5 ms·

UberCab Ordered to Cease And Desist

104 points by tswicegood 16y ago

tswicegood 16y ago
I'm putting money on UberCab becoming a members-only service/co-op type system where you have to be a member in order to request a car. I'm not intimately familiar with the taxi laws, but I bet they don't specify what private organizations can do.
- llimllib 16y ago
  > I'm not intimately familiar with the taxi laws, but I bet they don't specify what private organizations can do. Huh? They have to. They don't let private limo organizations pick you up without a 1-hour reservation, for example, as stated in the article. Furthermore, Ubercab already is a private organization. I'm sure I'm missing something, can you explain why it would somehow become legal if it was a members-only organization?
  - defen 16y ago
    I can open a private, members only club which serves alcohol past the traditional last-call time. In the same way, Ubercab could charge a membership fee, and then only people who are members can be picked up by Ubercab. (I'm not a lawyer so I don't know if this is actually possible, I'm just trying to rephrase tswicegood's argument.)
    - goatforce5 16y ago
      Yes, in the same way it becomes totally legal to sell cocaine as long as you only sell to members of your private club. (Note: IANAL.)
      - defen 16y ago
        It's almost never legal to possess cocaine in the U.S. - it's a schedule II drug. Alcohol is not a controlled substance. AFAIK, I (as a private citizen - not a business) am allowed to serve alcohol to anyone I choose, as long as they are over 21 years of age.
      - stcredzero 16y ago
        Catching a ride in a car is not a schedule 2 drug, fortunately.
  - gravesryan 16y ago
    The regulations read that a livery services ride must be "pre-arranged". We've not seen the hour prior requirement in any law. If it does exist please send it our way, (info@ubercab.com) but we believe that this is opinion not fact.
    - llimllib 16y ago
      I was going off the article, I have no idea. Anyway, I hope it's clear that I wish you the best of luck fighting this nonsense.
    - anigbrowl 16y ago
      I think you should post the C&D order, actually, so as to put the focus on the MTA rather than wasting your time fending off uninformed speculation. It looks to me as if the $5,000/day fine they're speaking of refers to a modification of the Transportation code creating (among other things) a new offense of 'running a dispatch service without a permit,' which was passed by the SFMTA baord just last Tuesday - although it's still questionable whether or not it would apply to your firm. Regardless, it has not yet been made law by the Board of Supervisors, nor is it on their legislative agenda for next week's meeting. From what I can see, it can takes months for something to work its way up the Supervisors' calendar. Of course, a lot depends on what sort of lobbying power the Taxi establishment has at City Hall, but it's fair to assume they have years of experience in working the system. http://www.sfmta.com/cms/cmta/documents/10-19-10calendaritemsredline.pdf http://www.sfmta.com/cms/cmta/documents/10-19-10calendaritem... IANAL, mind; just my personal views. I've developed an unhealthy interest in the (dys)function of my local government.
  - sp4rki 16y ago
    It's my understanding that the hour reservation specifics are basically FUD. Since when can you not call a limo service and say "I need a limo for right NOW! Do you have any?", because I'm pretty sure you can and they will send a limo your way if possible.
joshstrike 16y ago
I actually had this idea when I had dropped out of web design and became a taxi driver for a few years in 2001. It's a natural. However: "Taxi dispatchers make money on tips..." is an incorrect statement. Taxi dispatchers make money on BRIBES. Drivers do not tip out dispatchers. Nor do drivers' tips go to the company. What dispatchers euphemistically refer to as "tips" are actually bribes paid to them by some cab drivers to refer the best fares to those drivers - usually at the expense of the passenger, who has to wait outside longer for their cab because a closer driver was not dispatched. The exact reason why UberCab or similar services ARE such a good idea is that they can improve the customer experience by cutting out dispatcher corruption.
whakojacko 16y ago
"Taxi dispatchers make money on tips. Ubercab threatens dispatchers’ way of earning a living. Limos have to prebook an hour in advance, only licensed taxis can pick someone up right away by San Francisco law, yet Ubercab picks people up right away, yet doesn’t have a taxi license." Not like you can get a taxi in under an hour in SF anyways ;) Seriously, this just validates their model and I hope they can figure this out.
corin_ 16y ago
Maybe I'm just misinformed but... basically they're running a taxi service without a license to do that, then acting surprised when the city calls them on it? There's a taxi company I use whenever I'm in London called Addison Lee, and they've done the same as UberCab - using nice technology to know where you are, where the nearest available cars are, how long it will take for a car to get to you... In actual fact, at least based on http://www.ubercab.com/learn http://www.ubercab.com/learn, AdLee is better: it has all the benefits of UberCab, plus they tell you the price of the journey before you book the car (it won't become more expensive if you get stuck in traffic, or if the driver takes a longer route), which always works out cheaper than a black cab, in my experience. Oh, and in adition to letting you pay with the credit card on your account, you can chose to pay by cash if you so wish. Anyway, my point? Seems that Addison Lee have been (albeit in a different city/country) doing what UberCab is doing, slightly better, and for quite a bit longer: and they actually bothered to pay to be a licensed taxi provider, meaning that the London officials don't have a problem with them.
