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Edit: Please don't down-vote this. Up-vote it and argue articulately against it! The only thing more embarrassing for authorities than having propped up a cor

Edit: Please don't down-vote this. Up-vote it and argue articulately against it! The only thing more embarrassing for authorities than having propped up a corrupt medallion taxi system for decades is this sort of probe. In order to disrupt the corrupt medallion system it took billions of dollars and algorithms to evade the officials who had been tasked by the corrupt medallion industry to leverage small compliance technicalities to sabotage Uber in specific markets. Every municipality that had a medallion system that was disrupted by Uber was effectively humiliated. Uber revealed just how inefficient and profligate those systems are. The quality of car service everywhere Uber serves is supremely better than it had been before Uber. We can now get a car in minutes and see the ETA update as the driver approaches. So many of us found it infuriating to call 333-TAXI (or equivalent) and be told "5 to 30 minutes" no matter how much demand was going on. Then when the cab failed to show up after 40 minutes, a follow-up call would yield "it should be another 5 to 30 minutes" after which the operator would simply hang up. It took Uber's vision (and YC's vision in supporting it) to move the world forward into the future. We should all realize that the officials Uber had to fool using its algorithms were the foot soldiers of backwardness and corruption.

gotothedoctor 9y ago
I don't think any of this is true (eg some cities have medallion systems, some don't; some are more & less corrupt). But for argument's sake, lets say all of it is true. So what? If Uber's big innovation was being able to order a car via an app, its neither that protectable or even all that innovative. Afterall Google was the 11st search engine. Given that each of Uber's rides is significantly subsidized by VCs, it remains unclear if such a service could ever be profitable. And now every competitor, be it Lyft or taxi companies, offers the same service, with exactly the same drivers & exactly the same cars. Are you suggesting that no matter what Uber & its execs do, folks are supposed to be loyal to Uber because a few years ago it was a hassle to get a taxi?If Uber disappeared, do you really think their competitors would suddenly stop using apps? Uber
- grandalf 9y ago
  > for argument's sake, lets say all of it is true It is :) > If Uber's big innovation was being able to order a car via an app That's like saying that it would be trivial to set up a rival to the post office or a rival airline industry. > its neither that protectable or even all that innovative Correct, which is why the medallion industry had to get in bed with local politicians to protect itself. Once this was in place (the protection) innovation was irrelevant as anyone who has ridden in a medallion cab pre-Uber can attest. > Given that each of Uber's rides is significantly subsidized by VCs, it remains unclear if such a service could ever be profitable. Are you expressing doubt about whether people will need taxi style transit? I'd say it's one of the most proven business models in the world. The "subsidy" you mention allows Uber to grow more quickly than it otherwise would, but late stage investors are not stupid and would not pour money in if the economics were not sound. I don't actually care whether Uber ends up profitable in the long term or not. I'm not an investor, though I am a happy customer. But I do want a fair fight, and the DOJ picking on Uber is a major misallocation of resources. > Are you suggesting that no matter what Uber & its execs do, folks are supposed to be loyal to Uber Not at all. I myself am not "loyal". A few months ago I made a post on HN in which I reached the conclusion that Travis probably ought to go. But making that argument does not mean I don't have tremendous respect for the company he built and the obstacles he overcame to make it happen. Travis is clearly an amazingly talented person who seems to have some blind spots as a manager. But let's not pretend someone like Eric Schmidt would ever start a company like Uber. Seasoned, wise managers are relevant when a company has generally plateaued. This does not justify the harm caused by bad HR practices and poor judgment in dealing with the treatment of women at Uber, but let's not forget that one of the problematic hires (perhaps scapegoats) at Uber had come from Schmidt's google where he'd had many years of success but had not disclosed the disciplinary circumstances of his departure from Google. > Uber disappeared, do you really think their competitors would suddenly stop using apps This is farfetched, and not what I was arguing. My point is that Uber came up with a way to fight against one of the most entrenched industries in the world and win. This is generally what startups are supposed to do... create Schumpeterian growth which leaves a trail of destruction of the old edifices of power. It may be that Uber simply won the first round of battles but that the war will eventually be won by the cronies and insiders who cozy up to local politicians and held the taxi industry hostage for so long. They have not given up easily. In some cities they are still strong and don't plan to go anywhere. Before you decide to jump on the bandwagon against Uber, think about the many areas of life in which entrenched and backward systems oppress us and hold back progress. You are helping them drag us back into the darkness.
