Uber should be suspended in California and fined $7.3M, judge says

http://www.latimes.com/local/lanow/la-fi-uber-suspended-20150715-story.html

by danso • 11 years ago

65 146 11 years ago

Systemic33• 11 years ago

Considering the massive backlash Uber has received around the world, i'm quite impressed how they can keep the show going, and investors keep funding them.

Doesn't this seem like a lost cause for VC's?

Edit:

I get that the service they provide is hugely beneficial to the customers, but if that is only possible from breaking the law, then it's doomed to fail.

E.g. If an airline company provided extremely cheap flights, by having people who just received a license to fly be the captain, then you are asking for trouble, legal and illegal.

Truth be told, if Uber pivoted to instead of cutting out the taxi companies, instead delivered the app as a service for the taxi companies, then they could probably optimize their respective companies to be able to provide taxi services cheaper and with better service.

Kranar• 11 years ago

Everywhere I've been people/customers love Uber. I live in Toronto and I think it's safe to say the people much prefer Uber over taxis.

The only significant entities who dislike Uber seem to be taxi companies and governments.

justizin3• 11 years ago

.. and the victims of accidents who find that the drivers are not properly insured, and the drivers who find that their insurance company drops them and they are liable .. and people who think that you should be able to get a fucking cab in the rain for less than $400. ;)

justizin3• 11 years ago

VC's aren't trying to make public opinion, and uber makes money.

Frankly, it probably wouldn't hurt their business as much as their ego to stop operating in CA forever, even, since they launched here years ago and duplicated the model around the world.

They would probably move their offices to NYC eventually.

Anyway, we'll see if this is anything more than posturing.

aetherson2• 11 years ago

Uber doesn't make money.

HappyTypist9• 11 years ago

Uber is not receiving 'massive backlash' from users. It's receiving backlash from authorities and regulators. Personally, the more authorities want to ban uber the more I want to use it.

mattwad• 11 years ago

Maybe it's not a win or lose situation. I wish Uber would just play by the rules and make their drivers real employees. They have so much money that sure, they won't make as MUCH profit, but it will probably still be a service worth using and will still help break the medallion monopoly. It won't happen until the governments force their hand, but hopefully it's just a matter of time.

onewaystreet2• 11 years ago

Uber loses battles from time to time, but they are winning the war.

ianstallings2• 11 years ago

I'd hate to see losing.

msellout• 11 years ago

No. It's likely that companies like Uber will cause a shift in the legal treatment of employees vs contractors. I hope that the difference will be eliminated. It's such a fine line already, very difficult to know whether someone is a contractor or an employee. Technology and market forces are eliminating the difference, the law needs to catch up. Universal health care and disability insurance would eliminate much of the difference between those labels.

dikaiosune4• 11 years ago

Throw in better retirement options than 401k's, and a few other things, and I think that might be possible.

moistgorilla• 11 years ago

Uber receives massive backlash from taxi drivers, local governments receiving political funds from taxi companies and journalists with agendas. The average consumer loves Uber

whiskyant• 11 years ago

The law is created by people. If enough people support it, the laws will eventually become overturned.

HappyTypist9• 11 years ago

I question the value of CPUC wanting detailed historical operational data. It seems like an attempt by an outdated regulatory organization to shoehorn itself by flexing its authority, creating nothing but more bureaucratic inefficiency.

What purpose does it serve? How will it make California more safe? How are the legal costs, the administrative costs, and the overhead costs justified? I think these questions should be asked more often, instead of blindly respecting that authority is good, and regulation is a net positive.

greenyoda• 11 years ago

This issue is not that CPUC wants this data, it's that state law requires operators to provide the data to CPUC. The article says:

"Uber's parent company has refused to provide data on operational data that is required under the 2013 law that legalized ride-hailing firms, the California Public Utilities Commission judge said in a decision issued Wednesday afternoon."

