Uber Boston Has Been Served

http://blog.uber.com/2012/08/14/uber-boston-has-been-served/

by sudonim • 14 years ago

158 133 14 years ago

blog.uber.com

jfb• 14 years ago

Oh, the rent-seeking. What are taxi medallions for if not graft and log-rolling?

kungfooguru• 14 years ago

Traffic and pricing control...

kemiller• 14 years ago

That is true. But it was much more relevant in an age when the rider was more or less at the mercy of the driver who picked them up. The internet on your phone (not to mention the GPS) means you can much more easily tell if you're being cheated. And the fact that you contact Uber and then they send a car means that the sketchy kidnapper risk is mitigated.

tptacek9• 14 years ago

Two tickets were apparently issued:

(i) For operating an unlicensed livery service

(ii) For using a non-approved mechanism for metering the ride

The C&D at issue here covers (ii). At its heart, the complaint is that Boston has standardized on a way of metering passengers, and Uber has replaced that standard with GPS. Presumably, cab drivers in Boston could not simply choose to replace their meters with GPS monitors, and thus, says Cambridge, neither should Uber.

(I might be wrong, that's just my read of the complaint).

I'm torn. Uber is pretty neat. Some (maybe most) of cab regulation is rent seeking. But not all of it is. Municipalities should find a way to make Uber lawful, but I'm not sure Uber should be able to make that happen by fiat.

andygcook• 14 years ago

I think that pretty much sums it up correctly. The City of Boston placed a sting operation on one of the Uber drivers in the issuance of ticket (i), where once they saw the driver had used an unauthorized meter, they made him pull over where a police officer was already waiting.

It's unfortunate that Boston has issued a cease and desist on the service though. I live in Boston, and Uber is great as it's almost impossible to find a cab at 4:00 in the morning after you work late, not to mention the fact that waiting around for one in sketchy neighborhoods is dangerous.

tptacek9• 14 years ago

As always in situations like this, my thoughts are simultaneously on how awesome Uber is, and how not awesome every other service/scam that takes advantage of this flexibility might be.

It is very important that cities be able to provide visitors with a reliable way to get a ride from point A (usually: the airport) to point B (usually: the convention center hotel) at a predictable price.

Obviously, Uber doesn't prevent visitors from getting to the convention center directly; Uber isn't taking up spots at the cab stand at LGA. But if the "Uber way of doing business" effectively drives regulated cabs out of business, that's a problem.

emmett5• 14 years ago

They already knew he had an "unauthorized meter". The sting was wholly unnecessary to learn anything.

It was purely the legal justification to slap on the C&D; they needed evidence in the court-admissible sense. But the idea that they "noticed" anything in the process is silly. It was all scripted from minute 1.

neilk3• 14 years ago

I was amazed by this sentence in the C&D:

"Massachusetts law does not sanction unapproved devices for use in commercial transactions."

Does that mean what I think it means? If I use an iPhone app to calculate the tax, and it's not approved, then I broke the law? Does this apply to Square, too? I thought that there was an English common law principle that "Everything which is not forbidden is allowed".

tptacek9• 14 years ago

No, I don't think that's what they mean. They're referring to meters.

chrisdroukas• 14 years ago

It seems they're referring specifically to measurement systems, as in a taxi service. The preceding sentence in the ruling is:

"The major problem at this time is the fact that there are no established measurement standards for its current application and use in determining transportation costs similar to that of approved measurement systems for taximeters and odometers."

URSpider942• 14 years ago

Most states have weights and measures departments that certify all of the tools used in commerce (scales, gas pumps, taxi meters, etc). These tools are very highly regulated -- often the internals are inspected by state officials, the devices are sealed, and operators are required to bring them back in for periodic re-testing. This may seem obstructionist, but it's based on a long history of dishonest merchants tampering with this type of equipment to defraud customers.

dsr_• 14 years ago

"Everything which is not forbidden is allowed".

Sure. Massachusetts forbids you from operating a commercial service that charges based on the readings of measuring equipment that does not meet the standards of the Department of Weights and Measures. Taxi meters do. Standard car odometers don't. You can calculate with an abacus or an Apple, but your market fruit scale has a seal indicating that it was inspected and passed.

