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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 pick

by anulman 14y 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)

ericdykstra 14y 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]]
- anulman 14y 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.

by anulman 14y ago

ericdykstra 14y 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]]

anulman 14y 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.