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How Uber Takes Over a City
- hackuser 11y agoTheir 'investment' in political influence is amazing: It has 250 lobbyists and 29 lobbying firms registered in capitols around the nation, at least a third more than Wal-Mart Stores. That doesn’t count municipal lobbyists. In Portland, the 28th-largest city in the U.S., 10 people would ultimately register to lobby on Uber’s behalf. They’d become a constant force in City Hall. City officials say they’d never seen anything on this scale. I suspected politicians were responding to something besides the appeal of easy-to-get rides. What I've seen from local politicians was hard to explain otherwise.
- onewaystreet 11y agoUber has been treated roughly by local politicians pretty much everywhere in the world it has set up. It's only by fighting the taxi lobbies with fire that they have been able to make any inroads at all.
- hoopd 11y agoUber accounts for nearly half of the entire U.S. market of low-cost personal rides. They are not the little guy fighting the power, they are the power.
- dajohnson89 11y agoAnd their success is, by and large, a testament to how poorly the previous power (the taxi guilds) served the people.
- emodendroket 11y agoIt's easy to cut prices if you just exempt yourself from the labor laws everyone else has to follow.
- fwn 11y agoNot only themselves but drivers and customers too. Uber, their drivers and their customers benefit from not being covered by those labor laws you're talking about. It's bad for politics and the traditional taxi industry because they get less from the cake.
- icebraining 11y agoTaxi drivers were already exempt from most of those labour laws - they were already considered contractors and didn't have overtime nor benefits.
- hoopd 11y agoBut they were actually contractors.
- onewaystreet 11y agoThat didn't just happen overnight. Do a google search for "uber banned". They fought for it and still are.
- dylanjermiah 11y agoThey weren't always a $50bn company. They got a cease and desist from SF in 2010. When it was just a black car service.
- emodendroket 11y agoIt's also amazing how many (presumably unpaid) cheerleaders they have to flood the comments of every discussion about them.
- sremani 11y agoIt is easy to cheer for Uber because they are not running over puppies or snow bunnies, they are dismantling the medallion mafia, unworthy of legal protections. So Yes, I cheer for Uber and its Ayn Randian CEO.
- JonnieCache 11y ago>dismantling the medallion mafia Is that really a thing outside of NYC? Pretty sure it isn't.
- dylanjermiah 11y agoIt was a thing in almost every developed city around the world.
- rconti 11y agoLiterally medallions and literally the mafia? Not as far as I know. But most cities restrict supply of taxis to keep prices high and fix prices as the behest of the taxi industry -- in addition to all of the other fun things the taxi lobby does. When Seattle built the Link light rail system, it stopped 1 mile shy of the airport because the taxi drivers didn't want the competition. Fortunately public outcry shut that down, but it's pretty rare that the general public gets upset enough about an issue to overcome the power of a specific interest group (yes, this includes Uber as well!) There's plenty of literature to explain why price fixing and limiting supply/licensure is bad. There's no competition, no incentive to improve or provide a premium service. There's no reason to provide service in far-out areas where it might be hard to find a return fare. There's no reason to provide service in less "desirable" (read: minority) areas. Of course, there are problems with the Uber model, too: Surge pricing being one of them. Some people think it's gouging, some think it's the right solution to provide supply for excess demand.
- fwn 11y agoI seriously don't know: Is that somewhat out of proportion? I could imagine the aggregated Taxi lobby being represented somewhere close to that. It's after all a highly regulated market.
- onewaystreet 11y agoUber built this large lobbying effort because they were getting killed by the taxi lobbies: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/07/31/the-taxi-industry-is-crushing-uber-and-lyft-on-the-lobbying-front-3500-to-1/ http://www.washingtonpost.com/blogs/wonkblog/wp/2014/07/31/t...
- hackuser 11y agoI can't imagine the taxi lobby has $40 billion and former White House advisors. The article says that Portland city hall was blown away by scale of Uber's response.
- jmngomes 11y agoCorrect. This also goes for everyone asking "Why does AirBNB require such a large investment at this point?!" on a recent post...
- smackfu 11y agoOTOH, here in Connecticut they didn't have a lobbyist firm, and they almost got banned in the state (after already running for a few months), because the taxi companies were lobbying the politicians. So they hired a lobbyist, and got actual hearings on the subject. Which seems a bit more fair.
- aikah 11y agoNothing new here. Lobbying is just legalized corruption. Lobbying works if you put enough money in lobbying politicians and since Uber is mostly popular... There is no way around it, the taxi industry as we know it will vanished. But I don't really want Uber to be the 'new boss'...
- hackuser 11y agoIt could set a bad precendent for others: Those with enough money can ignore the law and buy the market.
- candu 11y agoI think that precedent has already been set.