Your gasoline is measured by pumps similarly inspected. The pump at the dairy that fills gallon jugs is inspected. You can pay with barter, coins or large stones, as long as the negotiation is acceptable to both parties -- and when you pay for eight pounds of foie gras, you'd better be getting it weighed from an inspected scale.

untog3• 14 years ago

I'm torn too, but the meter thing is a very sensible point. Taxi meters in NYC (the only market I have experience with) are basically entirely locked boxes- the drivers can't do anything beyond poke the buttons on the front. This is, of course, very sensible- otherwise there's a danger of unscrupulous drivers modifying their meters to charge passengers more. This is only the case for yellow cabs in NYC, though- I'm surprised that Boston expands the principle to private car services.

A lot of government regulation is bad, but not all of it is. AirBnB and hotel regulation is another example of this.

chimeracoder• 14 years ago

It's not that surprising to regulate a private company like that. When you go to the grocery store or the gas station, the scale or pump has a green sticker on it saying that it was verified by the Department of Weights and Measures, along with a number to call if the device didn't start at zero.

That said, regulating a company is very different from issuing a cease-and-desist (which in fact does nothing but ensure that you cannot regulate them!)

creativename• 14 years ago

About taxi meters: from my experience, the mileage may be fixed, but it always seems that the cab driver is able to press something/manipulate the box somehow when they need to add additional fees (in Boston, specifically, in fact).

For instance, when I get picked up at many airports the cab driver adds some additional fee (usually between $3 and $8). For all I know, they're just making this number up - how would I know what the toll at the airport exit costs?

Also, many cabs have a list of flat rates for common routes (from Hotel X to airport - $35, etc.) It seems that in these cases it would be independent of whatever the meter says.

I guess these things make it seem questionable to me how much regulations on metering can actually matter. Is it just a matter of "if we catch you doing this (ie. someone reports questionable activity), we're going to revoke your license"?

bri3d3• 14 years ago

I agree that the metering complaint is valid - I suspect it may be possible to create a nefarious drop-in replacement Uber Driver app which reports longer rides. The only location / metering source Uber has the iOS app and there's no additional hardware or software protection on the driver's Uber iPhone beyond the standard OS protections, which are easily circumvented by a jailbreak.

In contrast, real taxi meters provide no software access beyond a few defined interactions and limited and intentionally obvious physical access (start/stop meter) only, and the hardware is built to be relatively secure from tampering.

Uber could use the rider's app as a verification of distance, but as there's currently no incentive for users to keep the Uber app open while they ride, I suspect this method wouldn't work right now.

I like the idea of Uber, but, like Square, I think it's only a matter of time before a nefarious party exploits the easy availability and comparative insecurity of smartphone hardware to scam someone and disrupt a new smartphone-based industry.

tarr11• 14 years ago

Had to look up "rent seeking", I'm sure I'm not the only one

In economics, rent-seeking is an attempt to obtain economic rent by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth, for example, spending money on political lobbying in order to be given a share of wealth that has already been created. A famous example of rent-seeking is the limiting of access to lucrative occupations, as by medieval guilds or modern state certifications and licensures. People accused of rent seeking typically argue that they are indeed creating new wealth (or preventing the reduction of old wealth) by improving quality controls, guaranteeing that charlatans do not prey on a gullible public, and preventing bubbles.

http://en.wikipedia.org/wiki/Rent-seeking

rhizome2• 14 years ago

You might also be interested in the concept of regulatory capture, which is kind of rent-seeking's opposite (IANAE). Say you have a company that provides web-security audits and you help press for a law requiring websites to have current security audits. Boom, guaranteed business.

andrewpi2• 14 years ago

Except Uber isn't a cab, it's a private car service, which is generally less regulated. Rates for private car services are generally negotiated between the driver and passenger, and if both parties agree to use Uber's GPS-based software, I don't see what Massachusetts's problem is.

jaylevitt4• 14 years ago

More importantly, Uber is neither a cab NOR a private car service.

It's a communications network that links private car services with people who want to get a ride from the private car service.

mikeryan• 14 years ago

The argument they are making is that both parties are agreeing to traveling a certain distance for a certain price. But the tool which measures the distance must be an approved measurement device in order to prevent fraud.

I can agree to pay my super market a dollar for a pound of apples, but the dept. of weights and measures still validates the scale. That's the consumer protection that the state is arguing for.

Note the whole is it a cab or isn't it argument isn't actually germaine to this complaint (they actually dropped the unlicensed livery service complaint) its wholly based on the legitimacy of the measuring device

jellicle• 14 years ago

If Uber were using flat rates, this problem wouldn't exist. But Uber is actually selling miles-in-a-cab, and the government is rightfully pointing out that due to a very extensive history of businesses manipulating weights and measures to increase profits, the measuring device used to measure miles-in-a-cab ought to be one that has been inspected by the government.

gojomo4• 14 years ago

The small parts of the regulation that weren't rent-seeking -- a legitimate interest insuring a certain level of safety and responsibility, back when it was hard to hold bad-actors accountable -- have been made obsolete by mobile/reputation/marketplace technology.

