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Uber's business model simply cannot survive in sensibly regulated markets when they have to follow the regulations. Uber is probably better than taxi services

Uber's business model simply cannot survive in sensibly regulated markets when they have to follow the regulations. Uber is probably better than taxi services in markets that lack basic safeguarding regulations or have questionable regulations like restricted tradable taxi medallions leading to high prices. But this is not the case in many places around the world.

Kurtz79 10y ago
I have no sympathy for Uber as a company, but (without having additional information beyond what it is provided in the article), it seems to me that a new law mas made ad-hoc to address Uber's rise specifically, not that they were already breaching existing regulation when they started operating in Denmark. Taxi drivers are a vocal and recognizable faction, while on the other hand there is the nebulous concept of what benefits the average "consumer/citizen". It makes little political sense to support the latter over the former.
- johanvts 10y ago
  The new law actually liberalized the market a lot and is pretty smart I think. We have had 'strict' regulation on taxis as long as I know, but the new law makes it easier to enter the market while still ensuring stuff like the drivers are trained, know first aid and pay taxes. It also manages to regulate taxi-driving as a business while not killing ride sharing. You can deduct any expenses related to a trip, and if the payment only covers costs the trip is defined as ride sharing, for which you don't have to be registered as a taxi driver. I think it makes sense to advocate a level playing field and having a situation where two companies are in the same market but one is heavily regulated and the other is not is not fair or desirable. Uber could stay on the danish market, but choose not to because they will not be able to denounce all responsibility for their employees which is a central part of their business plan.
  - Kurtz79 10y ago
    "I think it makes sense to advocate a level playing field and having a situation where two companies are in the same market but one is heavily regulated and the other is not is not fair or desirable." Absolutely. I think most countries in Europe have had a rigidly regulated environment for ride hauling because simply there was no real alternative, and the aim was to prevent the average Joe to start operating as an illegal taxi, with zero control on part of the authorities. Now that Uber, Lyft are a reality, it's more than fair to require they follow regulations as the other actors in the business, but at the same time laws should be up to date to reflect the new reality. It seems fair to me requiring that new ride haling companies can offer the same standards of quality as normal taxis, that the drivers they are properly compensated and pay taxes. Less so that they carry "Fare Meters", when the apps themselves offer the same functionality.
- kpil 10y ago
  Uber is having a similar problem in Sweden. The taxi market is possibly too unregulated with two-three larger regional or national companies that focus on quality and compete on good prices, and a bunch of scammers that try to have identical cars but much more expensive fares. Uber is only able to compete with the scammers somehow, and as they pay no tax, insurance, employment tax, social costs, etc, and use drivers accounts in the middle east for payments which probably is not a sold tax and money laundering strategy etc, it's not hard to see why.
  - bostand 10y ago
    Exactly what are you talking about? To me your comment reads like infowars compressed into four lines.
  - Kiro 10y ago
    Source on that last paragraph? Uber in Sweden is like any other taxi company with taximeters and yellow registration plates.
onion2k 10y ago
Uber's business model simply cannot survive in sensibly regulated markets when they have to follow the regulations. Uber could follow the regulations, charge approximately the same as a taxi, and still make a moderate profit. There's nothing about Uber's business model that says they have to be cheapest or have a monopoly. The only reason they choose not to do that is ambition (or greed if you're being less generous to them). This is just Uber showing governments around the world that they're willing to leave a market entirely if they don't get their own way. Uber are betting on their customers becoming vocal opponents of the regulation and lobbying their government to change the law in order to allow Uber back without the rules, and for other governments to become fearful of enforcing their regulations in case they anger Uber's customers too. It might work. On the other hand, maybe people aren't actually that bothered about which particular ride company they use, and Uber's strategy won't work. It'll be interesting to see what happens.
- spiderfarmer 10y ago
  "Uber are betting on their customers becoming vocal opponents of the regulation and lobbying their government to change the law in order to allow Uber back without the rules, and for other governments to become fearful of enforcing their regulations in case they anger Uber's customers too." In my country, Uber doesn't have a good reputation at all. People like the convenience, but that's about it. No way people are going to lobby for them.
  - jeppebemad 10y ago
    I'm from Copenhagen, and I'd say that's the case here too. I know lots of people who've never used Uber in Denmark, and those who have do it for the price. Taxis are easy to come by and they have waaay better service and more comfortable cars.
- ganfortran 10y ago