- xacaxulu 11y agoYes, that precedent has been set since.....the beginning of time.
- emodendroket 11y agoWell, it's fun to be cynical and everything, but the FDA, EPA, and so on came into existence over the objections of the industries they regulate.
- angersock 11y agoAnd now they're some of the FDA's biggest employers!
- wahsd 11y agoWhat's most pathetic is that the peasants take up arms for Uber to crush any resistance. It drives me nuts. Sure, you love Uber, I love the service they provide too, but there are always consequences when you get in bed with the devil.
- BurningFrog 11y ago
- glup 11y agoPortland had just become the first city to explicitly allow short-term rentals through Airbnb and other sites, and welcoming Uber could help build the city’s sharing-economy brand, a logical extension of its communitarian roots. "Sharing economy" is by no means "an extension of communitarian roots". Communitarian is where the utility you derive is in part a function of the utility derived by others in your community. The "sharing" economy is where companies provide a service so you can buy or sell things (your house, car, time etc.) to others in your community. See the difference?
- mynameisvlad 11y agoSo how is that not a logical extension? They don't have to be identical to be logical extensions.
- wavefunction 11y agoFor something to be a logical extension, it has to derive from the other. That would mean that the community of Portland would need to benefit from AirBnB rentals as well as the renter and rentee, which seems difficult to prove given the recorded effect of AirBnB in other areas. The same with Uber - for the "sharing economy" to be a logical extension of communitarianism, the greater population of Portland needs to derive some utility from people providing and using Uber service.
- avn2109 11y agoI'm a huge skeptic of Uber's explotative labor practices and general shadiness, and I think "sharing economy" is doublespeak marketing BS. But credit where credit is due, the greater population of Portland might well realize some material benefits from Uber, via reduced drunk driving (or reduced drunk ironic fixed-gear cycling, as the case may be).
- angersock 11y agoIt's not a logical extension because most of these "sharing economy" companies are a) subverting the rules and sovereignty of the communities in which they operate, b) introducing parasitic drag in the deployment of capital in those places, and c) creating a disconnect between local owners and local consumers--in effect, you do business with Uber, not Francine the cabby. Orthogonal to all that, of course, is the generally scummy practice of reducing these folks to serfdom.
- rayiner 11y agoUber is a great example of why lobbying can be a good thing. Taxi regulations date back to the days of horse-drawn carriages. That does not by itself make them obsolete, but at the time taxi regulations took their modern form, cities (especially on the east coast) were more densely populated, cars were much more polluting, and there was little that would allow disseminating information about the quality of taxi service among consumers. In short: the externalities and information asymmetries that justified taxi regulation in the first place have declined substantially. Lobbyists are well-positioned to inform legislators about how the market is different today, and why the animating purposes of taxi regulations may no longer be applicable, or at least may not have the same force they used to.
- hoopd 11y agoSpoken like a lobbyist. Government administers regulations on behalf of the people. If they're failing to do so then the political process is broken. Lobbyists do not fix broken political processes. > Uber had been working on the council members for months. “They kinda run this,” Alpert said in February. “I keep feeling they will just wear you down. If we end up in court, we will have to lose just based on resources.” This doesn't sound like they're simply informing legislators of new information nor does it sound like the legislators had the resources or the time to do anything but roll over.
- fwn 11y ago> Government administers regulations on behalf of the people. Is that meant to be descriptive? Because I don't know where to start. "The people" isn't even an entity expect in a defunct branch of classical political philosophy. And I do think this isn't an ideological claim. I believe this could be stated by socialists, libertarians, democrats..
- rayiner 11y agoI'm not a lobbyist, though my wife used to be. She lobbied on behalf of a construction trade organization. 98% of her work involved telling legislators about the benefits of integrating design and build phases of construction (instead of hiring a separate architect and contractor and doing design and build in separate phases). Lobbying is a way of structuring administration of regulation that shifts responsibility from unelected bureaucrats to people. Do you think politicians should be sitting around reading papers about the reputation economy and thinking about where those ideas can be applied? It would be intractable and a huge waste of time considering the vast universe of concerns involved. And it's not like ordinary citizens are clamoring writing letters about how the reputation economy enabled by smart phones makes certain taxi regulations obsolete. It's far better for lobbyists to do the relevant work and tell politicians what they should fix and why.
- nugget 11y agoIt's interesting that Lyft seems to be able to hypermile behind Uber and benefit from the lobbying without having to spend any money. Google and others who eventually deploy self driving car fleets will benefit as well.
- kuschku 11y agoWhich still doesn’t solve the actual issue: affordable public transport. Especially in cities taxis are just inefficient. They use over 10 times as much space as a similar amount of busses, and produce a lot more emissions per passenger, too. Self driving car fleets for rent or taxis are good for rarely used routes, or for city - region transport, but inside a city taxis should be mostly replaced with proper subway and bus systems.