Now, bad or inconsistent service can be made widely known almost instantly -- not just through Uber's own mechanisms, but also other review/complaint platforms.

The whole legacy regulatory architecture now can and should be discarded, replaced with a minimal kernel of regulations about clearly identifying a service provider and its terms, to enable the new market-oriented feedback mechanisms to work.

DannoHung3• 14 years ago

> The small parts of the regulation that weren't rent-seeking -- a legitimate interest insuring a certain level of safety and responsibility, back when it was hard to hold bad-actors accountable -- have been made obsolete by mobile/reputation/marketplace technology.

What? No they haven't. And it's still hard to hold bad actors accountable. Especially if you don't have the foresight to identify them perfectly.

> Now, bad or inconsistent service can be made widely known almost instantly -- not just through Uber's own mechanisms, but also other review/complaint platforms.

And there is moral hazard in every single company providing business reviews as its principle service.

> The whole legacy regulatory architecture now can and should be discarded, replaced with a minimal kernel of regulations about clearly identifying a service provider and its terms, to enable the new market-oriented feedback mechanisms to work.

Yeah, sure. The blind marketplace god will solve all our problems. OR powerful actors will rise up, quash competition and make things awful.

Seek a bit of fucking balance, man!

emmett5• 14 years ago

So with #1, that's the Boston's right. But it's not what the C&D is about, so we should set that aside. This is about #2.

With regards to #2, it's clearly reaching. You can make an argument that they're "measuring the distance with the iPhone", but clearly they're measuring it with GPS. The iPhone is not a measuring device. If they used the accelerometer in the iPhone to measure distance, it might be a fair point.

If they don't want GPS used in commercial transactions it's within the city's power to ban it. But that's what they're doing: banning the use of GPS in commercial transactions. Not banning Uber's iPhone app.

I don't think the city is willing to do that, since this is really about screwing with Uber using whatever regulation they can find and not about fairly enforcing the rules.

kd5bjo• 14 years ago

Yes and no; the location accuracy of a GPS receiver is strongly dependent on the accuracy of its timing source. The Dept of Weights & Measures generally certifies the accuracy of each physical device. In theory, the drivers could get their phones certified for measuring location and have one of those green stickers on the back that one of the other commenters mentioned.

In practice, any driver that tries will probably find it basically impossible to do, as I believe your analysis of the city's motive is correct.

temphn• 14 years ago

  Boston has standardized on a way of metering passengers

But more than a dozen other cities allow Uber to use their own way and the world hasn't ended.

Why should passengers care about what the city of Boston has "standardized" on? Why not just let passengers vote with their wallets? If Uber is too expensive or the drivers gain a reputation for ripping off customers, they'll just choose another cab. But the real problem is that Uber is actually too much better than the competition, which is why you see this kind of harassment occurring.

Regulation of this kind is about as corrupt an example of rent-seeking and resistance to technological innovation as you are likely to find in a lab. It's not a close call.

jaylevitt4• 14 years ago

Boston has standardized on a way of metering taxis.

Taxis get a government-sponsored monopoly - a limited-quantity medallion - which allows them the right to pick up a passenger anywhere in a given territory (e.g. Boston, but not Cambridge). In exchange, they are required to pick up ANY passenger when on duty (they cannot legally decline to drive you somewhere), and they are required to charge you pre-determined rates as measured by a pre-determined meter.

Livery, or "black sedan" services, are not permitted to pick up arbitrary passengers who are hailing a cab. However, they are also not required (or allowed) to have a medallion, and they are not bound by any metering or pricing regulations at all.

I believe the theoretical distinction is that when hailing a cab, you are in a position of no negotiating power - you are limited to whatever cabs happen to drive by. "Being able to hail a cab" is a public utility. So the city has pre-negotiated a generally acceptable contract.

In contrast, you (pre-2012) are negotiating a contract with a livery company. You can choose any livery service you want from a phone book or directory, you can ask about their rates, pick a specific time, perhaps choose the type of car, etc. There's no "certified" locked meter, because the price is something you negotiate, and you have a choice of vendors.

Here's where Uber flips the industry on its head. Medallion owners tolerated livery companies, because without the medallion, livery services were restricted to pre-arranged rides, and most livery services couldn't offer a large enough fleet to provide low dispatch times without advance notice.

