Uber reveals fresh passenger data spaff – and city officials are OK with this Uber has agreed to hand over information on its passengers' taxi journeys to city officials in Boston, US – as the data may prove useful to city planners. The deal may be one of many more to come with other towns and cities, perhaps in an attempt to butter up local governments to accept the controversial taxi biz on their …
I think you meant to say "skirting of CORRUPT taxi regulations"...
Like every other inefficient, poorly run, low-quality business, the taxi industry rushes to their government protectors to keep them from having to actually provide clean, safe taxis driven by polite drivers. You know, like a real market economy would demand that they do. So instead they try to outlaw the competition.
I live in Cambridge, MA (mentioned in the story) and for the past 2 years I've been taking Uber almost exclusively instead of taxis. Today I happened to be on the way home from a meeting and happened to be right in front of a taxi stand so I thought, OK, I'll save some money and take a cab.
The taxi pulls up, I get in and immediately he says "CASH ONLY!" even though his cab had the VISA/MasterCard logo on the window. Having learned my lesson in the past in trying to argue with cabbies over this issue, I just got right out and ordered an Uber.
Nothing in your post suggests even one of the "CORRUPT taxi regulations". Did you mean to say that regulations are not needed at all? If a taxi is not honoring your valid payment methods and it irritates you, it, ironically, invalidates your point of zero regulations.
Also, what is your take on Uber, which claims to be safe and doesn't perform any background check of drivers? So, a girl in India, who believes their promises, falls victim of rape.
@ChaosFreak
"You know, like a real market economy would demand that they do."
Here's the thing . . . Taxis are (generally) not even ABLE to function in a 'real market economy'. The medallion/license system is tied up in regulations and investments and legal actions and this means that to a large extent, drivers are slaves to that.
There are 1825 medallions in Boston.
These medallions grant the owner the right to operate a taxi (a right they can lease out) but come with numerous restrictions - from the eminently sensible to the the slightly petty and outright ridiculous. All of these regulations entail some kind of financial burden - whether its the purchase and maintenance of uniforms or having the required stickers and signs (usually required to be laminated) inside and outside the vehicle. Failure to comply with any of these regulations carries a fine.
Essentially, the medallion system is a kind of bargain between the cities and the owners that was born of the problems that arose from having an unregulated taxi service. Those problems were that there were far too many drivers and they were being unscrupulous and sometimes dangerous and, despite the high level of supply, it was not meeting customer needs.
The bargain that the medallion represents is that the owners/drivers will be regulated so that they provide a service as dictated by the government/council and in return, they will be allowed to operate in a quasi-monopoly.
Whether you think that's a good thing or not is a little beside the point - that is the system that taxi drivers are bound to and if you want to drive a taxi, that's the deal. This has seen medallions become a very sound investment over the years and so an industry has grown around that. Again, whether this is to be considered right or wrong, good or bad is beside the point - it's the system that the governments and councils created and so taxi owners and operators have had to work with it.
It has led owner-operators to take out loans (essentially mortgages) to get their medallions and be able to treat it like an investment so that, despite the relatively low wages of taxi-drivers - especially once you consider all their expenses - they know they have an investment that they can, once they retire, sell or lease out. That's the system and it's what people have had to buy into.
Uber has had the effect of quite seriously impacting medallion values and, while this seems like a great thing, it will be disastrous to the owners - especially small owner-operators who will be in much the same situation as people whose house value falls away. Imagine having a mortgage on a $600,000 medallion that is now worth $450,000? This is what is happening!
Medallions provide an exclusive right for owners to operate taxi services and they value is predicated on that. It is an agreement between the cities and the owners and allowing services like Uber to provide a functionally (nearly) identical service is akin to the cities not holding up their end of the bargain.
Remember that the cities create these medallions/licenses out of essentially thin air and auction them off. They do so infrequently because to flood the market would dilute the value, but when they do, they just pocket the money. When they have released new batches, that's pure profit.
Taxis are a monopoly but they are a government created monopoly. People have paid for the right to operate in that monopoly and paid a LOT. They take out mortgages to gain buy into the exclusive right to provide this service and now the governments and cities are allowing other companies to provide the same services.
In other words, the exclusive right they paid for is no longer there!
So, yes, the current systems are not ideal and need reforming but if that reform involves breaking the essential promise that the sale of medallions is based on then there must be compensation for the owners - they bought rights from the cities and the cities are no longer honouring them.
I am not at all against Uber because I think this is a disruption that is sorely needed because the current systems (all around the world) are just not meeting passenger needs and expectations. I think Uber needs to be a catalyst for things to be reworked - properly. This necessarily includes making sure that those who have played by the rules of the medallion/licensing system do not have the value of their investments destroyed.
@dan1980 the other thing is, disruption is fine, but breaking the law isn't. In some countries they try the "we are an Internet business, the law doesn't apply to us," even though they are just a glorified taxi service - instead of calling the taxi company on the phone to book a ride, you use an app on the same phone to book that same ride, how is that any different to a taxi?
(I live in an area where there is only a taxi rank outside the railway station, so picking up a taxi in town comes down to phoning for a taxi.)
With the taxi, I know he is insured, I know he has been vetted and I should be reasonably safe. With Uber, I know that the driver cannot have any insurance, because he does not have a taxi licence and, at the current time, having that licence is a pre-requisite to getting commercial insurance here.
That is why Uber is illegal here. If they want to disrupt, fine, but first they need to change the law, so that their drivers can be on the road legally - the only way currently is to use private insurance, which is null and void if they have a paying passenger on board - well, there is actually a loop-hole, if the driver is going to the same destination as the passenger and the passenger is only paying enough to cover fuel for the trip, then the insurance is still valid; but if the passenger pays more than their share of the fuel for the journey (i.e. the driver makes a profit), then the insurance is void in the event of an accident.