HappyTypist9• 11 years ago

That is a separate issue. While an unjust law is still law, it does not mean I will look down on a service that ignores unjust laws.

mrkmcknz• 11 years ago

I think Uber is a great company and I love the product.

However, I can't remember a startup that received billions in funding and having such disregard for local laws around the globe. I just don't get it. They literally don't comply with any law in any country and give zero shits about the consequences.

danieltillett3• 11 years ago

Well as long as you can cash out before the law catches up it is not a bad strategy.

themagician4• 11 years ago

This is not unique to Uber. It's a trend.

Step 1: Find a regulated industry (taxi, hotel, liquor, etc.)

Step 2: Create an app and label yourself as being part of the "sharing economy" that is disrupting the industry

Step 3: Completely ignore all regulation

Step 4: Profit — largely because you don't have to pay for licensing, insurance, etc. while everyone else in the industry you are trying to disrupt does

HappyTypist9• 11 years ago

That's not true. Uber is paying for insurance for all drivers while in a ride. Furthermore, why is licensing needed? You know a $40 billion company wouldn't be a scam.

I see companies like Uber disrupting the industry by removing inefficiency. Licensing, medallions, appeasing public bureaucrats, etc are inefficiencies. That's not to say that regulation is inherently bad, but we need to let new industries grow and see its challenges first -- instead of applying outdated concepts (like medallions, licensing) to new technology.

For example: USPS, by law, has a monopoly on mail delivery. Just imagine if USPS banned all e-mail providers and forced you to use your @usps.com inbox. Is this a net benefit? Is the taxi industry banning all ridesharing apps and forcing you to use taxis a net benefit?

danieltillett3• 11 years ago

Are we sure uber has achieved step 4? I would think it is more like:

Step 4: Find a sucker to dump the whole company on before the law catches up and walk off into the sunset.

SilasX3• 11 years ago

I agree that Uber has ignored some regulation that has a legitimate public-interest justification [1]. But what complicates the issue is regulation has also failed to keep up with technology: for example, it doesn't make much sense to mandate taxi meters when GPS do it better, or to have a phone system for complaints when an app has much more data and a better complaint response time and satisfaction.

So Uber has provided significant positive sum gains on top of whatever negative externalities they've thrown off, which makes it much harder to claim that this is a case of merely avoiding regulations others have to follow. Taxi companies could have done all of positive-sum things Uber did [2], but didn't.

So I don't think that narrative fits the situation, or at least, can't account for than 1/3 of Uber's appeal.

[1] specifically, some insurable events that are generally accepted to be the company's responsibility to cover and not the driver's.

[2] easy-to-use app, removing the tipping dance, clean cars, mutual rating, quick action on complaints, reliable follow-up when a ride is requested, pooling rides, cashless transactions, etc

the_ancient11• 11 years ago

Those laws should not be on the books anyway, the fact they disregard them is one of the main reasons I support uber.

Sanddancer4• 11 years ago

There is definitely a need for a lot of them, like mandatory safety inspections, vetting of drivers, etc. However, certain aspects of how they're implemented, like the medallion system, are obsolete and need to go away.

dragonwriter• 11 years ago

Those laws should not be on the books anyway, the fact they disregard them is one of the main reasons I support uber.

You realize the law at issue is a law Uber supported which legalized ridesharing services in California?

dikaiosune4• 11 years ago

Somehow it doesn't seem quite like "civil disobedience" when it's a multinational company breaking the law. As an example, if a more established company just started breaking laws that were inconvenient to their margins (especially safety sensitive ones) I really doubt it would be so easy to support.

mkohlmyr• 11 years ago

Companies don't get to pick and choose which laws they deem worthy of following. If you want the laws changed support an advocacy group. To let them off for blatantly ignoring legislation in a democratic society is setting a dangerous precedent.

themagician4• 11 years ago

If a regular person routinely disregards the law because they don't agree with it they go to prison.

But when a $40 billion tech startup does it, it's cool.