Uber forms a communications network linking ANY interested livery driver with ANY interested passenger. You pre-arrange the ride, but you pre-arrange it minutes before pickup. And Uber provides an Internet-era dispatch system; they've replaced grumpy dispatchers, two-way radios, and kickback systems with two iPhones (yours and the driver's) with built-in GPS. They can route your "call" directly to the closest in-network driver. Uber isn't a florist; they're FTD.

As far as I can tell, Massachusetts doesn't have any statewide regulation of livery services; each town has its own rules. Worcester apparently had a "12-hour rule" that defined what qualifies as a "pre-arranged ride", but that's been suspended or something.

So IANAL, but here's the situation as I see it:

- Uber isn't operating a livery service, period. They provide a dispatching network that's used by licensed livery drivers. - Livery drivers don't have to use any kind of meter. They charge a negotiated price. With an Uber driver, you have negotiated a price based on "mileage as the iPhone GPS records it".

Which gets back to "which measurement devices used in trade are regulated in Massachusetts"? See my cup-of-dice comment elsewhere.

dreamdu5t• 14 years ago

Thanks for such an insightful post :)

chimi• 14 years ago

I don't think being a startup should grant you immunity from the law or absolve the requirement to follow local regulations and licensing statutes. Lawyers, doctors, electricians they all have to follow the law too.

Why is Uber a special case?

tptacek9• 14 years ago

Two reasons (neither dispositive):

(i) The cities in which Uber operates usually have dysfunctional cab systems. San Francisco, for instance, is notoriously underserved.

(ii) Much of the regulatory overhead in running a cab/livery service really is an artifact of top-down market controls from the turn of the last century that have been exploited to lock the market to a privileged few operators.

jhcoaps23• 14 years ago

Marijuana shouldn't be regulated as it is.

Should startups be allowed to sell Marijuana? Of course not, either everyone should, or nobody should. Level playing fields and all that.

ryanglasgow2• 14 years ago

These are two good reasons for the law to be reformed, but not for why Uber is above the law.

I see no reason for Uber to be exempt from the same regulations other services must abide by.

calciphus• 14 years ago

Imagine for a moment you got into a taxi and instead of the meter, he had an hour-glass with tick marks on the side and a bike odometer. Would you feel secure about what you're being charged?

Most of the Uber drivers use iPhones, which (especially the older models) have notoriously bad GPS. If it skips off to the wrong street for a few blocks and adds 1/4 mile to my trip, and I don't notice by staring at his screen, how would I know? Normally, I trust the cab company because that little meter is tracked, registered, and supposedly regularly audited.

emmett5• 14 years ago

I would add:

(iii) It's unclear Uber is actually in violation of the law. Boston may have sent a C&D, but this hasn't been tried in court yet and I would not be surprised if Uber was to win.

jhcoaps23• 14 years ago

I have to agree with you.

The original Ubercab model (allow anybody to sign up as a driver without any vetting of anything) was absolutely atrocious. The new one is better, but uber drivers benefit from customers who feel like the product is as safe as the regulated product without actually doing things like ensuring that the cars are inspected.

That said, I pretty much lost respect for Uber when they pretended that expressing high-demand rates as a multiple was clear. Nobody with any UX experience would've agreed with them that it was clear... but they all would've agreed that it's a great way to camoflague massively inflated rates.

bengl3rt2• 14 years ago

"The original Ubercab model (allow anybody to sign up as a driver without any vetting of anything) was absolutely atrocious."

What about Lyft? Isn't that essentially what they're doing?

ktizo• 14 years ago

the Division of Standards is claiming that until the National Institute of Standards and Technology has guidelines in place for GPS location technology

Is not as though GPS is some brand new thing that they have never heard of before. This whole tone of this makes me think of Central Services from the movie 'Brazil'. Uber should ask the Division of Standards for a 27b/6, just to keep things official.

tptacek9• 14 years ago

That's not what they're saying. They're saying that under MA law, a cab driver couldn't replace their meter with the "equivalent" GPS system, and so neither can Uber.

theorique2• 14 years ago

This hits close to home (literally). I've used Uber in Boston lots of times and while the service is pricier than conventional taxis, it's a nice way to guarantee yourself a ride at high-demand times.

This is not competitive with existing taxi service but complementary: if I see a regular taxi coming, I'll take it; if I need to call for a guaranteed car at an odd time, I'll use Uber.