- josefresco 16y ago
  Maybe taxi license requirements are vastly different between the two countries making it prohibitively expensive or unrealistic to do the same in the US?
  - corin_ 16y ago
    I couldn't comment on the costs involved in either country, but that really isn't relevant. If you can't balance a company's finances without saying "we won't follow the law because it's too expensive" then you're doing something wrong. That argument sounds semi-reasonable when coming from a teenager downloading films illegaly, not from a serious company avoiding paying for a license it needs.
    - deleted 16y ago
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    - uvdiv 16y ago
      >If you can't balance a company's finances without saying "we won't follow the law because it's too expensive" then you're doing something wrong. No, it's the law that is wrong. It is corrupt, it is repressive, it is evil. First of all, you can't just "pay for a license" to operate a taxi in S.F., because competition is illegal. The industry is a closed, city-enforced cartel, and the taxi "licenses" -- "medallions" -- first of all, have a mandatory cap of 1,400 taxis, secondly, are "allocated to individual drivers on the basis of seniority on a waiting list": http://www.sfbg.com/politics/2010/02/24/feb-26-cab-industry-changes-radically http://www.sfbg.com/politics/2010/02/24/feb-26-cab-industry-... Your standard labor cartel. Even better. They are piloting a program to "liberalize" the "licensing" (that SFBG news story), which mean under certain conditions you can actually "pay for a license" -- at a cost of $250,000 apiece. Although, naturally, the government quotas are still in effect, and you have to be a S.F. taxi union member to begin with, and who gets to buy the licenses is in order of seniority, etc., etc.: >Under the pilot program, only certain medallions can be sold: those held by individuals 70 years old or older or who are permanently disabled and cannot fulfill the driving requirement. While no medallion holder is required to sell, only those who elect to participate in the pilot program have the option to sell at this time. The other set of medallions being sold are those in the possession of the SFMTA due to the death of a medallion holder or through revocation proceedings. The price for a medallion is $250,000. >The medallion buyers are subject to the same rules as other current medallion holders, such as the full-time driving requirement and driving a San Francisco taxi for at least four of the past five years. Under the pilot program, available medallions are offered to qualified buyers in the order of seniority on the waiting list and after that in order of the driver A-Card permit seniority. The decision to buy is voluntary, but interested buyers had to notify the SFMTA of their interest in participating in the pilot. http://www.sfmta.com/cms/apress/SFMTAAnnouncesFirstTaxiMedallionSale.htm http://www.sfmta.com/cms/apress/SFMTAAnnouncesFirstTaxiMedal... More about S.F. taxi licenses, from the cartel's own webpage: http://www.medallionholders.com/medallions.html http://www.medallionholders.com/medallions.html Many other union-infected city governments do the same thing. NYC stands out: its taxi "licenses" now cost $825,000 each: http://www.businessweek.com/news/2010-08-06/nyc-taxi-medallions-wheel-in-profits-rivaling-s-p-500.html http://www.businessweek.com/news/2010-08-06/nyc-taxi-medalli... Disclaimer: IANAL, all I know is what I read in news articles.
sriramk 16y ago
I think there is a pattern across both UberCan and AirBnb where both are facing opposition from existing, regulated industries (taxi services and hotels respectively). Among all the posturing essentially meant to protect their existing businesses, I do think they have one valid point - that they both skirt around laws and regs in place. Though a lot of these laws and regulations are outdated/driven by special interests, some of them are in place for a reason. For example, not having hotels in residential areas so that neighbors aren't disturbed. Or having safety training for drivers of cabs. I do worry about the risk that UberCab/AirBnb could cause to its users (or others indirectly impacted). In both cases, the existing industries aren't doing themselves any favors. The argument around existing dispatchers maybe not making a living anymore - if someone else provides a better service than I do, it isn't their fault if I can't make money anymore. Reading the comments on the cab drivers' blog [1] is a bit sad. One of the commenters recognizes how good Ubercab is but uses that as an argument on why they should be shut down, instead of going "Hey, what if we started doing some of the things they do and improve?" http://phantomcabdriverphites.blogspot.com/2010/09/tac-iii-part-2.html http://phantomcabdriverphites.blogspot.com/2010/09/tac-iii-p...
- pavel_lishin 16y ago
  The best argument I've heard against AirBNB is that some people are buying up property and basically setting up hovels that they're renting out. Unsafe, unclean, miserable places to live. But hell, I've stayed in shitty motels where the only thing keeping the carpets glued to the floor was the roach shit.
  - callmeed 16y ago
    I think review systems will weed out the crappy, unclean places. The best argument I've heard is the liability issue. Americans are sue-happy. One slip in the shower or bad car accident and then what? Are AirBnB and UberCab totally immune from litigation?
    - smackfu 16y ago
      Yeah, just need one sap to suffer through a bad night and write that bad review. Hope it isn't you.
jrockway 16y ago
This seems like the perfect business to run from outside of the US. To run a traditional taxi company, you need to have a presence in the area where the taxicabs are. To run a website that connects two people together, you can be anywhere. And you are outside of the legal reach of the City of San Francisco. Sure, the users will be violating some city regulation, but that, like file sharing, is unprofitable to follow up on. (AirBnB is in a similar situation. No need to give the irritated local governments a legal target.)