@big_D
The situation varies by location because taxi regulations are sorted out per city/county/state/etc... (per country). In the UK, for example, the big stoush is in London. In London, only 'black cabs' can pickup 'hails' - i.e. people flagging down a taxi on the side of the road. Also, only black cabs can have a 'taximeter' 'installed'. That is a BIG point of contention because the Uber application provides all the functionality of a meter while staying outside of a strict reading of the regulations.
In other cities, this is different and 'minicabs' can have meters.
It's in the areas where taxi regulation is strongest that are having the biggest conflicts with Uber. The reason is that in these areas, driving a taxi generally requires the most investment of money from the owners and operators - whether that's in mandatory lessons and tests, insurance, specific models of cars (which might not be able to double as personal cars), memberships, higher standards of maintenance and more frequent servicing, uniforms, signage, dispatch costs, and of course rent or interest for the license/badge/medallion.
The question really is one of whether it's more important whether Uber satisfies the letter of the law as to what is and is not a taxi service or if Uber functions as a taxi service and fulfills the same purpose.
Those who operate taxis argue that because Uber fills the same role as a taxi, it should be subject to the same regulations. Those who run Uber argue that they aren't technically a taxi service so shouldn't be subject to those regulations.
Passengers largely don't care, of course.
Personally, I believe that governments and cities love Uber because it has gotten them out of a mess of their own making. THEY created the monopoly and used the promise of it as an incentive to sell expensive licenses. That means that the value of their offering (the license) rests on them (the government) limiting supply. Unfortunately, that system just doesn't work any more and the cities generally need more taxis and more flexibility in how they're run (while still maintaining a good level of service).
The clear answer is to issue more licenses/badges/medallions but this has the undesirable effect of diluting the investment of all those who have already bought into the scheme. Doing so would lead to demands for compensation for all those who would have their investments wiped out.
But Uber solves the problem for them - more service without the authorities having to actually dilute the license value themselves - win! Apparently they don't really care that all the people who bought into their scheme are getting screwed.
If someone thinks they aren't getting screwed then understand that taxi medallions in, say, Boston, have dropped from ~$700,000 at the start of last year to ~$450,000 - $500,000 now. Imagine YOU had taken out a loan (as is the way it works for owner-operators) for a $700K medallion and just one year later, that medallion is now worth $200K less. Your loan is still for $700K and you're still paying interest on that $700K, of course and the value is likely to drop even further as new drivers continue to work with Uber instead.
One would expect this to naturally reach an equilibrium such that licenses are much, much cheaper than they are now but for that to happen, you've financially ruined a whole load of drivers. In Boston (just because I was looking at it for my previous comment), half of all the medallions are owned by people who have 1-4 medallions. Some of them will be fine but others - especially those with just the one license - are likely to be in for some very hard times.
@dan1980: thank you for that insightful breakdown of the issue. I had absolutely no idea that licenses were bought/sold like that.
Sounds like the best outcome would be for the cities to buy back those medallions. In the meantime if I owned one is be looking to offload it quick.
you forgot Germany in the list. Uber is banned here - probably for poor grammer, it should be Über :-P
Basically, under German law, if you are plying for hire (i.e. you are transporting individuals for money), then you are either a bus / coach company carrying a large number of passengers in a single vehicle, or you are a taxi carrying a small number of passengers to a specific destination.
In Germany you need valid insurance for your vehicle. If you are plying for hire, you need commercial insurance, if you want commercial insurance for carrying passengers you need to show your taxi licence. No licence = no insurance = no registration plate.
If you try to drive with private insurance, you will lose your licence and face a hefty fine, if you are caught. If you have an accident, you will lose your licence, face a hefty fine and have to pay for all damages and injuries out of your own pocket.
Uber say they want to change the game. Fine, then change the game, but do it within the law; which means first securing valid insurance for your drivers, not putting them at risk of prosecution and your customers at risk of injury with no compensation (the driver will probably have to declare bankruptcy if he is faced with repair costs for all vehicles involved and injury compensation).
Also, as any passenger carrying for profit is classed as a taxi, the driver must currently be licenced, his vehicle must face a tougher inspection and will face regular random checks for safety, and it must have a "geeichte" meter. That means that the meter is calibrated and racks up a set fee per kilometer and over time, when sitting stationary in traffic. If the Uber vehicle fails any of these conditions, the driver will face a fine and won't be able to work until he and his vehicle meet these conditions.
@big_D
That clear wording is why Uber is banned there. In London, there is another category for 'minicabs' which have insurance and all that but are restricted for picking up 'hails' and from having meters. Before Uber the difference between them and taxis was clear. You would order a minicab to take you out for the night and they would honk in front of your door when they got there. You'd have a pre-arranged price for the trip and you'd pay it. On the way back, you'd stumble around for a taxi because it was an on-demand thing.
Uber blurs the line because you are essentially 'e'-hailing them, though it technically counts as booking them and, while they don't have a meter "installed", the phone app performs exactly the same function of providing a metered, per-km/mi fare.
And it's a great idea, it just needs to be managed with regard to the existing investment of taxi drivers.
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What i think is unfair about UBER is that they do not have to go through the same regulation as other Taxi drivers, e.g. in London. That makes it unfair.
Further more we have seen poor security which potentially means a rapist or murderer could be yyour driver.
I am all for competition but not for unfair competition.
Time and time again data like this can be added to other information in the public domain to remove the anonimity.
I for one will NOT be using Uber on the data issue alone.
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