I hope this gets resolved in a way that works for us customers. Innovation should be harnessed, not punished.

fxm4139• 14 years ago

This is especially sad considering a recent cab experience I had in Boston. I lived in Boston for a about 5 years before moving out to Seattle, where I recently started using Uber. Boston has one of the worst cab situations especially if you go out late at night. I was back in Boston a few weeks ago, and ended up running into a few friends and stayed up till 3AM. When it was time to go home, there were either cabs that had passengers, or ones that just didn't want to stop despite waiting for 10 minutes. I pull out the Uber app and get a ride in literally a couple of minutes. My friends hadn't heard of the service and they were just dumbfounded that something like this existed, and they all became customers on the spot.

In Seattle, I use Uber only when I have to since cabs are easy to get. I can't imagine using Uber in Manhattan. But in a city like Boston with a shortage of cabs, and just generally grumpy cab drivers I can imagine Uber was just putting a serious dent in the cab business, more so than other cities.

zacharycohn• 14 years ago

(Hello fellow Seattlite!)

I'm with you here. I rarely take cabs here in Seattle (I mostly bike/bus everywhere), but when I travel it can be indispensable.

I can't tell you the number of times I've had to (look up a local cab service and) call a cab, wait for it for 10-20 minutes... and not have it show up. Or schedule a cab to be there to pick me up early in the morning and take me to the airport and... not have it show up.

Three clicks on my phone and 2 to eight minutes later, there's an Uber.

mamoswined• 14 years ago

Yeah, regular cabs have their place. I take them when I can, because they are cheaper. But in Chicago many will give you a problem if you don't pay in cash and many neighborhoods are underserved. When it's 3AM and I'm in a far-out fairly sketchy neighborhood, I'm SO glad Uber exists.

picklefish• 14 years ago

For anyone wondering what uber is: https://www.uber.com/cities#

uuilly2• 14 years ago

Uber, AirBNB and Food Trucks are interesting for two reasons:

1) They are on a collision course with the regulatory state.

2) Their employees are, by and large, young liberals.

Cab medallions are not much different in concept than wind and solar subsidies. In both cases, the government is picking a winner.

Our types of companies have been happily immune from the meddling of the regulatory state. As we crawl out into the real world we are dog-fooding the polices we voted for. Hopefully we will realize how bad they taste.

Ralith• 14 years ago

Damn liberals, screwing everything up for the rest of us!

andylei2• 14 years ago

> wind and solar subsidies

> the government is picking a winner.

Sometimes picking a winner is a good thing.

Burning coal and oil pollutes air and exacerbates global warming. These are bad things. As a society, we should pay a little extra to avoid them. Wind and solar subsidies are probably less efficient than, say, a carbon tax, but probably better than nothing.

driverdan• 14 years ago

Except it stifles innovation in other sectors. There may be alternatives that are better but aren't subsidized which makes it harder for them to succeed.

drone2• 14 years ago

Interesting point. I looked back at the world where no such regulations existed, and I didn't see a perfect market which quickly and efficiently eradicated charlatans and thieves. No, instead I saw a world where people were constantly being preyed upon by the guiled class. I saw a world where the only people you could really trust were those in your close personal circle, and every transaction with a 3rd party, new or known, was rife with risk.

The "regulatory state" didn't come about as a predicted social experiment, it came about by constantly reacting to an endless stream of malfeasance that constantly stood to wreck any possibility of a functioning free market.

Cities and states regulating measurements and fare mechanisms are generally a -good- thing, even when it affects some darling company. For every darling company that wants us to "just trust them to do the right thing, they're good Silicon Valley-types," there are a dozen would-be scamsters plotting how they can take advantage of similar models to make free money. The constant "free market response" is "Oh, well, people will just shop somewhere else." Yes, after having lost their money (some times many, many people losing their money) AND their trust in any company like the same.

The world of figuring cab fares doesn't exactly need to be "turned on its head," it's a well-established practice of livery that's been going back for hundreds of years (perhaps more - I don't know the complete history). Yes, new technology can make it more efficient, but how inefficient is the current system exactly? Is it worth the risk? This is what local communities ask themselves. Why should one company be granted the permissions to step outside of the decision process and state they don't want to follow the community rules?

Every action by a government, and most especially inaction (failure to regulate) picks winners and losers. Failing to regulate pollution levels, cab fares, food safety, etc. make winners out of moderately unscrupulous types and moderately scrupulous types. Certain forms of regulations can make winners out of either the highly scrupulous, or the highly unscrupulous.