- corin_ 16y ago
  Unless they relocate all drivers to live outside the US they're going to have a slight problem, I think...
  - jrockway 16y ago
    The drivers are already licensed. They can drive wherever they want to, and pick up whomever they want to. The specific legal problem that the article mentions is that operating the dispatching company is illegal.
    - corin_ 16y ago
      Presumably these two issues would still exist: - Its cars don’t have insurance equivalent to taxis’ insurance. - Limos in U.S. cities usually have to prebook an hour in advance, by law
      - uvdiv 16y ago
        The overriding issue is that there is a taxi cartel and the city enforces its quotas: http://www.medallionholders.com/medallions.html http://www.medallionholders.com/medallions.html You can't just pay for insurance and be legal. You're not allowed to compete, period.
      - jrockway 16y ago
        OK, fine, I guess. I propose the following revised business model for UberCab: Close up shop, return the money to the investors, and go on welfare instead. Nobody ever got rich without facing problems. UberCab can either fight the system, or they can do something else. For a site that caters to people interested in startups, there sure are a lot of defeatist comments here...
zachware 16y ago
The conflict was inevitable but as we often see in business, old players use regulation, unions and back room deals to protect their markets. Look at the RIAA, TV and movie industries. The technology is available to bring content to any device, anytime but they use regulation to stop it. It's bullshit. SF taxis are inefficient and difficult to use. Ubercab solves a problem and calls out just how ridiculous the SF Taxi system is. Instead of fighting to make their business more relevant, the taxi unions fight with regulation. I use Ubercab a lot. Why? * Because a car comes to me in a few minutes. * I don't have to stand in the rain and wonder if the illuminated taxi light means the taxi will stop or not. * I don't have to wonder if the cab takes cards or if the driver will simply refuse to take them even if his company does. * Most importantly, I don't have to hold on for dear life wondering if I'm going to die before i get where I'm going. Let's all stand up and say screw you unions. Ubercab is an innovator. SF taxis, be more efficient and you'll win. Otherwise, get out of the way.
- deleted 16y ago
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tlrobinson 16y ago
This sounds familiar: "Ubercab threatens dispatchers’ way of earning a living" Oh, yeah: "[TECHNOLOGY] threatens [PROFESSION]s' way of earning a living" Not a valid argument.
- eli 16y ago
  Yeah, but neither is ignoring the law because you disagree with it.
  - AngryParsley 16y ago
    I think "ignoring the law because you disagree with it" is called civil disobedience. Although the term usually means individuals breaking laws for moral reasons, not companies doing it for efficiency and profit. Edit: I just wanted to point out that it is sometimes valid to ignore a law because you disagree with it. I'm not saying Ubercab is in the right.
    - eli 16y ago
      And they people who do it usually plan to be arrested. Not sure that makes for a great business plan, but I'd be happy to be proven wrong.
    - gloob 16y ago
      Perhaps I'm just old-fashioned, but the argument "Companies have the right to ignore the law if doing so increases profits" seems rather...unconventional.
      - AngryParsley 16y ago
        That is twisting my words beyond even the most uncharitable reading.
        gloob 16y ago
        The charitable reading of your words, if I didn't misunderstand, is "many people think that people are sometimes justified in ignoring the law, depending on the situation." That's more or less a truism. Edit: Upvoted you back to 1.
forensic 16y ago
ubercab could relocate their business to russia. SF customers and drivers could still pay for the app. let's see them regulate that I want to make a taxi dispatcher that is outsourced to an Indian call centre. These dispatchers don't realize how deeply obsolete they are.
- ceejayoz 16y ago
  > let's see them regulate that Regulating the dispatchers would be difficult, but they could easily go after the owner/operators of the cars involved in actually transporting folks.
  - forensic 16y ago
    What if they decentralize it even more? I'm imagining regular drivers (like me) being txt'd when there is a nearby person who wants a ride. Like hitchhiking but using GPS and money. The hitchhiker would specify his destination and how much he is willing to pay. The software would know my location as well as destination (optional) and notify me when I'm near him. Make everyone into a taxi driver. For added value you could also give individuals special badges and such that certify their driving credentials, and let the buyers decide how much their driving credentials are worth. Credentials could be on a graded scale: - Confirmed driver's license - Confirmed professional driving certification Naturally you'd have a reputation system where passengers can rate the quality of the drivers, and drivers could respond to the criticisms. Decentralized taxi service. The biggest hurdle is reaching critical mass of users, which UberCab has achieved. I want to see them destroy the conventional taxi industry (disruptive technology makes me tingle)
    - evgen 16y ago
      Imagine you get a text from a person who wants a ride. You pick them up, arrange a fee, deliver them to the destination, accept the money, and then get arrested for being an unlicensed cab operator. How many arrests would it take before your services is a dim memory? How long would it take if the law was modified slightly so that the car used in the "criminal enterprise" was impounded as evidence until the case was dealt with by the court? The risk is entirely upon the driver, who, by the way the service is structured, must risk a large chunk of capital (their car) just to participate.