  > On the other hand, maybe people aren't actually that bothered about which particular ride company they use Which is indeed the case here. Why people would prefer one to another? Cheaper, or more drivers or both. Brand? Simply don't care, and Uber at this point has a notorious one. If there is demand (from both drivers and riders), I guess it take several months short to fill in the void Uber has left there. I think ride-hailing service is meant for local companies to excel(public relations, better communication with government and compliance with regulator), Uber simply cannot enjoy the level of monopoly Google and Facebook have, because at its heart, it is not a tech-driven business.
ovi256 10y ago
Mandating the use of an obsolete technology (taxi meter, when a smartphone + app + backend has the same capability) seems like sensible regulation to you ? That regulation was tailor-made to shut down Uber operations, as a favour to the taxi lobby.
- chopin 10y ago
  Afaik a taxi-meter is an approved device, at least somewhat tamper-resistant. Smartphone + app + backend is none of these.
  - Grue3 10y ago
    Is it tamper-resistant to a taxi driver driving in circles to screw over clueless tourists?
    - 50CNT 10y ago
      They're not even tamper resistant to clickers, which add additional pulses to the output of the tachometer the meter relies on to calculate fares.
  - Cthulhu_ 10y ago
    Those are at least verifiable by 3rd parties - in Uber's case, both the driver's and passengers' smartphones should match up in terms of what route they took. I guess a sophisticated enough malicious driver could set up a GPS spoof in their car, but honestly if they can do that they're working in the wrong industry.
  - sitepodmatt 10y ago
    Depends where I guess, certainly in Asia fast-running meters are not uncommon. To say a taxi meter is secure is like doing javascript client-side validation and no server-side whilst disabling right click. And approved by who? Vetted cryptographers?
  - tyingq 10y ago
    The most popular taxi cheat is to the take the long way around. Meters don't help you there. Also, meters don't show you the full trip price before you commit. Uber could perhaps fiddle around with map data, but the history would have to show the correct origin and destination, or it would be noticed. It's trivially easy, and free, to audit against Google maps. I don't trust Uber to be ethical, but cheating in this space would just be corporate suicide...they would easily be caught.
TsomArp 10y ago
Colombia is a highly regulated market but the taxi drivers manage to modify their fare meters to charge you more (either they are accelerated or they have a switch that makes it accelerate), they lie to you about the costs (if you are not from here hey can tell you a trip that is 18 is 35, like they tried on me). In fact, it is estimated that 80% or more of the taxis here would try to rob you. I agree that Uber goes against regulations, and their new dynamic fare is a steal on its own right, but the service is much more better than cabs.
- samsonradu 10y ago
  Same happened to me after a long flight to Malaysia. Going from airport to KL, meter shows 90MYR and the guy asks for 150MYR adding up tolls, night tax etc. What should I do, fight the guy for 10EUR? Note it was a licensed cab booked from the Airport counter. Used Uber for the rest of my vacation there and it was great.
  - princeb 10y ago
    the airport counter sells you a ticket, you give the ticket to the driver. no further payment is necessary.
    - sitepodmatt 10y ago
      There are two options. The pre-paid desk upstairs or the official taxi desk downstairs where it should run on meter (you pay 2myr for the privilege of using this desk for tiny bit of blue or red paper). Either way both should be regulated, safe and not a rip off. The taxi desk upstairs often with a single operator has long queues as tourists seem to asking for sightseeing advice, their horoscope, and then wanting to pay in cent coins (that's guess, it's annoying, KL is terrible airport, after almost as long as flight taxi-ing from runway to gate to queue another 40 minutes is not my thing)
      - samsonradu 10y ago
        Exactly, just took the 2 MYR ticket since I had no clue how much I should prepay.
tigershark 10y ago
How forcing them to add a fare meter is a sensible regulation? You already can track the whole travel in Uber and it is FAR FAR better than having a fare meter. In a foreign city I have no idea if the itinerary chosen by the driver is sensible or not and the fare meter for sure can't do anything in this regard.
- vmateixeira 10y ago
  Because you can fiscalize a fare meter, not someone's phone GPS tracker module.
- rmc 10y ago
  The meter is supposed to be inspectable to the local tax collectors who can ensure that the correct tax is paid.
  - stagbeetle 10y ago
    The incenvives are too screwed up for this to help consumers. If they undercharge, they get fined. If they overcharge, the tax authority gets more money. It's almost like a bribe.
mafribe 10y ago
this is not the case in many places around the world. Uber has one gigantic advantage over all local taxi services from the custormer's point of view: Uber's unified, location-independent interface. You put in your credic card once, you learn the UI once, and it works seamlessly all over the planet. (Same with AirBnB.) This is a heaven sent for the frequent international traveller. I understand why local taxi-driver lobbies are rent-seeking with anti-Uber legislation, but selflessly it aint.
Grue3 10y ago
>sensibly regulated Requiring fare meters when the price is agreed in advance is not sensible regulation.
malandrew 10y ago
Explain to me why having an actual physical meter and seat sensors are sensible regulation? To me, they are clearly barriers to entry that make it harder for individuals to participate in the sell side of this market. Neither are necessary to provide the service in a safe and trustworthy manner. They simply make it so people need to actually acquire special cars with the seat sensors and then go through additional bureaucratic hoops to get a physical meter installed. This is so obviously protectionism and anti-consumer, that I don't see how anyone can consider them sensible except the taxi cartel.