Nothing tastes bad to me about not letting cabs just use their iphones to automatically calculate fares from unmonitored and unvetted software. It makes it harder for Uber to make money? Well crap, cry me a river, it's better than making it easier on the thieves - society has chosen that path over millennia.

uuilly2• 14 years ago

So on one hand, the world is rife with thieves and scoundrels and the state is the only thing standing between what we have now and Mad Max. On the other hand you're willing to entrust people working for the state with with powers undreamed of by the thieves and scoundrels.

But what happens if thieves and scoundrels hold positions within the state? Restaurant owners pay them to make laws against Food Trucks. Cab drivers pay them to make laws against Uber. Hotel owners pay them to make laws against AirBnB. In the wrong hands, the regulatory state becomes a weapon. That is what is happening now.

_delirium• 14 years ago

As I understand it, food trucks are mainly running into trouble where they do business while parked on streets. It does seem reasonable to me that the public regulates whether you can park a big honking truck on the street and operate a retail business there. For example, Atlanta bans food trucks on public streets, but they operate out of private parking lots when the landowner has given them permission to do so (they often make the rounds of corporate offices). There's even a privately-operated "food truck park" where a number of them gather: http://atlantafoodtruckpark.com/

endersshadow• 14 years ago

Bringing it closer to the story, Boston limits food trucks, as well. They can only be in certain spots in the city, and space is limited. This causes a lot of kvetching by food truckies and their fans. Of course, traffic in Boston is absolutely insane, and I'm not wont to support food trucks anywhere and everywhere in the city.

So, Boston is right in the cross-hairs of the, "Why can't you understand innovation?" crowd. There's a lot of really good reasons why you can't let food trucks roam free and do business wherever in Boston. There's also a lot of really good reasons the Department of Weights and Measures exists. Sadly, I don't think those reasons will be considered by fans of these services.

That being said, I'm a huge fan of Uber Boston and I would like to see them be able to continue operating. If they would discuss with the city of Boston (or the Commonwealth) how they could become compliant with the law (or can agree that they are, in fact, compliant with the law), even if it means regular government audits, then that would be fantastic. I worry that Uber will take the child's approach and shove their fingers in their ears and yell, "LALALALALA I CAN'T HEAR YOU!" Hopefully they'll understand that they need to work with regulators, and that they actually do so.

kine• 14 years ago

I love it how they wear it as a badge of pride. It's the first step to changing the game in Boston.

megakwood• 14 years ago

How absurd.

localhost3000• 14 years ago

i think the uber service is great. that said, we (collectively, the startup community) can't keep using this "we're an innovative tech company and the laws we're breaking weren't written with our great innovations in mind" argument. it doesn't hold water. it just sounds childish and pompous.

anulman5• 14 years ago

TL;DR: Uber is innovative, but their approach (or lack thereof) to dealing with regulatory hurdles in each city disgusts me.

It seems like HN has already picked up on the major issues Uber faces in Boston, as well as pretty much every city: a new style of relationships with drivers, and "metering" virtually-on-demand livery rides, which are intended to be both unmetered and pre-arranged.

After seeing this same story repeated too many times now, and the resulting discussion, I feel the need to throw down. You don't need to trust me (IANAL, etc.), but based on my experience in the field -- I co-founded HireWinston (initially a Canadian, corporate-focused Uber competitor; we've since pivoted to competing indirectly by selling taxi fleets) -- I hope I have something to add.

First, the relationships with drivers: Uber tends to work directly with drivers (many, if not all, of whom they hire legally from existing livery services). In order to boost their chances of availability, they spend some of their hard-raised cash to book drivers for entire days, taking a steep loss at first in the hopes of driving enough demand to better satisfy their capacity.

In most cities, there are clear regulations that define a livery service. We found that, if you work as many commenters understand Uber working -- namely, as a network that has pre-arranged agreements with drivers or livery services to shuttle rides in their spare time -- you're in a sufficiently comfortable area not to get shut down. However, the way Uber works to juice supply (especially in newer markets) tends to clearly fall under the definition of a livery service, as they have their own "employees" that they pass rides to.

Second, the meters. This one I'm much more in their favour on: the phones themselves are not metering devices as the laws define them (i.e. they do not themselves calculate the price). I haven't personally torn into their source code, but having heard from an insider and having built this tech myself, I'm fairly confident their Driver App simply sends GPS data back to the server, where the calculation takes place according to a pre-defined rate. The customer either implicitly or explicitly accepts this rate through the TOS and/or by virtue of using the service (assuming the rates are published somewhere).