callmeed 16y ago
So is ubercab connecting people with "car services" that aren't licensed taxi companies? Are these the drivers you see often in NYC when arriving at the airport? My understanding is that there are risks to using such services (like if you leave something in the vehicle you're unlikely to recover it whereas a taxi co. can usually track it down). True?
- jon_dahl 16y ago
  I think it's four or five steps up from the rogue drivers at NYC airports. The drivers are licensed limo drivers, and everything is official/on-the-books.
johnglasgow 16y ago
Three points: 1. Sounds like UberCab should look into licensing out their platform to existing cab companies. It would mean lower margins, but they can quickly scale throughout the US and beyond much faster. 2. UberCab's blog post is arrogant. Did they really think they can avoid paying expensive licensing fees because they are using black cars instead of yellow cabs? Taxi licenses are very expensive and a lucrative revenue source for every major city. A taxi seat can cost as much as 1 million to purchase in NYC, and I know other cities such as SF and LV are not much cheaper due to the fixed number of licenses. I can only imagine the outrage of other cab drivers losing work to cheaper services (i.e. UberCab) because they are not paying licensing fees. 3. UberCab can easily recover albeit at lower margins. They need aggressive biz dev to quickly secure licenses. I hope they can continue to disrupt city transportation.
enki 16y ago
i've given up on trying to get a cab in sf. there's only 1381 highly regulated taxi medallions and a constant shortage. most potential customers have, just like me, given up on ever getting a cab when they need one, so there's not only artificially decreased supply, but also artificially decreased demand. there's been extensive comparative research into taxi regulation for decades. the reason SF is so much worse even than other cities that restrict the amount of cabs, is that SF doesn't only regulate street pick-up but also dispatch. google scholar is full of papers on taxi regulation research, and there's http://www.schallerconsult.com/taxi/ http://www.schallerconsult.com/taxi/ and other pages. unsurprisingly deregulation is in the interest of the drivers because a competitive market increases customer demand. would you sometimes pay double the fare if you could get a cab _right now_, instead of waiting 25 minutes and praying? hell yeah, if only they let you! let's hope uber can make on-demand transportation in SF usable again.
- seldo 16y ago
  This is funny, because having lived in London it's SO much easier to catch cabs here, I assumed SF was pretty good about taxi regulation. You have not experienced unavailable taxis until you have lived in London, where outside of the city center they literally do not operate.
  - enki 16y ago
    in vienna, which usually is the worst regulation hell, i could get a cab anywhere in the city within 4 minutes, any hour of any day. and that's a city with 1.75 times the population of SF (not including all the people who commute to SF to work there. this has been extensively studied. taxi service quality is essentially dependent only on regulation quality (with some delay as customers get used to the fact that they can actually get a cab)
rubinelli 16y ago
Am I the only one who finds it naive to name a startup UberCAB and then act as if it had nothing to do with taxi dispatching services? It's as if the PayPal founders decided to call it "UberBank."
- jambo 16y ago
  It might not be seen this way in general, which goes to the PR problem another poster mentioned, but my perception is that when someone markets something as über-, they mean it transcends or supersedes what they're prefixing. So not "cabs" but "better than cabs".
makmanalp 16y ago
>> Ubercab operates much like a cab company but does not have a taxi license. ^ Why is the taxi license process so difficult to go through? Why does it take 10 years or so? >> Limos in U.S. cities usually have to prebook an hour in advance, by law, while only licensed taxis can pick someone up right away but Ubercab picks people up right away (again without a taxi license). ^What is this but protecting special interests? Viva creative destruction.
risotto 16y ago
Who actually uses UberCab? Taxi Magic is a fantastic app that's totally legit. Open the app, use your location to book a cab and within 5 minutes it's there. It's Luxor Cabs who are fully licensed and use computerized dispatch. I tried UberCab once and it was a nicer car but the experience was no better than Taxi Magic, and significantly more expensive to get around town. I hate non-metered cabs. Taxis are one place where regulation is good. We all know what it's like to deal with a shady taxi driver. The tendency is to gouge vulnerable travelers, not to set lower prices. The consistency that regulation offers is the most important. I also can't believe the complaints about the taxis in SF. The cab companies are downright excellent when you actually call, and plentiful on the streets.
- daveman692 16y ago
  I used to be a huge fan of Taxi Magic but the past few months have found it less and less reliable. Basically if the cab is over .2 miles away it will pick up a fare on the street instead. When UberCab tells me that a car is coming, I can trust that it will actually come.
rdl 16y ago
I think UberCab will end up needing to change their name (UberCar?) to distance themselves from the "cab" or "taxi" connotation, and position themselves as an alternative to cabs, vs. a kind of cab, more forcefully. Other than that, I think they now have the moral justification to trash the taxi industry and cartel in their marketing. This can probably end up being a net win for them.