- nugget 11y agoHow low would a self driving 2 seater smart car have to drop in cost before you would view it as an acceptable replacement to public transportation in cities without strong existing subway routes? I think the costs will be surprisingly low, and the infrastructure (roads) already exists from door to door. No matter what, self driving cars will siphon off some percentage of riders from public transport options, increasing the need for ever more expensive subsidies.
- kuschku 11y agoWhy do roads exist from door to door? Especially in european cities with a historic core, this is just not the case - even in my city, it's common knowledge to NEVER take a car into the city, as the roads are just always fully congested. Public Transport is the only long term solution. Especially when one takes the cost for building roads into account. And if one considers that with public transport 100% of the fare goes back into the infrastructure, while with self-driving cars operated by for-profit businesses most of your fare ends up in the pockets of a rich investor overseas. Which is just not desireable.
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- wahsd 11y agoIt drives me nuts to see the manic crowds come to the defense of Goliath. Sure, taxi's suck ass in many cities and I really like the accountable based system of Uber and their high standards, but that is no justification for essentially handing over a whole market segment to a single monopolist. What an age we are living through, where all the valued and ideals of competition aren't even given lip service anymore and all of society goes all in on monopolies. Because what can go wrong when monopolies reach the phase where they turn all those lobbyists from market capture goals to regulatory capture goals to lock out any competition in an inherently low barrier to entry industry? Nothing can go wrong, right?
- atourgates 11y ago> handing over a whole market segment to a single monopolist. So long as the regulations aren't specific to Uber, what's to stop Lyft, Sidecar and others from competing in the same space? It seems like in this case, the monopoly is taxies, and the disruptor is still ridesharing services.
- dylanjermiah 11y agoThere will always be alternatives to Uber. Uber is at it's core transportation. It competes on price and quality in more arenas than 'ride sharing'. In regards to your monopoly point. There are very few, of any, natural monopolies. Ones which occur in a real free market.
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- smutticus 11y agoWhy does every article about Portland make it into some magical incredibly different place. Does water not run downhill in Portland, OR? I spend a fair amount of time in Portland and it's incredibly similar to most American cities. All this exceptionalist serves only to stroke egos and generate clicks.
- venomsnake 11y ago> But as Portland would learn, a city of 600,000 can play tough with a $40 billion company, particularly one that is used to getting its way, for only so long. Terrifying ...
- adventured 11y ago"City-level battles can be costly, too. Last year, Uber put more than $600,000 into a voter referendum in Seattle and spent $314,000 lobbying in Washington, D.C." That is not costly. Uber has raised $6 billion in capital, and is presently working on a $2 billion line of credit. Half a million dollars per major metro, would be trivial - but it won't be necessary, for every Portland, there are a dozen smaller cities that will just fall in line.
- melvinmt 11y agoWe will not have to wait long until Uber lobbies for "Uber medaillons", the equivalent of the (once) powerful taxi lobby shutting down other competitors.
- prostoalex 11y agoThey do raise the prices in the markets that are not competitive http://ridesharedashboard.com/2015/03/19/uber-for-the-first-time-increases-fares-in-nine-cities/ http://ridesharedashboard.com/2015/03/19/uber-for-the-first-...
- davidf18 11y agoThe reason why Uber and Airbnb are able to succeed, at least in NYC (and perhaps SF, ....) is the use of politics to create artificial scarcity ("rent seeking"). In NYC there is an artificial limit on Taxi Medallions so that a medallion until recently could cost $1 million. Housing and hotel costs are so high because of zoning laws that have unrealistic and artificial housing density restrictions, thus increasing the cost of land, thus increasing the cost of housing and office space. Harvard Economist Edward Glaeser (cited by Nobelist Paul Krugman and others) wrote this: (Build Big Bill) http://www.nydailynews.com/opinion/build-big-bill-article-1.1913739 http://www.nydailynews.com/opinion/build-big-bill-article-1.... Thus, Uber and Airbnb owe much of their success to addressing market inefficiencies, "rent seeking" introduced by bad laws which serve special interests at the cost to people who take taxis, rent and buy apartments, and rent office space.
- astaroth360 11y agoLol, I like the sharing economy as much as the next person, but it's a pretty ludicrous name for itself. There's not really any sharing to be found here, just buying and selling. Once the companies involved start being more reasonable with paying taxes and employees instead of trying to essentially skirt the law and be irresponsible corporate citizens, they'll be a great addition to our economy. As of right now, they just make a lot of money for a few people at the expense of the rest just like any other Mega-Corp would. I like to think the tech community tries to make the world better rather than just scrounge for cash, but maybe I'm too much of an idealist.