This setup guarantees they have something to show regulators if ever asked. From our research and testing, the integrity of the data from existing metering technology is similar enough to that from an iPhone or Android's GPS (ideally accompanied by accelerometer data). And, since the calculations happen on a server that records full route information rather than in a black box that discards it: way easier to share this with regulators. So A+.

Third, and most importantly, is what you don't see: Uber's relationships with city regulators. In Toronto, the municipal government sent us an official notice that they were concerned with our business, and that they wanted us to come talk through our business model and underlying technology with them. They were genuinely excited that there was innovation happening in the field in their city, and really just wanted to make sure we weren't doing anything egregiously wrong.

We sat down, and had an incredibly pleasant meeting. 30 minutes, back-and-forth Q&A, with some regulators who have spent years in the space. They appreciated that we knew the laws, had worked to abide by them, and were comfortable with all but one aspect of our business model (cancellation fees). No C&Ds were sent out.

At the end of the meeting, they asked us what we thought of Uber. Apparently, for months, the Uber team was dodging any request for a meeting the office sent them. While I definitely cannot attest to Uber Boston's actions on this front, I can't imagine that Uber Toronto was taking their plays from a different playbook.

In summary: Uber has done a tremendous job pushing the industry forward, and I'm confident that our approach -- selling the underlying software to existing taxi fleets, who truly want to better service their customers but have no idea what to do with technology -- is a more sustainable and dependable iteration on the model. I'm thankful to them, and I truly love a lot of the folks I know who work there.

That said, I have no sympathy whatsoever for these C&Ds whenever I read about them. The company relies on deep pockets and public sympathy for the "underdog technology company" to change laws, rather than working with the existing system. And, frankly, normally I'd even be fine with that... if it weren't the taxi drivers -- the most marginalized members of the entire taxi ecosystem -- who were getting the shortest end of the stick.

DISCLAIMER: I do not, and have never, worked for Uber. Most of my knowledge comes from a mix of an outsider's view and third-party testimony of the approach that Uber has taken in Toronto and NYC. I'm not sure if Uber Boston took a different approach than Uber Toronto or Uber NYC, so take all specifics with a grain of salt.

(edit: formatting errors)

ericdykstra2• 14 years ago

Nice post, and you definitely bring a certain amount of insight with it.

However, the current system is, in many cities, broken. Working to change laws to fix a broken system will produce a better outcome than trying to work within the broken system to bring about its maximum potential.

I love and use Uber because it provides a different and better service than taxis do in San Francisco. I don't even own a car, and instead split my transportation budget between public transportation and Uber. ZipCar has its uses for some people and some situations, but for me, Uber is my go-to reliable transportation system.

Comparing and contrasting Uber with SF taxi service:

- I've never had a bad experience with an Uber driver, whereas ~30-40% of my taxi rides were unpleasant in one way or another.

- It takes all of 30 seconds to call an Uber, and they always come. Calling a taxi dispatch takes much longer and is extremely unreliable, as many taxi drivers will pick up anyone that hails them on their way to picking someone up.

- Uber takes care of all payments through the app, including tip. My credit card is charged, and it gets recorded in Mint and added to my transportation budget for the month. Many SF taxi drivers will harass you if you try to pay with a credit card.

- Uber drivers will open your door for you, call you to make sure they pick you up at the right place, and many offer to help carry bags. Taxi drivers are usually in a rush, and don't offer anything besides the ride.

These are my experiences in a year in San Francisco. I used taxis exclusively for a while because they're cheaper, but have since switched to using Uber nearly exclusively. And with UberX now, the cost difference is negligible. I see no reason to own a car in SF as long as I'm here, and the reason for that is Uber. [[I am in no way affiliated with Uber with the exception of being a customer]]

anulman5• 14 years ago

Thanks -- this is a subject that is near and dear to me.

I definitely agree with you that there is a service gap between Uber and standard taxis. Some of it comes from the app, some of it comes from their quality control.

(On that note: Uber does a really solid job with quality control, and I've personally recommended a stronger emphasis on quality control to fleets we work with. They all seem to want to take us up on it, so I look forward to reporting back on that one soon!)

That said, the points you bring up aren't actually broken by the current regulatory system (save one, sort of... see the asterisk), which is why I am disgusted by Uber's typical reaction to the C&Ds that come their way (and their preparation for them):

- Taxi companies today have a very limited, only-opt-in feedback mechanism: you call and complain if you have a particularly bad or particularly good ride. I've personally spoken with GMs for companies that do hundreds (sometimes thousands) of rides per day about this; they rarely break 20 customer service calls per day. Uber's feedback mechanism -- not a new concept by any means, but new to the industry -- of asking users to rate their ride, and send in some comments after every ride is relatively frictionless and undoubtedly leads to more data points, which can then be shared with drivers to encourage a healthy sense of service. This could and should be adopted by the rest of the industry.

