor" where a business is at least partly there to make the world a better place.
No idea why you got down voted
T'wasn't me, but the scenario he described sounds ghastly to me. I'm sure many people would love it, but I'd rather walk than use that particular collection of technologies and protocols. Nothing about it - the voice-recognition "personal assistant" tech, the auction, the reputation sharing - is at all appealing to me.
That sort of information-spraying efficiency has no place in my life. Anything worth doing, as far as I'm concerned, is worth doing in a deliberate, considered manner.
Michael Wojcik, I entirely agree with you.
I don't/wouldn't use any of this stuff but I know loads of people who do/would.
They are quite prepared to pay good money for this kind of thing if it is done properly, they outnumber us by a million to one.
It's like the IoT, any sensible person wouldn't touch it with a bargepole but plenty of others are more than willing.
They are going to have it whether we like it or not, so surely we should at least give them the best that can be done.
John Brown (no body)
'The "problem" seems to be that pretty much every business is run purely to maximise profit and there's no "feel good factor" where a business is at least partly there to make the world a better place.'
If you want to maximise profit you have to satisfy your customers' demand, if you become lax then somebody else will do it and steal your lunch. (IBM don't make PCs any more)
All businesses make the world a better place, they raise customer expectations to above the level they can satisfy at which point another business steps up to the plate.
I'm working abroad at the moment, never been here before, don't speak the local lingo.
Got off the plane, having googled the name of the place, printed it, so it actually renders correctly in the Cyrillic script in use here, walked outside the airport, got in the long line of cabs waiting outside the airport.
Show bit of paper to cab driver, made the sign of the golden thumbs, and amazingly made it to where I was going, quickly and cheaply, sure I might have paid the driver an extra buck or so for him sitting in his car in the freezing cold.
Why exactly do I need uber, oh that's right so I can pay quadruple the "saving" for using the data on my mobile, rather than the fat pipe available at home, and spending five minutes doing some prep before getting on a plane.
Single monthly payment gets you the fastest available unlimited internet connection anywhere in the world (3 to 5 years)
Single monthly payment gets you the cheapest available unlimited energy anywhere in the world (bit longer)
Single monthly payment gets you free next day delivery of an unlimited set of products to anywhere in the world from an unlimited set of suppliers (amazon is close)
5bn people @ $20/month (nice)
Uber is just another Natural Monopoly like Facebook, Twitter, the power grid, or the London Underground.
As such it is probably best run by local government so that it can't extract monopoly prices. That doesn't mean the service should be provided by local government, it can hire companies to do that, or that it should be funded out of taxation.
If London already had a system where anyone could go on a website or app and hail a private car, and there were no barriers to anyone becoming a private driver like there are for Black cab drivers, then, well that's basically what Uber has managed to do with an App. The App just gets around the natural monopoly handed to black cabs by TfL.
Black Cabs did harm consumers, because they extracted monopoly prices. Uber harms the drivers and also the government coffers (I doubt they are paying loads of tax on their profits). The natural marketplace monopoly of an App should be run by TfL, not Uber, but any drivers should be free to enter or leave the marketplace.
Only problem with that is that it is easy for small groups of workers to unionise and bully the government into giving them perks at the expense of the consumer by threatening to vote for the oposition as a block.
But mostly, I don't try to dissuade others from using it - I personally refuse to support it.
And I haven't had to. I live in Brisbane (Australia, not California) and never had a problem booking a cab over the phone. But I did when I was down in Sydney (original booking never showed up, second booking showed up 45 minutes after promised arrival time). So I'd say the problem isn't so much that the Taxi concept is broken as that some companies (and some regulatory agencies) are crap and can get away with it.
As for using an App to book a taxi, I was in Tokyo recently and their taxi-booking app was a pleasure to use - register your name with the App, point at the map to say were you want to be picked up (if Tax can't stop there for any reason, you won't be able to "tag" that pickup point), tick the "I'm ready now" or fill out booking time. Done.
"And I haven't had to. I live in Brisbane (Australia, not California) and never had a problem booking a cab over the phone."
This. Some places have shockingly bad taxi provision, which may or may not be due to regulatory burden. Others don't, in spite of regulatory burden. The latter didn't need Uber arriving and killing off other taxi firms because they've found ways to cut round the regulations, which mostly exist for good reasons (someone mentioned NY having very limited taxis due to the general congestion of the city - unless Uber's cars can fly, they're increasing that congestion by ignoring the regulatory regime).
Most of these regulations are pretty good ideas; some may be in need of updating or scrapping (I'm fairly sure NY has gown by about 300% since the medallion system was introduced), but it's not for Uber to decide that. They should not be celebrated for basically breaking the law as aggressively as possible and hoping that if they do it quickly enough, they will get away with it.
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