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* From a December 30th Wall Street Journal article on a Parisian tussle over the ride-sharing service Uber…
Paris has been a fertile ground for the new app-based car-service companies, with more than more than 12,000 vehicles now available—compared with nearly zero in 2010. It is one of Uber’s two biggest markets outside the U.S., alongside London. Revenue at Chauffeur-Prive.com is growing 10% week to week, its founder says.
In response, French taxi companies lobbied heavily for new rules, saying that they had been put at a disadvantage since rules created in 2009 allowed a new class of cars to take reservations, but not street hails, with fewer certification requirements.
Taxi drivers say that the new online services, in which a taxi can be ordered via an app and arrive at your GPS coordinates at a prearranged price within five minutes, effectively compete for passengers who would otherwise be hailing taxis. Drivers and taxi companies buy expensive licenses for exclusive rights to offer street-hail trips.
* I was in Paris just days after that article appeared. We stayed at a little, out of the way (read: relatively inexpensive) hotel. No taxis milling about anywhere. Not close to a train.
I was told that a taxi reservation would cost me 5 Euros on top of the normal fare. The wait could be up to an hour.
So, for the first time ever, I tried Uber. It worked great from my hotel (we cabbed everywhere else) and, when you included that taxi reservation fee, it was about the same price as a cab. It was also quicker than ordering a taxi, even with Paris’ goofy regulation requiring at least a 15-minute wait before Uber could pick me up (if I was staying at a 4 or 5-star hotel, however, the mandatory wait would’ve been waived).
Taxi companies everywhere are fighting back against Uber. Some Parisian cab drivers even went on strike over the issue.
Uber isn’t for everyone or for every situation. Some of its “surge pricing” could be seen as downright scandalous. They charge what the market will bear, and that means an Uber “black car” ride from the United Center to the Loop can cost more than a hundred bucks after a game or concert.
* What we don’t want to do with regulation is to be worse than Paris. A new bill (HB 4075) seems to provide some reasonable requirements, but would step on some Uber business practices as well. From a press release…
House Bill 4075, named the Ridesharing Arrangements and Consumer Protection Act, would require commercial ridesharing companies to have adequate insurance, contract with drivers who are appropriately licensed, use vehicles that are inspected for safety and serve customers with disabilities and in underserved communities.
The statewide standards in House Bill 4075 also:
· Close the insurance gap, requiring $500,000 combined commercial liability insurance;
· Require chauffer licenses for all drivers;
· Eliminate the use of waivers of liability by rideshare companies;
· Require vehicle safety standards, including regular inspections;
· Limit hours drivers can be on the road with a maximum 10 hour driving shift in a 24 hour period;
· Prohibit price gouging;
· Require accessible vehicles for passengers with disabilities;
· Require compliance with local service standards, including service to low-income communities;
· Require vehicle marking and clear posting of a phone number for customer complaints;
· Allow communities to establish and enforce stricter oversight over rideshare companies, but not to ignore the statewide regulatory threshold established by the General Assembly
Requiring vehicle marking seems silly to me. And allowing cities to go all Paris on these companies at willl probably isn’t a great idea, either.
* Let’s go back to the press release…
The Illinois General Assembly passed the Ridesharing Arrangements Act in 1983 to permit carpooling and other similar activities. The legislation was narrowly crafted to prohibit alternative taxi services or “jitney cabs” from operating in the state. Despite the narrow allowance for for-profit ridesharing activities other than those specified in the Ridesharing Arrangements Act, UberX, Lyft and Sidecar have been openly operating in the City of Chicago and the city’s affluent suburbs without abiding by any regulations.
Pretty harsh tone, no?
And think about this for a second: Illinois had to actually change a law to permit carpooling in 1983?
Sheesh.
* And, from the bill, this is a bit silly…
No person participating in a commercial ridesharing arrangement shall collect, and dispatchers shall not charge, any fare that is more than the highest per-mile rate charged by taxicabs within the unit of local government where the commercial ridesharing arrangement is conducted.
If people are willing to pay more and are told in advance of the rate, what’s the problem?
Why is everybody always so afraid of “the new”?
* This company is very aggressive and has fought on several fronts…
“What we did in Chicago, what we do in all these cities, is reach out to all of our users and say, take action–email your councilperson; email the mayor,” Kalanick says. “Uber riders are the most affluent, influential people in their cities. When we get to a critical mass, it becomes impossible to shut us down.”
Denver is a more recent test of the playbook. In January, Colorado’s Public Utilities Commission proposed rules under which the company could be classified as a motor carrier–meaning it would be treated like a taxi company. This issue is at the core of many of Uber’s regulatory challenges. That’s because, city by city and state by state, transportation companies of all sorts–cab, sedan, limo–are heavily regulated in terms of the insurance they carry, the structure of their fares, the background screening of their drivers, and the condition of their vehicles.
Uber neither owns vehicles nor employs drivers; it makes the technology that connects a user to a driver, one who is ostensibly already abiding by all these local regulations. As Kalanick often says, “They need to decide whether we are Orbitz or American Airlines.”
To be classified as a transportation company would amputate from Uber the exact things that make it an exceptionally good business: its ability to scale fast, control how a rider pays, and not be bogged down by owning vehicles.
The future is here. Let’s not blow it.
