Berlin bans Uber app citing passenger safety

http://www.bbc.com/news/business-28788142

by Schweigi • 12 years ago

33 61 12 years ago

"The Berlin authority said passengers may not be covered by insurance because they aren't traditional cabs."

Well, figure it out. Seems like something that could be answered with a phone call to an insurance company. It probably would have taken less time than banning Uber.

If they had and the answer was "no, they're not" it would be an easy fix.

I'm probably reading into it, but this is a pretty shaky excuse.

claudius2• 12 years ago

The regulations regarding commercial passenger transport are relatively strict requiring appropriate driver’s licenses, vehicles etc. This is the main reason for the “ban” (it’s really more of a reminder ‘hey, what you’re doing is illegal‘).

Furthermore, essentially all standard car insurance companies explicitly exclude commercial use of the vehicle, so it stands to reason that most Uber drivers do not have an appropriate insurance.

anonythrow• 12 years ago

It's figured out. They're not properly insured. Thus the ban. It's just bad reporting.

Xylakant14• 12 years ago

Well, the Hamburg Authority did that, it's a funny read: https://www.dropbox.com/s/2aok79ru2kyrn30/SBWVI-PRT-71407181... The response of the insurance company was: No, this is not covered under the insurance contract and we canceled the contract for that violation.

So yes, the insurance for private car owners does not cover commercial activities - no surprise here. And it's not an easy fix, because the premiums for commercial contracts are much higher, making the whole business idea much less profitable. And then, there's another long laundry list of code violations that Uber has to fix. I'm all in for letting Uber compete with cabs, but please, stick to the same rules and don't pretend that "disruption" is an excuse for "illegal".

fabian2k2• 12 years ago

From what I read in other articles (e.g. http://www.golem.de/news/fahrdienst-app-uber-macht-in-berlin...), Uber insures the drivers, but with a lower maximum payout for damages of 3.5 million. The mandatory minimum for car liability insurance is 7.5 million for damages against persons in Germany.

probably_wrong2• 12 years ago

I have to wonder about this quote:

As a new entrant we're bringing much-needed competition to a market that hasn't changed in years.

What does a San Francisco startup knows about the taxi situation in Berlin? Uber has often been well received in cities where taxi service is inefficient, but are berliners really unhappy with the service? Does Uber know that taxis in Berlin are used mostly by tourists, and therefore are not that hard to catch?

Maybe Uber has spent a lot of time researching the German market, or maybe they are following Walmart steps[1] in applying US notions to a foreign market. But after living in Berlin for a year, I have to wonder: if Uber's free-for-all approach clashes against Germany's love for paperwork, whose fault is it?

[1] http://www.dw.de/worlds-biggest-retailer-wal-mart-closes-up-...

oleganza• 12 years ago

Every person who takes Uber ride votes for Uber and against other taxis. If berliners are all happy with taxis, Uber wouldn't earn a penny there. But since they do and are willing to invest into challenging the ban in court, it's an indicator of existing demand for Uber.

Now who is this Berlin "authority" to decide for people how they should travel from point A to point B? I don't care if Uber is from SF, Berlin or Hong Kong. They are not forcing people to pay them unlike governments that extract taxes and then tell taxpayers how they should live.

claudius2• 12 years ago

Every person who takes Uber ride votes for Uber and against other taxis.

Or maybe every person who takes an Uber ride has been fraudulently deceived into assuming that their ride was insured, approved by the appropriate authorities and generally safe.

Now who is this Berlin "authority" to decide for people how they should travel from point A to point B?

It’s the appropriate authority relevant for local public transport, legitimised by general elections and bound by laws passed by the democratic institutions of the state of Berlin and the FRG.

I don't care if Uber is from SF, Berlin or Hong Kong. They are not forcing people to pay them unlike governments that extract taxes and then tell taxpayers how they should live.

They also incentivise drivers to use their cars while not covered by any insurance, hence essentially endangering the general public. They furthermore try to appear as a legitimate and legal business while failing to meet the requirements necessary to transport persons commercially.

Xylakant14• 12 years ago

The authority deciding that is the German Transportation Law (Personenbeförderungsgesetz). In germany, cabs and cab-like services are treated as part of the public transport system, much as busses and trams and trains and subways. The license holder has certain rights, but the license also comes with certain obligations, for example the requirement to provide service to any person asking, to provide a minimum amount of service (i.e. make sure enough cabs are available) etc. Uber tries to skirt the obligations while still retaining the benefits and calls that "disruption". They get slapped down for that over and over again and then complain rather than fulfilling the obligations and then compete. If they don't like that, well, ignore the market.

probably_wrong2• 12 years ago

Now who is this Berlin "authority" to decide for people how they should travel from point A to point B?