104 points by tswicegood 16y ago

I'm putting money on UberCab becoming a members-only service/co-op type system where you have to be a member in order to request a car. I'm not intimately familiar with the taxi laws, but I bet they don't specify what private organizations can do.

llimllib 16y ago
> I'm not intimately familiar with the taxi laws, but I bet they don't specify what private organizations can do. Huh? They have to. They don't let private limo organizations pick you up without a 1-hour reservation, for example, as stated in the article. Furthermore, Ubercab already is a private organization. I'm sure I'm missing something, can you explain why it would somehow become legal if it was a members-only organization?
- defen 16y ago
  I can open a private, members only club which serves alcohol past the traditional last-call time. In the same way, Ubercab could charge a membership fee, and then only people who are members can be picked up by Ubercab. (I'm not a lawyer so I don't know if this is actually possible, I'm just trying to rephrase tswicegood's argument.)
  - goatforce5 16y ago
    Yes, in the same way it becomes totally legal to sell cocaine as long as you only sell to members of your private club. (Note: IANAL.)
    - defen 16y ago
      It's almost never legal to possess cocaine in the U.S. - it's a schedule II drug. Alcohol is not a controlled substance. AFAIK, I (as a private citizen - not a business) am allowed to serve alcohol to anyone I choose, as long as they are over 21 years of age.
    - stcredzero 16y ago
      Catching a ride in a car is not a schedule 2 drug, fortunately.
- gravesryan 16y ago
  The regulations read that a livery services ride must be "pre-arranged". We've not seen the hour prior requirement in any law. If it does exist please send it our way, (info@ubercab.com) but we believe that this is opinion not fact.
  - llimllib 16y ago
    I was going off the article, I have no idea. Anyway, I hope it's clear that I wish you the best of luck fighting this nonsense.
  - anigbrowl 16y ago
    I think you should post the C&D order, actually, so as to put the focus on the MTA rather than wasting your time fending off uninformed speculation. It looks to me as if the $5,000/day fine they're speaking of refers to a modification of the Transportation code creating (among other things) a new offense of 'running a dispatch service without a permit,' which was passed by the SFMTA baord just last Tuesday - although it's still questionable whether or not it would apply to your firm. Regardless, it has not yet been made law by the Board of Supervisors, nor is it on their legislative agenda for next week's meeting. From what I can see, it can takes months for something to work its way up the Supervisors' calendar. Of course, a lot depends on what sort of lobbying power the Taxi establishment has at City Hall, but it's fair to assume they have years of experience in working the system. http://www.sfmta.com/cms/cmta/documents/10-19-10calendaritemsredline.pdf http://www.sfmta.com/cms/cmta/documents/10-19-10calendaritem... IANAL, mind; just my personal views. I've developed an unhealthy interest in the (dys)function of my local government.
- sp4rki 16y ago
  It's my understanding that the hour reservation specifics are basically FUD. Since when can you not call a limo service and say "I need a limo for right NOW! Do you have any?", because I'm pretty sure you can and they will send a limo your way if possible.

joshstrike 16y ago

I actually had this idea when I had dropped out of web design and became a taxi driver for a few years in 2001. It's a natural. However: "Taxi dispatchers make money on tips..." is an incorrect statement. Taxi dispatchers make money on BRIBES. Drivers do not tip out dispatchers. Nor do drivers' tips go to the company. What dispatchers euphemistically refer to as "tips" are actually bribes paid to them by some cab drivers to refer the best fares to those drivers - usually at the expense of the passenger, who has to wait outside longer for their cab because a closer driver was not dispatched. The exact reason why UberCab or similar services ARE such a good idea is that they can improve the customer experience by cutting out dispatcher corruption.

whakojacko 16y ago

"Taxi dispatchers make money on tips. Ubercab threatens dispatchers’ way of earning a living. Limos have to prebook an hour in advance, only licensed taxis can pick someone up right away by San Francisco law, yet Ubercab picks people up right away, yet doesn’t have a taxi license." Not like you can get a taxi in under an hour in SF anyways ;) Seriously, this just validates their model and I hope they can figure this out.

corin_ 16y ago

Maybe I'm just misinformed but... basically they're running a taxi service without a license to do that, then acting surprised when the city calls them on it? There's a taxi company I use whenever I'm in London called Addison Lee, and they've done the same as UberCab - using nice technology to know where you are, where the nearest available cars are, how long it will take for a car to get to you... In actual fact, at least based on http://www.ubercab.com/learn http://www.ubercab.com/learn, AdLee is better: it has all the benefits of UberCab, plus they tell you the price of the journey before you book the car (it won't become more expensive if you get stuck in traffic, or if the driver takes a longer route), which always works out cheaper than a black cab, in my experience. Oh, and in adition to letting you pay with the credit card on your account, you can chose to pay by cash if you so wish. Anyway, my point? Seems that Addison Lee have been (albeit in a different city/country) doing what UberCab is doing, slightly better, and for quite a bit longer: and they actually bothered to pay to be a licensed taxi provider, meaning that the London officials don't have a problem with them.