Kurtz79 10y ago

I have no sympathy for Uber as a company, but (without having additional information beyond what it is provided in the article), it seems to me that a new law mas made ad-hoc to address Uber's rise specifically, not that they were already breaching existing regulation when they started operating in Denmark. Taxi drivers are a vocal and recognizable faction, while on the other hand there is the nebulous concept of what benefits the average "consumer/citizen". It makes little political sense to support the latter over the former.

johanvts 10y ago
The new law actually liberalized the market a lot and is pretty smart I think. We have had 'strict' regulation on taxis as long as I know, but the new law makes it easier to enter the market while still ensuring stuff like the drivers are trained, know first aid and pay taxes. It also manages to regulate taxi-driving as a business while not killing ride sharing. You can deduct any expenses related to a trip, and if the payment only covers costs the trip is defined as ride sharing, for which you don't have to be registered as a taxi driver. I think it makes sense to advocate a level playing field and having a situation where two companies are in the same market but one is heavily regulated and the other is not is not fair or desirable. Uber could stay on the danish market, but choose not to because they will not be able to denounce all responsibility for their employees which is a central part of their business plan.
- Kurtz79 10y ago
  "I think it makes sense to advocate a level playing field and having a situation where two companies are in the same market but one is heavily regulated and the other is not is not fair or desirable." Absolutely. I think most countries in Europe have had a rigidly regulated environment for ride hauling because simply there was no real alternative, and the aim was to prevent the average Joe to start operating as an illegal taxi, with zero control on part of the authorities. Now that Uber, Lyft are a reality, it's more than fair to require they follow regulations as the other actors in the business, but at the same time laws should be up to date to reflect the new reality. It seems fair to me requiring that new ride haling companies can offer the same standards of quality as normal taxis, that the drivers they are properly compensated and pay taxes. Less so that they carry "Fare Meters", when the apps themselves offer the same functionality.
kpil 10y ago
Uber is having a similar problem in Sweden. The taxi market is possibly too unregulated with two-three larger regional or national companies that focus on quality and compete on good prices, and a bunch of scammers that try to have identical cars but much more expensive fares. Uber is only able to compete with the scammers somehow, and as they pay no tax, insurance, employment tax, social costs, etc, and use drivers accounts in the middle east for payments which probably is not a sold tax and money laundering strategy etc, it's not hard to see why.
- bostand 10y ago
  Exactly what are you talking about? To me your comment reads like infowars compressed into four lines.
- Kiro 10y ago
  Source on that last paragraph? Uber in Sweden is like any other taxi company with taximeters and yellow registration plates.

onion2k 10y ago

Uber's business model simply cannot survive in sensibly regulated markets when they have to follow the regulations. Uber could follow the regulations, charge approximately the same as a taxi, and still make a moderate profit. There's nothing about Uber's business model that says they have to be cheapest or have a monopoly. The only reason they choose not to do that is ambition (or greed if you're being less generous to them). This is just Uber showing governments around the world that they're willing to leave a market entirely if they don't get their own way. Uber are betting on their customers becoming vocal opponents of the regulation and lobbying their government to change the law in order to allow Uber back without the rules, and for other governments to become fearful of enforcing their regulations in case they anger Uber's customers too. It might work. On the other hand, maybe people aren't actually that bothered about which particular ride company they use, and Uber's strategy won't work. It'll be interesting to see what happens.

spiderfarmer 10y ago
"Uber are betting on their customers becoming vocal opponents of the regulation and lobbying their government to change the law in order to allow Uber back without the rules, and for other governments to become fearful of enforcing their regulations in case they anger Uber's customers too." In my country, Uber doesn't have a good reputation at all. People like the convenience, but that's about it. No way people are going to lobby for them.
- jeppebemad 10y ago
  I'm from Copenhagen, and I'd say that's the case here too. I know lots of people who've never used Uber in Denmark, and those who have do it for the price. Taxis are easy to come by and they have waaay better service and more comfortable cars.
ganfortran 10y ago
> On the other hand, maybe people aren't actually that bothered about which particular ride company they use Which is indeed the case here. Why people would prefer one to another? Cheaper, or more drivers or both. Brand? Simply don't care, and Uber at this point has a notorious one. If there is demand (from both drivers and riders), I guess it take several months short to fill in the void Uber has left there. I think ride-hailing service is meant for local companies to excel(public relations, better communication with government and compliance with regulator), Uber simply cannot enjoy the level of monopoly Google and Facebook have, because at its heart, it is not a tech-driven business.