- Again, this is a fantastic innovation, but doesn't need to lie outside the existing regulatory system to succeed; our old business model is proof that they can co-exist. Rarely do cities take issue with apps. Further, most fleets use dispatch systems that directly assign a driver, and all drivers know they will get docked if they take a street hail instead of the passenger they're assigned.*

- Yet again, no regulations prevent this... but I've been the recipient of many a complaining driver myself. While drivers have both legitimate and illegitimate reasons for trying to avoid credit cards (fleets often tax drivers an additional point or two above going credit card rates; credit card transactions must be declared when filing taxes), this again can be solved with an app that respects the current system. In fact, while running HireWinston, we showed our driver partners that the guaranteed 15% tip more than made up for the increased cost they incurred by taking credit cards.

- See first bullet above re: service again.

To sum up, I hear you on all fronts: riding with Uber offers a superior experience to virtually any other cab out there. My point above, however, still stands: all of the innovations and improvements you bring up (which are, from our customer research, consistently the most salient) come from areas that few, if any, regulators take issue with (I know from experience). Which is why, again, I am disgusted by how I've seen Uber deal with regulators.

*I feel for you, though; this situation is at its worst in SF. But on the flip-side, I've heard more "passengers aren't there anymore when our drivers show up" complaints from SF fleets than I have anywhere else in North America. Because of this, it's often more attractive for drivers in the Bay Area to get docked and grab the street hail's certain money than to risk the no-show. IMO, SF taxis and consumers are stuck in this perpetual loop until the supply of taxis increases dramatically.

carterschonwald2• 14 years ago

Super lucid break down of a lot of the issues. I have a bit of operation understanding because very early spring, a friend and I were exploring doing an fleet/taxi management application for the NYC FHV drivers and even were at the TLC taxi app rfp reading. All of these points are lucid and concord with my knowledge

Note: I'm not doing anything in that space presently (merely did a thorough exploration of it), all the human factor issues terrified me, I like my good ole hard core math & computer science & engineering challenges! :)

anulman5• 14 years ago

Thanks, Carter! My partner Krista tried to come into town for that meeting, but they switched the date on her. You almost met!

The human factor is definitely a huge challenge in this industry, and I can understand anyone's aversion to it. That said, if you ever want to chat taxi tech (or FP -- we're migrating more and more of our backend to Erlang every day, and I'd love to learn from your Haskell experience ;), drop me a line!

marshray• 14 years ago

I'm not impressed with Uber. I read the entire article twice and many of the comments, then went to their home page.

I still have no idea what they do other than it somehow relates to taxicab service.

jeffdavis3• 14 years ago

* Reliable pickup in about 10 minutes by hitting a button on your phone or a text with your address -- no need to call or tell someone the address. If you've ever had the experience of waiting 30-45 minutes for a cab to ride a couple miles, or maybe the phone line is just busy, you'll know why reliability is important.

* Clean car with friendly and helpful driver (who you can rate). Seems minor, but it opens up possibilities. If you're on a date or business meeting, and for whatever reason need a ride somewhere (e.g. after drinking), uber will enhance the experience rather than cheapening it.

* No money changes hands (taken from your card on file at uber, including tip). Receipt with lots of details (including your route on a map) is emailed immediately.

* I'm pretty sure it's cheaper if you are above $15 fare, or about the same maybe.

I don't have any affiliation with uber, but I have had a great experience so far (only twice, once for me and once for someone else). I plan to use it a little more often.

I guess, in retrospect, I could probably have been happy using cabs more instead; but they just always seemed more awkward, unreliable, and just less pleasant. If I can get this for the same price, why not?

Cabs might still be better for areas where they are easy to get and you're going short distances, e.g. Manhattan or Las Vegas.

rprasad4• 14 years ago

Uber is a taxi/livery service that magically uses technology to do things that shuttle/livery services in major cities have already been doing for years.

The difference is that: (1) Uber is a startup, (2) Uber is backed by YC, (3) Uber lets anyone be a driver, (3) Uber ignores the laws and/or regulations in the cities that it operates until it gets caught and threatened with major lawsuits/fines, and (4) Uber promises 10-minute pickups (sub-hourly timeframes between reservations and pickup are the defining line between livery services and cab services in many cities).

Uber Boston Has Been Served

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