josefresco 16y ago
Maybe taxi license requirements are vastly different between the two countries making it prohibitively expensive or unrealistic to do the same in the US?
- corin_ 16y ago
  I couldn't comment on the costs involved in either country, but that really isn't relevant. If you can't balance a company's finances without saying "we won't follow the law because it's too expensive" then you're doing something wrong. That argument sounds semi-reasonable when coming from a teenager downloading films illegaly, not from a serious company avoiding paying for a license it needs.
  - deleted 16y ago
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  - uvdiv 16y ago
    >If you can't balance a company's finances without saying "we won't follow the law because it's too expensive" then you're doing something wrong. No, it's the law that is wrong. It is corrupt, it is repressive, it is evil. First of all, you can't just "pay for a license" to operate a taxi in S.F., because competition is illegal. The industry is a closed, city-enforced cartel, and the taxi "licenses" -- "medallions" -- first of all, have a mandatory cap of 1,400 taxis, secondly, are "allocated to individual drivers on the basis of seniority on a waiting list": http://www.sfbg.com/politics/2010/02/24/feb-26-cab-industry-changes-radically http://www.sfbg.com/politics/2010/02/24/feb-26-cab-industry-... Your standard labor cartel. Even better. They are piloting a program to "liberalize" the "licensing" (that SFBG news story), which mean under certain conditions you can actually "pay for a license" -- at a cost of $250,000 apiece. Although, naturally, the government quotas are still in effect, and you have to be a S.F. taxi union member to begin with, and who gets to buy the licenses is in order of seniority, etc., etc.: >Under the pilot program, only certain medallions can be sold: those held by individuals 70 years old or older or who are permanently disabled and cannot fulfill the driving requirement. While no medallion holder is required to sell, only those who elect to participate in the pilot program have the option to sell at this time. The other set of medallions being sold are those in the possession of the SFMTA due to the death of a medallion holder or through revocation proceedings. The price for a medallion is $250,000. >The medallion buyers are subject to the same rules as other current medallion holders, such as the full-time driving requirement and driving a San Francisco taxi for at least four of the past five years. Under the pilot program, available medallions are offered to qualified buyers in the order of seniority on the waiting list and after that in order of the driver A-Card permit seniority. The decision to buy is voluntary, but interested buyers had to notify the SFMTA of their interest in participating in the pilot. http://www.sfmta.com/cms/apress/SFMTAAnnouncesFirstTaxiMedallionSale.htm http://www.sfmta.com/cms/apress/SFMTAAnnouncesFirstTaxiMedal... More about S.F. taxi licenses, from the cartel's own webpage: http://www.medallionholders.com/medallions.html http://www.medallionholders.com/medallions.html Many other union-infected city governments do the same thing. NYC stands out: its taxi "licenses" now cost $825,000 each: http://www.businessweek.com/news/2010-08-06/nyc-taxi-medallions-wheel-in-profits-rivaling-s-p-500.html http://www.businessweek.com/news/2010-08-06/nyc-taxi-medalli... Disclaimer: IANAL, all I know is what I read in news articles.

sriramk 16y ago

I think there is a pattern across both UberCan and AirBnb where both are facing opposition from existing, regulated industries (taxi services and hotels respectively). Among all the posturing essentially meant to protect their existing businesses, I do think they have one valid point - that they both skirt around laws and regs in place. Though a lot of these laws and regulations are outdated/driven by special interests, some of them are in place for a reason. For example, not having hotels in residential areas so that neighbors aren't disturbed. Or having safety training for drivers of cabs. I do worry about the risk that UberCab/AirBnb could cause to its users (or others indirectly impacted). In both cases, the existing industries aren't doing themselves any favors. The argument around existing dispatchers maybe not making a living anymore - if someone else provides a better service than I do, it isn't their fault if I can't make money anymore. Reading the comments on the cab drivers' blog [1] is a bit sad. One of the commenters recognizes how good Ubercab is but uses that as an argument on why they should be shut down, instead of going "Hey, what if we started doing some of the things they do and improve?" http://phantomcabdriverphites.blogspot.com/2010/09/tac-iii-part-2.html http://phantomcabdriverphites.blogspot.com/2010/09/tac-iii-p...

pavel_lishin 16y ago
The best argument I've heard against AirBNB is that some people are buying up property and basically setting up hovels that they're renting out. Unsafe, unclean, miserable places to live. But hell, I've stayed in shitty motels where the only thing keeping the carpets glued to the floor was the roach shit.
- callmeed 16y ago
  I think review systems will weed out the crappy, unclean places. The best argument I've heard is the liability issue. Americans are sue-happy. One slip in the shower or bad car accident and then what? Are AirBnB and UberCab totally immune from litigation?
  - smackfu 16y ago
    Yeah, just need one sap to suffer through a bad night and write that bad review. Hope it isn't you.