I think this is a great point to illustrate the difference in mentality between Germany and the US.

From what I've experienced, people in Germany trust their government to make sure things are the way they should be. As an example: every apartment is required by law to provide a certain amount of natural light. You literally cannot offer an apartment without windows, nor with windows that lead into a wall.

And you could say, like I did, "but what if I want to live in a windowless apartment because it's cheaper?". The German answer to that is "No, every person deserves decent living conditions, so you are not allowed to offer something that is not decent, even if there is people willing to pay for it". That's the German way of doing things, and germans seem pretty happy about it.

Of course, this line of reasoning wouldn't fly in the States. I think Uber failed to understand that the German government will not allow a service that does not meet the approved standards, even if there's people willing to pay for it, because as a German citizen you are entitled to (and implicitly expect) a certain quality of service (insurance, availability) that Uber is not providing.

dreamweapon2• 12 years ago

If berliners are all happy with taxis, Uber wouldn't earn a penny there.

I think you meant to say "If Berliners were so happy ..."

Now who is this Berlin "authority" to decide for people how they should travel from point A to point B?

It's called "State Department of Civil and Regulatory Affairs", in English, according to the article. Which perhaps you could have read more carefully.

Vik1ng4• 12 years ago

   Every person who takes Uber ride votes for Uber and against other taxis.

I really don't know what Uber could do to make my cab rides better. All cabs I had in Germany were clean and in good shape, often even a Mercedes http://pressemitteilung.ws/files/Taxi_%C2%A9%20Stefan%20Rich...

  it's an indicator of existing demand for Uber.

Not it isn't. First of all they have to do it, because if they take a loss here they chances are something similar might happen in other states and countries. Also they know they can compete if cabs have to stick to regulations and they don't. If you have flexible pricing or can deny a ride, but a cab can't you have an advantage.

tormeh• 12 years ago

Well, excessive paperwork is always bad. But yeah, between public transport and biking I don't think taxis are of any great concern here.

dreamweapon2• 12 years ago

What does a San Francisco startup knows about the taxi situation in Berlin?

Nothing, of course. They pretend to know. It's just the way they roll.

raverbashing3• 12 years ago

Exactly this

This happens in the US in a certain measure, but it's especially true for the SF "illuminati" that think every problem in the world can be solved with an iPhone app and a TED talk

Grue3• 12 years ago

Have you perhaps considered they have an office in Berlin which is staffed by Berliners, and also the drivers who most certainly aren't from San Francisco either.

Xylakant14• 12 years ago

Have you perhaps considered that the few people in Berlin, even including the drivers (and even including their passengers) represent but a tiny tiny fraction of the people in Berlin or Germany? Probably that sample is not exactly representative either. I mean, Walmart also had an office in Germany and employees, even much more than Uber will likely ever have and retired after clashing multiple time with German labor laws. It took a couple of years, but they eventually packed up and left because their way if doing business was incompatible with what a majority of us regard as proper business ethics. Disruption and all.

ddeck• 12 years ago

I'm sure they do, but I'd hazard a guess that the staff there are operational in nature and that the decision of how and when to launch there was not done locally.

mason2402• 12 years ago

are berliners really unhappy with the service?

It's quite simple: If they were happy with the status qup, Uber would not be able to gain a foothold. If they are not happy, Uber will be a popular alternative.

Xylakant14• 12 years ago

No, actually it's simple but in a different way. Either Uber complies with the regs, then it will be allowed to compete or it doesn't, the being popular won't help.

kriro• 12 years ago

I wonder if "insurance for a cut" is a thing. Basically apply the credit card model to insurance for cabs. Insurance company takes X% of all rides for providing the proper insurance needed for said rides.

Keeps the barriers to entry low (giving up a cut is easier when you just do a couple of customers on the side than having higher fixed costs) and would probably allow a smart insurance company to make a nice bundle of money.

seeingfurther• 12 years ago

I don't know much about the insurance or ride-sharing industry but on the surface it sounds like a great idea.

PinguTS2• 12 years ago

To all who think passenger safety equals insurance: you are wrong. Passenger safety is much more.

Passenger safety is mainly 3 topics, which are all have to be fulfilled: 1. The car has to be in proper technical conditions. 2. The driver is trained to be allowed to drive people around for business purposes. Higher standards apply, then for regular driving behavior. 3. Insurance, insurance of the passenger as well as insurance of third party. As for commercial drivers, they do much more millage and as such it is much more likely, that something happens.

For (1): a commercially driven vehicle makes much more millage, as such it is required to visit inspection every year, while for regular vehicle in Germany it is only every other year.

