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> if taxis were great then Uber wouldn't get any traction. Uber has a few luxuries that taxis are not afforded (due to regulation), including significant surge

by sheetjs 12y ago

> if taxis were great then Uber wouldn't get any traction. Uber has a few luxuries that taxis are not afforded (due to regulation), including significant surge pricing and the general ability to turn down fares. To compare, Uber is allowed to charge 3x the normal price during peak hours, whereas NYC cabs have a fixed 50 cent surcharge at night and $1 during evening commuting hours. Personal anecdote: requested an Uber at the ferry terminal on the embarcadero 20 minutes before a surge. Driver was a block away and suddenly canceled, forcing me to request again. The second request occurred during a surge, so I had to pay 2.5x for that trip! Fortunately Uber refunded me but that type of stunt is what the laws exist to prevent. As I understand UberX, since the drivers are not required to take on commercial insurance, their insurance costs are also significantly limited. The biggest botheration, though, is the fact that the insurance policies technically don't allow driving for hire. It seems we all want a situation with the regulations, guarantees and protections that are currently provided by the laws AND the convenience and benefits of Uber. Unfortunately they are mutually exclusive. If we allowed taxis to charge more for fares and to skirt the other regulations that they are currently bound to, I'd expect that the taxi landscape would improve immensely

nugget 12y ago
Have you talked to many UberX drivers? More than the money, most have told me that they love the flexibility to clock in and clock out as needed. When you lease a cab, you pay a flat fee per week to the medallion owner and then work every minute to turn a profit. As a result of this, any down time comes out of your own pocket. I spoke with a driver last week who hadn't been on vacation in 4 years because he was afraid that one missed week would take him out of the driver lineup. He would have had to pay to rent the cab even the week he was out, in order to keep his spot. It reminded me of stories from sharecroppers in the south who lived and worked with a low but constant level of fear, pressure and anxiety. The problem isn't with insurance or vehicle standards, all of which will be addressed in time. Uber fixed a fundamental structural problem with an antiquated system that favors medallion owners at the expense of both drivers and riders.
- 67726e 12y ago
  Related to the article, Charleston does not operate on a medallion system nor the rest of the state if my last UberX driver is to be believed.
tomblomfield 12y ago
I object much more to this phenomenon (drivers cancelling booked rides when surge pricing escalates) than the idea of surge pricing itself. I had 3 Uber drivers cancel on me in a row as a rain storm in New York got rapidly worse over the course of about 20 minutes. Each time I rebooked, the surge multiple had increased. I complained to Uber and they basically shrugged it off.
x1798DE 12y ago
>It seems we all want a situation with the regulations, guarantees and protections that are currently provided by the laws AND the convenience and benefits of Uber. Unfortunately they are mutually exclusive. If we allowed taxis to charge more for fares and to skirt the other regulations that they are currently bound to, I'd expect that the taxi landscape would improve immensely Personally, I don't want that, but that's just me. However, I don't see how they are mutually exclusive. If you want to take a ride from a regulated, "safe" taxi, then you still have the option if Uber is around. The only problem is that people don't care about regulation that much, which is why taxis are hurting from the advent of Uber. Why did you request a second uber during the price surge (if you didn't realize that Uber was going to pay you back)? Why not just call a taxi?
- kevingadd 12y ago
  > If you want to take a ride from a regulated, "safe" taxi, then you still have the option if Uber is around. Until Uber muscles out taxis in certain localities, which will happen if they continue to offer (on average) lower prices and (on average) better service, thanks in part to not having to comply with regulations or obey the law. This isn't a hypothetical scenario either; this is the business model for this kidn of VC-backed growth startup: Grow your market, hopefully without losing too much money, and then eventually transition into charging reasonable prices and monetizing the shit out of your large audience. If they can muscle most of their competitors out of the market in the process, they'll have an easier time retaining their customer base and be able to charge higher prices. There are lots of other companies applying the same strategy, some even in the same market.
- pfranz 12y ago
  "The only problem is that people don't care about regulation that much" The whole point of regulation is to make up for things the market doesn't handle very well. Sadly, the realities don't always live up to that ideal. I do care that my driver is insured properly (I'm paranoid like that), but in my experience generally taxi service has been terrible. Paying via credit card, summoning via gps, and live eta for taxi arrival all address the biggest frustrations I've had with taxi service. I just want to make sure they have the same level of vetting, training, safety equipment, and insurance that everyone has already decided for that kind of service.
DenisM 12y ago
>It seems we all want a situation with the regulations, guarantees and protections that are currently provided by the laws AND the convenience Nope, we don't all want it. Surge pricing is fine by me, if rather get an expensive ride that actually happens, than a cheap ride I can't have. What happened to you was obvious abuse of surge pricing and I think Uber can deal with by adding gradual ramp up for prices and punishing cancellations. The insurance inadequacy obviously has to be dealt with.
zo1 12y ago
"Uber has a few luxuries that taxis are not afforded (due to regulation), including significant surge pricing and the general ability to turn down fares. To compare, Uber is allowed to charge 3x the normal price during peak hours, whereas NYC cabs have a fixed 50 cent surcharge at night and $1 during evening commuting hours." Do you know what that is called in economics? Here you go: http://en.wikipedia.org/wiki/Price_ceiling http://en.wikipedia.org/wiki/Price_ceiling It's a specific type of price-control, and it's the reason you have a shortage of taxis during peak-hours. The fact that pricing can "surge" in Uber during peak hours is a feature! It links in to what the other poster told you, that some Uber drivers like the flexibility of being able to clock in/out whenever they please. Increasing the price at peak hours means that there is more incentive for them to clock in, and thus eliminate the shortage. Sure, there will be abuse, like you mentioned. But that's trivial to solve without having to resort to out-right banning Uber, as per one of the other responder to your comment.
- sheetjs 12y ago
  You actually missed the more relevant term here: Regulatory Arbitrage. Uber is not constrained by the same type of regulations that encumber taxi cabs (including but not limited to the price ceiling you mentioned). The price ceiling is only one part of the story