jrockway 16y ago

This seems like the perfect business to run from outside of the US. To run a traditional taxi company, you need to have a presence in the area where the taxicabs are. To run a website that connects two people together, you can be anywhere. And you are outside of the legal reach of the City of San Francisco. Sure, the users will be violating some city regulation, but that, like file sharing, is unprofitable to follow up on. (AirBnB is in a similar situation. No need to give the irritated local governments a legal target.)

corin_ 16y ago
Unless they relocate all drivers to live outside the US they're going to have a slight problem, I think...
- jrockway 16y ago
  The drivers are already licensed. They can drive wherever they want to, and pick up whomever they want to. The specific legal problem that the article mentions is that operating the dispatching company is illegal.
  - corin_ 16y ago
    Presumably these two issues would still exist: - Its cars don’t have insurance equivalent to taxis’ insurance. - Limos in U.S. cities usually have to prebook an hour in advance, by law
    - uvdiv 16y ago
      The overriding issue is that there is a taxi cartel and the city enforces its quotas: http://www.medallionholders.com/medallions.html http://www.medallionholders.com/medallions.html You can't just pay for insurance and be legal. You're not allowed to compete, period.
    - jrockway 16y ago
      OK, fine, I guess. I propose the following revised business model for UberCab: Close up shop, return the money to the investors, and go on welfare instead. Nobody ever got rich without facing problems. UberCab can either fight the system, or they can do something else. For a site that caters to people interested in startups, there sure are a lot of defeatist comments here...

zachware 16y ago

The conflict was inevitable but as we often see in business, old players use regulation, unions and back room deals to protect their markets. Look at the RIAA, TV and movie industries. The technology is available to bring content to any device, anytime but they use regulation to stop it. It's bullshit. SF taxis are inefficient and difficult to use. Ubercab solves a problem and calls out just how ridiculous the SF Taxi system is. Instead of fighting to make their business more relevant, the taxi unions fight with regulation. I use Ubercab a lot. Why? * Because a car comes to me in a few minutes. * I don't have to stand in the rain and wonder if the illuminated taxi light means the taxi will stop or not. * I don't have to wonder if the cab takes cards or if the driver will simply refuse to take them even if his company does. * Most importantly, I don't have to hold on for dear life wondering if I'm going to die before i get where I'm going. Let's all stand up and say screw you unions. Ubercab is an innovator. SF taxis, be more efficient and you'll win. Otherwise, get out of the way.

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tlrobinson 16y ago

This sounds familiar: "Ubercab threatens dispatchers’ way of earning a living" Oh, yeah: "[TECHNOLOGY] threatens [PROFESSION]s' way of earning a living" Not a valid argument.

eli 16y ago
Yeah, but neither is ignoring the law because you disagree with it.
- AngryParsley 16y ago
  I think "ignoring the law because you disagree with it" is called civil disobedience. Although the term usually means individuals breaking laws for moral reasons, not companies doing it for efficiency and profit. Edit: I just wanted to point out that it is sometimes valid to ignore a law because you disagree with it. I'm not saying Ubercab is in the right.
  - eli 16y ago
    And they people who do it usually plan to be arrested. Not sure that makes for a great business plan, but I'd be happy to be proven wrong.
  - gloob 16y ago
    Perhaps I'm just old-fashioned, but the argument "Companies have the right to ignore the law if doing so increases profits" seems rather...unconventional.
    - AngryParsley 16y ago
      That is twisting my words beyond even the most uncharitable reading.
      - gloob 16y ago
        The charitable reading of your words, if I didn't misunderstand, is "many people think that people are sometimes justified in ignoring the law, depending on the situation." That's more or less a truism. Edit: Upvoted you back to 1.

forensic 16y ago

ubercab could relocate their business to russia. SF customers and drivers could still pay for the app. let's see them regulate that I want to make a taxi dispatcher that is outsourced to an Indian call centre. These dispatchers don't realize how deeply obsolete they are.

ceejayoz 16y ago
> let's see them regulate that Regulating the dispatchers would be difficult, but they could easily go after the owner/operators of the cars involved in actually transporting folks.
- forensic 16y ago
  What if they decentralize it even more? I'm imagining regular drivers (like me) being txt'd when there is a nearby person who wants a ride. Like hitchhiking but using GPS and money. The hitchhiker would specify his destination and how much he is willing to pay. The software would know my location as well as destination (optional) and notify me when I'm near him. Make everyone into a taxi driver. For added value you could also give individuals special badges and such that certify their driving credentials, and let the buyers decide how much their driving credentials are worth. Credentials could be on a graded scale: - Confirmed driver's license - Confirmed professional driving certification Naturally you'd have a reputation system where passengers can rate the quality of the drivers, and drivers could respond to the criticisms. Decentralized taxi service. The biggest hurdle is reaching critical mass of users, which UberCab has achieved. I want to see them destroy the conventional taxi industry (disruptive technology makes me tingle)
  - evgen 16y ago
    Imagine you get a text from a person who wants a ride. You pick them up, arrange a fee, deliver them to the destination, accept the money, and then get arrested for being an unlicensed cab operator. How many arrests would it take before your services is a dim memory? How long would it take if the law was modified slightly so that the car used in the "criminal enterprise" was impounded as evidence until the case was dealt with by the court? The risk is entirely upon the driver, who, by the way the service is structured, must risk a large chunk of capital (their car) just to participate.