For (2): drivers with a commercial license to drive people around are required to have regular medical check-ups. Also wrong behaving while driving is judged much hard, mostly twice the amount and double the points. That means, they can easily loose their license. That way, there should be a commercial pressure on them to drive safely.

By the way, Uber does not compete only with Taxi service. Their drivers don't need a taxi license at all. Because, in Germany there are besides of Taxi additional licenses for such business. The are a number of such services, that operate within legal bounds since tens of years. The only difference between the "cool" start-up Uber is, that those have no shiny App and you have to know there phone numbers. That said, there are also services, which have an App, like http://www.mydriver.de/fahrdienst/berlin

The main problem besides safety is also, that Uber promotes and supports moonlighting/illegal work. Because their argument is, that they provide only ride sharing. BUT, if that whould be true, then why promote a new ride sharing service called UberPool? If Uber would provide real ride sharing, as they argue, then they would only start UberPool and not UberX and UberPop.

But with UberPool there is the problem for them, they will compete with lots of other ride sharing companies, which operate in Germany since years and which are well established, like Blablacar, Flinc and others.

TL/DR: If Uber would operate within the well established business practices and requirements, nobody would complain. But they don't want, because they want to be cheap on the back of actively ignoring all requirements.

conception• 12 years ago

I agree with all your points except "The only difference between the "cool" start-up Uber is, that those have no shiny App and you have to know there phone numbers." The Uber experience is significantly better than a normal cab ride. The shiny app does a lot to make the experience better, pays for the service (don't need to tip either!), tracks your driver, gives you contact information and a name/picture, as well as let you split fares between the passengers automatically, etc etc. That combined with surge pricing and the crowd sourcing nature (uber is often the only service any place but downtown or the airport) makes for a better product, safety concerns aside.

Xylakant14• 12 years ago

The mytaxi app does the same and does it for regular cabs. It's also been around Berlin much longer. I never had any problems finding a cab anywhere in Berlin at any given time. Open app, klick "need a ride", cab arrives a few minutes later. No surge pricing.

PinguTS2• 12 years ago

1.: as the other wrote, there is the App called MyTaxi, which does the very same with regular Taxi service. The funfact is, in Germany Taxi service is available on much more places than you think, even in the back coutry, and one requirement with a Taxi license in Germany is, that they are not allowed to deny a pickup. There is no surge pricing. You always pay the correct price and their is regular legal inspection that they don't cheat on you in terms of manipulation of the taxameter.

2.: The other App I mentioned, works the very same way and is even backed by one of the big rental companies, called Sixt.

bitJericho• 12 years ago

But how else would they make money?

fidotron2• 12 years ago

The bigger picture here is the trend of local governments desperately pushing against a tide of ever more pervasive globalisation.

The simple reason something like Uber will win is business travellers expect to show up in any city and for it to work. If it doesn't that's not a mark against the Uber-like, it's a mark against the city. People do not want one app per city or country, but one which works everywhere. This is beyond the scope of any government to get near.

The thing is Uber are slimy in the way Napster were taking the piss a bit, but it's clear the space is there for someone to come in and clean up.

Xylakant14• 12 years ago

See, Uber could do it. They could just follow the regulations like everybody else, provide a better service and in the end, all would win. Or just provide the app and have a local partner in germany that does. But they don't want to. They want more: Skirt the regulations and illuminate us, but we don't want to be illuminated, especially not when the proceeds for that illumination go to ubers pockets while society bears the costs.

fidotron2• 12 years ago

That misses the point completely, which is that globalisation is forcing governments to accept a lowest common denominator of regulation.

You can debate the merits of this until the cows come home, but it doesn't change that it's happening, and while attempts to prevent it can have limited local short term success the long term perspective is that the power of government, even at the super national level (such as the EU) is being steadily eroded by private interests.

As an example, we all boo whenever a country bans Twitter, but that's just them enforcing their local regulations, which I'm sure they have very good reasons for. (i.e. they may legitimately prevent a riot) This is no different.

mason2402• 12 years ago

They could just follow the regulations like everybody else

I can't speak for the regulations in Germany, but in the US, the system is designed by the "everybody else" with the intention of keeping new entrants out.

There is obviously no conspiracy, but the interests of the established firms and local governments (who raise a lot of money from overpriced licencing and fees) complement each other to restrict competition.

Thiz• 12 years ago

Passengers have the inalienable right to choose the level of safety they feel comfortable for a price, and no goverment should confiscate that right.

That's the essence of free markets.

Vik1ng4• 12 years ago

Until the driver crashes into another car and is no covered by insurance... Sorry, but your "inalienable" right end once you affect others.

Also someone will have to pick up your hospital bill I you weren't insured.

capisce• 12 years ago

Free markets suffer from negative externalities / tragedy of the commons, cartels, monopolies, race to the bottom, etc...