marris 9y ago
Thank you for posting this. Overall, I think that the good done by Uber around the world (primarily for consumer surplus, maybe not so much for drivers) totally dwarfs the various complaints I've heard about breaking local regulations. In practice, it takes an enormous amount of time and energy to roll back regulations in one jurisdiction (just look at the state of occupational licensing in various US states). In that environment, it takes someone with fairly thick skin to "just build the thing" and show consumers what they were missing. Personal failings aside, I think we owe Travis and the rest of Uber an enormous debt for showing us what's possible.
paulsutter 9y ago
Lyft isn't facing a DOJ investigation
- grandalf 9y ago
  Lyft lagged in new markets and allowed Uber to establish the driver pool and consumer awareness. I'd say Lyft is a completely different investment than Uber. Lyft has made smart decisions but is generally "drafting" behind Uber. I'm not an investor in either, but one is good at leading, the other is good at following.
  - watwut 9y ago
    Breaking the law gives one competitive advantage. So does being unethical. Sad that some see it as "leadership".
    - grandalf 9y ago
      > Breaking the law What percentage of laws in the US do you think it is reasonable to break? Unless you answer 0% you should justify your comment by explaining why the laws that Uber broke are just and important. The laws Uber broke to evade regulators are laws that were put in place at the behest of the corrupt taxi industry to protect it from competition.
paulsutter 9y ago
Lyft isn't facing a federal criminal probe
matt4077 9y ago
There are methods to changing the law if you disagree. The advantage Uber had in this market, however, was simply choosing a different split in a zero-sum game: The customer's benefits came right out of the driver's pay check (and health insurance, and pension funds etc).
- grandalf 9y ago
  > The customer's benefits came right out of the driver's pay check (and health insurance, and pension funds etc). I do think Uber has made (and continues to make) a strategic mistake by not becoming the market leader in gig economy support services/systems for its drivers. But there is nothing stopping an Uber driver from setting up a SEP IRA, signing up for ACA, etc. Those costs are the same whether the employee is 1099 or W2. Many Uber drivers already have a 9-5 job and their Uber money is extra income. But for drivers who are full time, 1099 status can lead to bad life planning. I'm not praising W2 employment as a panacea though, as I fear you might be. Many companies offer mediocre or nonexistent life planning (pensions, tax planning, health insurance) options, and so it was really an opportunity for Uber to go above and beyond. I think the future of systems like Uber (service discovery, dispatch, bidirectional karma, etc.) will ultimately be handled through non-profit infrastructure. Without corrupt local medallion services to compete against, an Uber-size war chest is not really needed. Uber could also have allocated a class of stock for drivers and awarded some fraction for each dollar earned, allowing drivers (especially early ones) to get in on the leverage. But it didn't, and it's likely too late. > There are methods to changing the law if you disagree. I'm curious what percentage of laws you think are just and/or should be obeyed on principle and not as part of a cost-of-punishment calculus.
  - matt4077 9y ago
    > I'm curious what percentage of laws you think are just and/or should be obeyed on principle and not as part of a cost-of-punishment calculus. There isn't a single law that I obey as part of a cost-of-punishment calculus. Of the laws I know to any meaningful degree, I'd judge maybe 70% as essentially good, defer to those who wrote them on about 20% that deal with subject matter I'm unfamiliar with, and (would) follow around 9% even though I disagree, because they were democratically enacted. Of course there's a vast universe of law I'm completely unaware of, such as the financial sector. But whenever I had to deal with some more specialised parts of the law, I found them to be mostly reasonable.