callmeed 16y ago

So is ubercab connecting people with "car services" that aren't licensed taxi companies? Are these the drivers you see often in NYC when arriving at the airport? My understanding is that there are risks to using such services (like if you leave something in the vehicle you're unlikely to recover it whereas a taxi co. can usually track it down). True?

jon_dahl 16y ago
I think it's four or five steps up from the rogue drivers at NYC airports. The drivers are licensed limo drivers, and everything is official/on-the-books.

johnglasgow 16y ago

Three points: 1. Sounds like UberCab should look into licensing out their platform to existing cab companies. It would mean lower margins, but they can quickly scale throughout the US and beyond much faster. 2. UberCab's blog post is arrogant. Did they really think they can avoid paying expensive licensing fees because they are using black cars instead of yellow cabs? Taxi licenses are very expensive and a lucrative revenue source for every major city. A taxi seat can cost as much as 1 million to purchase in NYC, and I know other cities such as SF and LV are not much cheaper due to the fixed number of licenses. I can only imagine the outrage of other cab drivers losing work to cheaper services (i.e. UberCab) because they are not paying licensing fees. 3. UberCab can easily recover albeit at lower margins. They need aggressive biz dev to quickly secure licenses. I hope they can continue to disrupt city transportation.

enki 16y ago

i've given up on trying to get a cab in sf. there's only 1381 highly regulated taxi medallions and a constant shortage. most potential customers have, just like me, given up on ever getting a cab when they need one, so there's not only artificially decreased supply, but also artificially decreased demand. there's been extensive comparative research into taxi regulation for decades. the reason SF is so much worse even than other cities that restrict the amount of cabs, is that SF doesn't only regulate street pick-up but also dispatch. google scholar is full of papers on taxi regulation research, and there's http://www.schallerconsult.com/taxi/ http://www.schallerconsult.com/taxi/ and other pages. unsurprisingly deregulation is in the interest of the drivers because a competitive market increases customer demand. would you sometimes pay double the fare if you could get a cab _right now_, instead of waiting 25 minutes and praying? hell yeah, if only they let you! let's hope uber can make on-demand transportation in SF usable again.

seldo 16y ago
This is funny, because having lived in London it's SO much easier to catch cabs here, I assumed SF was pretty good about taxi regulation. You have not experienced unavailable taxis until you have lived in London, where outside of the city center they literally do not operate.
- enki 16y ago
  in vienna, which usually is the worst regulation hell, i could get a cab anywhere in the city within 4 minutes, any hour of any day. and that's a city with 1.75 times the population of SF (not including all the people who commute to SF to work there. this has been extensively studied. taxi service quality is essentially dependent only on regulation quality (with some delay as customers get used to the fact that they can actually get a cab)

rubinelli 16y ago

Am I the only one who finds it naive to name a startup UberCAB and then act as if it had nothing to do with taxi dispatching services? It's as if the PayPal founders decided to call it "UberBank."

jambo 16y ago
It might not be seen this way in general, which goes to the PR problem another poster mentioned, but my perception is that when someone markets something as über-, they mean it transcends or supersedes what they're prefixing. So not "cabs" but "better than cabs".

makmanalp 16y ago

>> Ubercab operates much like a cab company but does not have a taxi license. ^ Why is the taxi license process so difficult to go through? Why does it take 10 years or so? >> Limos in U.S. cities usually have to prebook an hour in advance, by law, while only licensed taxis can pick someone up right away but Ubercab picks people up right away (again without a taxi license). ^What is this but protecting special interests? Viva creative destruction.

risotto 16y ago

Who actually uses UberCab? Taxi Magic is a fantastic app that's totally legit. Open the app, use your location to book a cab and within 5 minutes it's there. It's Luxor Cabs who are fully licensed and use computerized dispatch. I tried UberCab once and it was a nicer car but the experience was no better than Taxi Magic, and significantly more expensive to get around town. I hate non-metered cabs. Taxis are one place where regulation is good. We all know what it's like to deal with a shady taxi driver. The tendency is to gouge vulnerable travelers, not to set lower prices. The consistency that regulation offers is the most important. I also can't believe the complaints about the taxis in SF. The cab companies are downright excellent when you actually call, and plentiful on the streets.

daveman692 16y ago
I used to be a huge fan of Taxi Magic but the past few months have found it less and less reliable. Basically if the cab is over .2 miles away it will pick up a fare on the street instead. When UberCab tells me that a car is coming, I can trust that it will actually come.

rdl 16y ago

I think UberCab will end up needing to change their name (UberCar?) to distance themselves from the "cab" or "taxi" connotation, and position themselves as an alternative to cabs, vs. a kind of cab, more forcefully. Other than that, I think they now have the moral justification to trash the taxi industry and cartel in their marketing. This can probably end up being a net win for them.