Got it.

jlarocco3• 11 years ago

You're ignoring the history that caused those laws to be on the books in the first place. We had more or less unregulated capitalism up through the industrial revolution, and companies screwed it up. They were disregarding safety, making children work 14 hour days, spreading food borne diseases, adding cocaine to their products, etc.

Relatively few laws are on the books just to f* people over. The vast majority of them were enacted because they addressed real issues.

threeseed3• 11 years ago

Disgraceful attitude. Uber and its supporters should wake up and realise that they alone do not get to usurp the laws made by democratically elected representatives. This kind of imperialist behaviour is antiquated, disrespectful and selfish. And is even more unacceptable from a company with a long history of childish, petulant behaviour hell bent on disrupting as much as they can.

Whilst I agree that here in Australia our taxi laws need to be improved I am not happy for Uber to just ignore important safety conditions that people have fought for e.g. security cameras.

s73v3r9• 11 years ago

Except Uber wants those laws on the books, because they consider disregarding the law a competitive advantage. Otherwise they'd be lobbying for the laws to be changed. Instead, they're just flaunting the law everywhere, and crying when they get called out on it.

HappyTypist9• 11 years ago

I think it's important to ask if the laws are necessary or helpful. To use an analogy, would you support a South Korean company who lets consumers use Firefox for online shopping, instead of the state-mandated IE ActiveX control?

For me personally, Uber's expansion has convinced me the regulation around ridesharing does not need to go beyond wha t Uber already does. I can give zero shits that some public bureaucratic can't flex its authority.

coldtea3• 11 years ago

I think it's important to ask if the laws are necessary or helpful. To use an analogy, would you support a South Korean company who lets consumers use Firefox for online shopping, instead of the state-mandated IE ActiveX control?

If a country is a free, sovereign country, and not a dictatorship, then companies should respects its laws. Period.

lukasb• 11 years ago

Who decides which laws companies need to respect?

Hey, I have an idea, how about voters.

btian• 11 years ago

From my experience, people will shop on the company's website, but will complain how they blatantly ignore local laws on news sites and forums, a la Uber, Airbnb, Tesla.

sbov• 11 years ago

Is this your gut/bias speaking, or have you done legwork on the rate of various incidences in Uber rides vs taxi rides, and based upon that seen that the regulation is unnecessary?

s73v3r9• 11 years ago

"I think it's important to ask if the laws are necessary or helpful."

I think it would have been important for UBER to ask this, and then lobby to change the law.

I absolutely do not think that is relevant when talking about a company that has decided to disregard the law, simply because it's one you happen to not like.

aaronbrethorst• 11 years ago

    I think Uber is a great company
    and I love the product.

I love the product too, but I also think they're the exact opposite of a great company. Or perhaps we have different definitions of the word "great." How are you using it?

gkoberger• 11 years ago

"Of an extent, amount, or intensity considerably above the normal or average"

They're not saying they're a good company, they're saying they're a great company.

toephu2• 11 years ago

You don't get it? The answer is simple: money. Money makes the world go 'round.

colechristensen2• 11 years ago

Uber is legal in some places.

Minneapolis http://www.startribune.com/minneapolis-joins-other-cities-re...

awwstn• 11 years ago

They literally don't comply with any law in any country

they literally break every law in every country?

dikaiosune4• 11 years ago

Sure, why not. More seriously, responding to hyperbole with pedantry isn't productive. I'm pretty sure that quote is intended to convey their general disregard for the law, rather than a concerted attempt to break every law they can.

psaintla2• 11 years ago

Because they know it will take time for the law to catch up with them. In the meantime they profit and get the public to demand their services. There are two ways to get what you want, Ask for permission or ask for forgiveness.

s73v3r9• 11 years ago

Why are they entitled to profit?

orthoganol• 11 years ago

How can people love the product? I mean it's nice, but it's just temporary relief from crappy taxi service, which will change to be better if they don't plan to just roll over and die.