by sheetjs 12y ago

nugget 12y ago

Have you talked to many UberX drivers? More than the money, most have told me that they love the flexibility to clock in and clock out as needed. When you lease a cab, you pay a flat fee per week to the medallion owner and then work every minute to turn a profit. As a result of this, any down time comes out of your own pocket. I spoke with a driver last week who hadn't been on vacation in 4 years because he was afraid that one missed week would take him out of the driver lineup. He would have had to pay to rent the cab even the week he was out, in order to keep his spot. It reminded me of stories from sharecroppers in the south who lived and worked with a low but constant level of fear, pressure and anxiety. The problem isn't with insurance or vehicle standards, all of which will be addressed in time. Uber fixed a fundamental structural problem with an antiquated system that favors medallion owners at the expense of both drivers and riders.

67726e 12y ago
Related to the article, Charleston does not operate on a medallion system nor the rest of the state if my last UberX driver is to be believed.

tomblomfield 12y ago

I object much more to this phenomenon (drivers cancelling booked rides when surge pricing escalates) than the idea of surge pricing itself. I had 3 Uber drivers cancel on me in a row as a rain storm in New York got rapidly worse over the course of about 20 minutes. Each time I rebooked, the surge multiple had increased. I complained to Uber and they basically shrugged it off.

x1798DE 12y ago

>It seems we all want a situation with the regulations, guarantees and protections that are currently provided by the laws AND the convenience and benefits of Uber. Unfortunately they are mutually exclusive. If we allowed taxis to charge more for fares and to skirt the other regulations that they are currently bound to, I'd expect that the taxi landscape would improve immensely Personally, I don't want that, but that's just me. However, I don't see how they are mutually exclusive. If you want to take a ride from a regulated, "safe" taxi, then you still have the option if Uber is around. The only problem is that people don't care about regulation that much, which is why taxis are hurting from the advent of Uber. Why did you request a second uber during the price surge (if you didn't realize that Uber was going to pay you back)? Why not just call a taxi?

kevingadd 12y ago
> If you want to take a ride from a regulated, "safe" taxi, then you still have the option if Uber is around. Until Uber muscles out taxis in certain localities, which will happen if they continue to offer (on average) lower prices and (on average) better service, thanks in part to not having to comply with regulations or obey the law. This isn't a hypothetical scenario either; this is the business model for this kidn of VC-backed growth startup: Grow your market, hopefully without losing too much money, and then eventually transition into charging reasonable prices and monetizing the shit out of your large audience. If they can muscle most of their competitors out of the market in the process, they'll have an easier time retaining their customer base and be able to charge higher prices. There are lots of other companies applying the same strategy, some even in the same market.
pfranz 12y ago
"The only problem is that people don't care about regulation that much" The whole point of regulation is to make up for things the market doesn't handle very well. Sadly, the realities don't always live up to that ideal. I do care that my driver is insured properly (I'm paranoid like that), but in my experience generally taxi service has been terrible. Paying via credit card, summoning via gps, and live eta for taxi arrival all address the biggest frustrations I've had with taxi service. I just want to make sure they have the same level of vetting, training, safety equipment, and insurance that everyone has already decided for that kind of service.

DenisM 12y ago

>It seems we all want a situation with the regulations, guarantees and protections that are currently provided by the laws AND the convenience Nope, we don't all want it. Surge pricing is fine by me, if rather get an expensive ride that actually happens, than a cheap ride I can't have. What happened to you was obvious abuse of surge pricing and I think Uber can deal with by adding gradual ramp up for prices and punishing cancellations. The insurance inadequacy obviously has to be dealt with.

zo1 12y ago

"Uber has a few luxuries that taxis are not afforded (due to regulation), including significant surge pricing and the general ability to turn down fares. To compare, Uber is allowed to charge 3x the normal price during peak hours, whereas NYC cabs have a fixed 50 cent surcharge at night and $1 during evening commuting hours." Do you know what that is called in economics? Here you go: http://en.wikipedia.org/wiki/Price_ceiling http://en.wikipedia.org/wiki/Price_ceiling It's a specific type of price-control, and it's the reason you have a shortage of taxis during peak-hours. The fact that pricing can "surge" in Uber during peak hours is a feature! It links in to what the other poster told you, that some Uber drivers like the flexibility of being able to clock in/out whenever they please. Increasing the price at peak hours means that there is more incentive for them to clock in, and thus eliminate the shortage. Sure, there will be abuse, like you mentioned. But that's trivial to solve without having to resort to out-right banning Uber, as per one of the other responder to your comment.

sheetjs 12y ago
You actually missed the more relevant term here: Regulatory Arbitrage. Uber is not constrained by the same type of regulations that encumber taxi cabs (including but not limited to the price ceiling you mentioned). The price ceiling is only one part of the story