gotothedoctor 9y ago

I don't think any of this is true (eg some cities have medallion systems, some don't; some are more & less corrupt). But for argument's sake, lets say all of it is true. So what? If Uber's big innovation was being able to order a car via an app, its neither that protectable or even all that innovative. Afterall Google was the 11st search engine. Given that each of Uber's rides is significantly subsidized by VCs, it remains unclear if such a service could ever be profitable. And now every competitor, be it Lyft or taxi companies, offers the same service, with exactly the same drivers & exactly the same cars. Are you suggesting that no matter what Uber & its execs do, folks are supposed to be loyal to Uber because a few years ago it was a hassle to get a taxi?If Uber disappeared, do you really think their competitors would suddenly stop using apps? Uber

grandalf 9y ago
> for argument's sake, lets say all of it is true It is :) > If Uber's big innovation was being able to order a car via an app That's like saying that it would be trivial to set up a rival to the post office or a rival airline industry. > its neither that protectable or even all that innovative Correct, which is why the medallion industry had to get in bed with local politicians to protect itself. Once this was in place (the protection) innovation was irrelevant as anyone who has ridden in a medallion cab pre-Uber can attest. > Given that each of Uber's rides is significantly subsidized by VCs, it remains unclear if such a service could ever be profitable. Are you expressing doubt about whether people will need taxi style transit? I'd say it's one of the most proven business models in the world. The "subsidy" you mention allows Uber to grow more quickly than it otherwise would, but late stage investors are not stupid and would not pour money in if the economics were not sound. I don't actually care whether Uber ends up profitable in the long term or not. I'm not an investor, though I am a happy customer. But I do want a fair fight, and the DOJ picking on Uber is a major misallocation of resources. > Are you suggesting that no matter what Uber & its execs do, folks are supposed to be loyal to Uber Not at all. I myself am not "loyal". A few months ago I made a post on HN in which I reached the conclusion that Travis probably ought to go. But making that argument does not mean I don't have tremendous respect for the company he built and the obstacles he overcame to make it happen. Travis is clearly an amazingly talented person who seems to have some blind spots as a manager. But let's not pretend someone like Eric Schmidt would ever start a company like Uber. Seasoned, wise managers are relevant when a company has generally plateaued. This does not justify the harm caused by bad HR practices and poor judgment in dealing with the treatment of women at Uber, but let's not forget that one of the problematic hires (perhaps scapegoats) at Uber had come from Schmidt's google where he'd had many years of success but had not disclosed the disciplinary circumstances of his departure from Google. > Uber disappeared, do you really think their competitors would suddenly stop using apps This is farfetched, and not what I was arguing. My point is that Uber came up with a way to fight against one of the most entrenched industries in the world and win. This is generally what startups are supposed to do... create Schumpeterian growth which leaves a trail of destruction of the old edifices of power. It may be that Uber simply won the first round of battles but that the war will eventually be won by the cronies and insiders who cozy up to local politicians and held the taxi industry hostage for so long. They have not given up easily. In some cities they are still strong and don't plan to go anywhere. Before you decide to jump on the bandwagon against Uber, think about the many areas of life in which entrenched and backward systems oppress us and hold back progress. You are helping them drag us back into the darkness.

marris 9y ago

Thank you for posting this. Overall, I think that the good done by Uber around the world (primarily for consumer surplus, maybe not so much for drivers) totally dwarfs the various complaints I've heard about breaking local regulations. In practice, it takes an enormous amount of time and energy to roll back regulations in one jurisdiction (just look at the state of occupational licensing in various US states). In that environment, it takes someone with fairly thick skin to "just build the thing" and show consumers what they were missing. Personal failings aside, I think we owe Travis and the rest of Uber an enormous debt for showing us what's possible.

paulsutter 9y ago

Lyft isn't facing a DOJ investigation

grandalf 9y ago
Lyft lagged in new markets and allowed Uber to establish the driver pool and consumer awareness. I'd say Lyft is a completely different investment than Uber. Lyft has made smart decisions but is generally "drafting" behind Uber. I'm not an investor in either, but one is good at leading, the other is good at following.
- watwut 9y ago
  Breaking the law gives one competitive advantage. So does being unethical. Sad that some see it as "leadership".
  - grandalf 9y ago
    > Breaking the law What percentage of laws in the US do you think it is reasonable to break? Unless you answer 0% you should justify your comment by explaining why the laws that Uber broke are just and important. The laws Uber broke to evade regulators are laws that were put in place at the behest of the corrupt taxi industry to protect it from competition.

paulsutter 9y ago

Lyft isn't facing a federal criminal probe

matt4077 9y ago

There are methods to changing the law if you disagree. The advantage Uber had in this market, however, was simply choosing a different split in a zero-sum game: The customer's benefits came right out of the driver's pay check (and health insurance, and pension funds etc).

grandalf 9y ago
> The customer's benefits came right out of the driver's pay check (and health insurance, and pension funds etc). I do think Uber has made (and continues to make) a strategic mistake by not becoming the market leader in gig economy support services/systems for its drivers. But there is nothing stopping an Uber driver from setting up a SEP IRA, signing up for ACA, etc. Those costs are the same whether the employee is 1099 or W2. Many Uber drivers already have a 9-5 job and their Uber money is extra income. But for drivers who are full time, 1099 status can lead to bad life planning. I'm not praising W2 employment as a panacea though, as I fear you might be. Many companies offer mediocre or nonexistent life planning (pensions, tax planning, health insurance) options, and so it was really an opportunity for Uber to go above and beyond. I think the future of systems like Uber (service discovery, dispatch, bidirectional karma, etc.) will ultimately be handled through non-profit infrastructure. Without corrupt local medallion services to compete against, an Uber-size war chest is not really needed. Uber could also have allocated a class of stock for drivers and awarded some fraction for each dollar earned, allowing drivers (especially early ones) to get in on the leverage. But it didn't, and it's likely too late. > There are methods to changing the law if you disagree. I'm curious what percentage of laws you think are just and/or should be obeyed on principle and not as part of a cost-of-punishment calculus.
- matt4077 9y ago
  > I'm curious what percentage of laws you think are just and/or should be obeyed on principle and not as part of a cost-of-punishment calculus. There isn't a single law that I obey as part of a cost-of-punishment calculus. Of the laws I know to any meaningful degree, I'd judge maybe 70% as essentially good, defer to those who wrote them on about 20% that deal with subject matter I'm unfamiliar with, and (would) follow around 9% even though I disagree, because they were democratically enacted. Of course there's a vast universe of law I'm completely unaware of, such as the financial sector. But whenever I had to deal with some more specialised parts of the law, I found them to be mostly reasonable.