If not the drivers' crutch of GPS maps, I also have to hear stories from my GF about Uber bros in wayferers trying to flirt with her. So yeah, can't say I "love" the product.

Lucratert• 11 years ago

Uber isn't complying with a law that they supported.

"California has always been on the cutting edge. The CPUC agreement further demonstrates how the Golden State welcomes and supports not only technological advancement, but a better future for drivers, riders, and our cities."

http://newsroom.uber.com/la/2013/01/california-clears-uber-t...

Tycho2• 11 years ago

The people of California can surely now breathe a sigh of relief that the government was able to protect them from this predatory company and the services it offered.

dikaiosune4• 11 years ago

The rule of law is something that every US business relies on. Further, I doubt that Uber relies on vigilante justice to settle their disputes -- they (just like everyone else) rely on the law and the courts to get what's legally entitled to them.

Tycho2• 11 years ago

Legitimate businesses rely mostly on the enforcement of contracts and protection of property.

Immoral businesses rely on government force to prevent other citizens freely engaging in otherwise harmless transactions for mutual benefit.

arielm• 11 years ago

Although I dislike the term "disruptive", this is a great case of just that. Uber aggressively disrupted the taxi industry without regard to rules or regulations and is now seeing the side of the law that appreciates those.

I personally think uber is a great service. The company's aggressive growth strategies can be questioned but given the offended industry is one that hasn't changed in ages, is controlled by a small few, and has lots of issues on its own, I think über is fine.

Another byproduct of their aggressive growth is the amount of money they've raised, which they have been and will continue to put to use on lawyer fees ;)

leereeves• 11 years ago

Details from http://abcnews.go.com/Technology/wireStory/uber-fined-7m-kee...

The judge agreed with utility commission staff who said Uber has not filed all required reports, specifically about how often it provided disabled-accessible vehicles when requested, places where drivers tend to turn down ride requests, and the causes of accidents.

jessaustin• 11 years ago

The CPUC has kowtowed to incumbent providers for decades. The wrinkle in this case is that the "incumbents" are taxi companies rather than VZN and ATT.

SilasX3• 11 years ago

This reminds me of Yishan Wong's comment about the law being "lazily evaluated" [1]. Whatever the legal merit of the ruling, the plain political reality is that Uber has establish an immense base of satisfied users and will therefore receive significant pushback on this. I personally can't imagine Uber shutting down in CA at this point: so many people are past the the "can't imagine how I did it before..." threshold.

While Uber's strategy was in a gray (if not black) area at the time of inception, by the time the law gets around to "evaluating" whether to act against Uber, the sands have shifted, vindicating Wong's point.

[1] https://www.quora.com/Why-has-Airbnb-not-been-sued-or-regula...

ranman• 11 years ago

I love uber and use it daily. I live in NYC where taxis have been getting worse and worse over the past few years.

I am very concerned about how much their "contractors" make though. Some of the drivers I speak to claim they can make 100k a year driving just Friday and Saturday nights... others say they aren't making much profit after insurance, TLC, and leasing costs.

carterehsmith• 11 years ago

Honestly, what would be nice to see, is the breakdown: who is making money, and how much, when one rides the taxicab, i.e. Uber vs Yellow Cab vs whatever-cab.

Also, whether the price is sustainable, or is it just price-dumping.

I want to give more money to the cabbie driver, and then less and less to the broker (Yellow Cab or Uber) (10% finders fee is what is common in other businesses), medallion owner (0% - provides no value), car owner (investor - 10% a year would be great investment), licensing board (fixed fee, say $300), insurance ($thousands per year for sure), and whoever else is trying to make money on this.

superuser22• 11 years ago

This ruling is a (proposed) penalty for failing to hand over private customer data including GPS logs of trips. HN would normally love to see a company stand up to such an order.

Uber should be suspended in California and fined $7.3M, judge says

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