Xylakant14• 12 years ago

You might have missed the announcement, but Germanys system is not a free market, by choice of it's population [1]. You can believe that it should be and try and lobby for a change, but it's an inalienable right in a democracy to vote on what we all consider the rights and obligations we all want to have in a society and sadly, for Uber and its investors, that view currently does not match up with their vision.

[1] We even have that in the constitution, GG, Art. 14, Satz (2) "Eigentum verpflichtet. Sein Gebrauch soll zugleich dem Wohle der Allgemeinheit dienen."

avz2• 12 years ago

It's true that Uber follows a liberal interpretation of existing regulations and this gives rise to legitimate concerns about fairness of its competition with the incumbents. Nevertheless, the new model does offer some benefits over the old way of doing things. The two that come to mind first:

Utilization of resources. As a society we have a lot of cars. It seems reasonable to increase their utilization instead of setting aside a dedicated pool for taxi services.

Regulatory upgrade. The existing regulations and licensing regimes were meant to increase safety and quality of service, but did that at the cost of reduced competition, increased prices and granting disproportionate privileges to the incumbents. Some of the same very goals like trust, safety and quality have now been achieved by Uber and the like without the same costs thanks to the reputation and review systems long employed in the internet. This is clearly desirable.

I wish Uber engaged in more German-style consensus-seeking with the authorities, regulators and the incumbents instead of going for an all-out war. Change is clearly overdue in the taxi services, but the way it happens is just as important.

Xylakant14• 12 years ago

but did that at the cost of reduced competition, increased prices and granting disproportionate privileges to the incumbents.

This is a feature. Whether those privileges are disproportionate is up for debate. There are very few actual privileges in germany. It would be an easy thing for Uber to just get some licenses for Berlin. They don't want that though, because the regulation also places burdens on the license holder: No right to deny a ride, even if you're making a loss, fixed prices, etc.

It seems reasonable to increase their utilization instead of setting aside a dedicated pool for taxi services.

There's no requirement that forbid use of taxis as private cars. Nobody in Berlin does so, since a cab makes more money when it's driving, so drivers share cabs. But the town where I was raised, the local cab driver would use it as a private car.

Some of the same very goals like trust, safety and quality have now been achieved by Uber and the like without the same costs thanks to the reputation and review systems long employed in the internet.

Looking at how reputation and review systems get abused and gamed on the internet, I'd rather trust the Berlin administration, as incapable and weird they sometimes are.

This is clearly desirable.

I think sticking to the regulations is clearly more desirable than disrupting them. Who's right here?

Change is clearly overdue in the taxi services

I actually don't think that's the case, at least not in Berlin. Some adaptions, sure, but nothing dramatic (like does a cab really have to be white? It's useful when you're trying to find one, but a sign on top might be sufficient).

avz2• 12 years ago

Not sure about Berlin, but in many places getting a taxi license (medallion) involves paying so much money that people use mortgage-like financing to get it. This denies taxi jobs to low income and unskilled people without good credit rating.

There is clearly a lot more than taxi colors that can be improved. Rating and reviews is one such example. Price and route transparency are another. User experience (for example through replacement of call centers with mobile apps) yet another.

nemesisj• 12 years ago

I've used taxis in four major USA metro areas fairly extensively: Chicago, San Francisco, NYC, and South Florida (Ft. Lauderdale / Miami).

NYC is mostly OK, although drivers are sometimes hard to understand. Chicago was a step below, but still OK.

South Florida and SanFran were the worst. Dirty, awful, dangerous drivers.

All of those cities are very expensive, often have trouble with credit cards, and didn't have a good way to hail a cab other than calling at the time.

I can see why Uber in theory makes sense in those environments. I remember when Uber launched in Europe I got an email from someone there asking about Edinburgh (where I live). My response is that I don't see Uber doing well in Edinburgh.

Right now, in Edinburgh, I can hail a cab with an app that lets me specify my route or drop a pin where I'm at for pickup. I can see the cab on the map driving towards me. I get an automatic ringback on approach. I can pay with stored cc information or corporate account. Cabs are impeccably clean, inexpensive, and the drivers are really great. They are all trained in First Aid and most are highly accessible (you can specify if you need accessibility on booking). They will help you with luggage, engage in chat, and it's a really great experience.

There are also private hire companies that compete with the cabs. There is some tension there as those cars don't offer or require the accessibility of cars and training to their drivers, and they're on the same meter. I almost never use them. The black cab cars are really great to get in and out of particularly with luggage.

So to sum up, Uber just isn't going to do that well here in my estimation.

Berlin bans Uber app citing passenger safety

Related Stories