ovi256 10y ago

Mandating the use of an obsolete technology (taxi meter, when a smartphone + app + backend has the same capability) seems like sensible regulation to you ? That regulation was tailor-made to shut down Uber operations, as a favour to the taxi lobby.

chopin 10y ago
Afaik a taxi-meter is an approved device, at least somewhat tamper-resistant. Smartphone + app + backend is none of these.
- Grue3 10y ago
  Is it tamper-resistant to a taxi driver driving in circles to screw over clueless tourists?
  - 50CNT 10y ago
    They're not even tamper resistant to clickers, which add additional pulses to the output of the tachometer the meter relies on to calculate fares.
- Cthulhu_ 10y ago
  Those are at least verifiable by 3rd parties - in Uber's case, both the driver's and passengers' smartphones should match up in terms of what route they took. I guess a sophisticated enough malicious driver could set up a GPS spoof in their car, but honestly if they can do that they're working in the wrong industry.
- sitepodmatt 10y ago
  Depends where I guess, certainly in Asia fast-running meters are not uncommon. To say a taxi meter is secure is like doing javascript client-side validation and no server-side whilst disabling right click. And approved by who? Vetted cryptographers?
- tyingq 10y ago
  The most popular taxi cheat is to the take the long way around. Meters don't help you there. Also, meters don't show you the full trip price before you commit. Uber could perhaps fiddle around with map data, but the history would have to show the correct origin and destination, or it would be noticed. It's trivially easy, and free, to audit against Google maps. I don't trust Uber to be ethical, but cheating in this space would just be corporate suicide...they would easily be caught.

TsomArp 10y ago

Colombia is a highly regulated market but the taxi drivers manage to modify their fare meters to charge you more (either they are accelerated or they have a switch that makes it accelerate), they lie to you about the costs (if you are not from here hey can tell you a trip that is 18 is 35, like they tried on me). In fact, it is estimated that 80% or more of the taxis here would try to rob you. I agree that Uber goes against regulations, and their new dynamic fare is a steal on its own right, but the service is much more better than cabs.

samsonradu 10y ago
Same happened to me after a long flight to Malaysia. Going from airport to KL, meter shows 90MYR and the guy asks for 150MYR adding up tolls, night tax etc. What should I do, fight the guy for 10EUR? Note it was a licensed cab booked from the Airport counter. Used Uber for the rest of my vacation there and it was great.
- princeb 10y ago
  the airport counter sells you a ticket, you give the ticket to the driver. no further payment is necessary.
  - sitepodmatt 10y ago
    There are two options. The pre-paid desk upstairs or the official taxi desk downstairs where it should run on meter (you pay 2myr for the privilege of using this desk for tiny bit of blue or red paper). Either way both should be regulated, safe and not a rip off. The taxi desk upstairs often with a single operator has long queues as tourists seem to asking for sightseeing advice, their horoscope, and then wanting to pay in cent coins (that's guess, it's annoying, KL is terrible airport, after almost as long as flight taxi-ing from runway to gate to queue another 40 minutes is not my thing)
    - samsonradu 10y ago
      Exactly, just took the 2 MYR ticket since I had no clue how much I should prepay.

tigershark 10y ago

How forcing them to add a fare meter is a sensible regulation? You already can track the whole travel in Uber and it is FAR FAR better than having a fare meter. In a foreign city I have no idea if the itinerary chosen by the driver is sensible or not and the fare meter for sure can't do anything in this regard.

vmateixeira 10y ago
Because you can fiscalize a fare meter, not someone's phone GPS tracker module.
rmc 10y ago
The meter is supposed to be inspectable to the local tax collectors who can ensure that the correct tax is paid.
- stagbeetle 10y ago
  The incenvives are too screwed up for this to help consumers. If they undercharge, they get fined. If they overcharge, the tax authority gets more money. It's almost like a bribe.

mafribe 10y ago

this is not the case in many places around the world. Uber has one gigantic advantage over all local taxi services from the custormer's point of view: Uber's unified, location-independent interface. You put in your credic card once, you learn the UI once, and it works seamlessly all over the planet. (Same with AirBnB.) This is a heaven sent for the frequent international traveller. I understand why local taxi-driver lobbies are rent-seeking with anti-Uber legislation, but selflessly it aint.

Grue3 10y ago

>sensibly regulated Requiring fare meters when the price is agreed in advance is not sensible regulation.

malandrew 10y ago

Explain to me why having an actual physical meter and seat sensors are sensible regulation? To me, they are clearly barriers to entry that make it harder for individuals to participate in the sell side of this market. Neither are necessary to provide the service in a safe and trustworthy manner. They simply make it so people need to actually acquire special cars with the seat sensors and then go through additional bureaucratic hoops to get a physical meter installed. This is so obviously protectionism and anti-consumer, that I don't see how anyone can consider them sensible except the taxi cartel.