*** UPDATE *** From ride-sharing company Lyft…
After weeks of working diligently with Mayor Emanuel, we have made significant progress on a proposed city ordinance that prioritizes public safety while protecting innovation. HB 4075 is a backdoor attempt by state legislators to undermine all the work that’s already been done to reach a solution on this issue, and ultimately kill peer-to-peer transportation. HB 4075 would effectively shut down new transportation options in Illinois and eliminate consumer choice for residents who depend on safe and affordable transportation alternatives like Lyft. While safety is often brought up as a reason to apply an old regulatory model to an innovative transportation solution, the truth is that new technology provides an opportunity to increase safety above and beyond what has been done previously, which is why Lyft’s safety criteria are far more strict than what is required of taxis and limos. These proposed regulations have no bearing on public safety, and the motivation behind their development was planned behind closed doors. We hope that the House Committee will listen to its constituents who want more transportation options and vote against HB 4075.
posted by Rich Miller
Tuesday, Mar 25, 14 @ 12:14 pm
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Rich, no one is “afraid” of the new. These are profit-driven existing companies trying to rig the rules so that their profits are preserved. It’s no different than the restaurants rigging the rules to keep the food trucks out, the wine and the auto distributors rigging the rules to keep the internet sales out, etc. It’s why you have to laugh when Republicans say they’re for free market capitalism, then vote for bills to entrench existing companies.
Comment by Anonymous Tuesday, Mar 25, 14 @ 12:22 pm
I am all for the new, but as a woman, I would just like to know that the strange car I am stepping in to will not lead to something bad. I would hope some kind of licensure would provide me with that piece of mind. I against any kind of 15-minute wait; that is ridiculous.
Comment by 32nd Ward Roscoe Village Tuesday, Mar 25, 14 @ 12:25 pm
It’s going to be a great payday for lobbyists. A handful of players own most of the taxi medallions and they know how to throw money around. Uber is learning how to play, too.
Comment by wordslinger Tuesday, Mar 25, 14 @ 12:26 pm
If you want a good intro to Uber, NPR’s Planet Money had a podcast (Episode 516) back in February.
http://www.npr.org/blogs/money/2014/02/07/273060341/episode-516-why-paying-192-for-a-5-mile-car-ride-may-be-rational
Comment by Pot calling kettle Tuesday, Mar 25, 14 @ 12:27 pm
32nd ward,
Licensure is great. But when you get in a cab you hail on the street what record exists that 6 of ever got in it unless you pay with a credit card on the way out? With Uber before you even step in a car there is a record of the car, license number, name, drivers license of the driver, and the fact you entered the car and the time and location you did so in the hands of a third party. I guess that is much less secure than a random cab being hailed..
.
Comment by GV Tuesday, Mar 25, 14 @ 12:34 pm
Uber is a great service. I have used it in San Fran, Boston, etc when I travel. Its a shame that lots of cities (read DC Chicago, etc) want to quash it because of existing taxi companies…
as for surge pricing, its supply and demand. Dont buy it if you dont like it. On the flip side I have gotten an uber ride in like 10 minutes outside a restaurant a mile or two from downtown san fran, when I had been standing there and not seen a vacant cab in 20 minutes.
Its a shame. Most of the push back on Uber isn’t safety. its the Taxi companies companies keeping them out.
Comment by RonOglesby Tuesday, Mar 25, 14 @ 12:43 pm
“The future is here. Let’s not blow it.”
Come on, Rich. The purpose of Big Government and Big Business is to protect the status quo. They hate competition and fear innovation. That is one reason why Bruce Rauner is so despised (granted, there are other reasons).
Comment by Perry Noya Tuesday, Mar 25, 14 @ 12:46 pm
I tried Uber for a night on the town with Mrs. Sane and I enjoyed it. The only beef I have is the charge for “time” on top of the mileage and initial “pull” charge. I probably won’t use it again for that exact reason. But hey, if someone wants to pay $100 more for a $20.00 ride on New Year’s Eve, who am I to protest?
Comment by Knome Sane Tuesday, Mar 25, 14 @ 12:53 pm
While I like the idea behind Uber, Lyft, and others, I do not like how the companies are misleading in the insurance coverage they provide for their drivers. I looked into signing up for one of these services to make a few extra bucks on weekends, and in reading the finest of the fine print, realized the insurance they provide drivers is useless in many situations, especially when an accident is the fault of someone besides the driver. This also puts customers at risk for being injured and having to cover their own bills.
However, after listening to the debate on this today, this bill seems to go much too far. There were alarmist politics at work, mentioning one alleged assault by an Uber driver to show how dangerous these services can be, and making it seem like it’s somehow wrong for people to pay more during surge hours. People shouldn’t accept a higher rate if they don’t want to pay it and are always welcome to call or hail a taxi. I think there should be strict insurance requirements and driving record checks, but going as far as a chauffeur’s license is a bit much.
Comment by Bunson8r Tuesday, Mar 25, 14 @ 1:13 pm
@knome
“But hey, if someone wants to pay $100 more for a $20.00 ride on New Year’s Eve, who am I to protest? ”
I couldn’t find a cab a couple of years ago on new years in Chicago. And I dont mean 4 am I mean 12:30 leaving navy pier. Then walking 40 minutes back to our car near the restaurant. I would have paid 100 bucks to have avoided that.
Comment by RonOglesby Tuesday, Mar 25, 14 @ 1:19 pm
I think everybody who has ever lived or worked in Chicago has at least one “couldn’t find a cab” story. It’s a reason why this rideshare service thing has been so successful.
Comment by Rich Miller Tuesday, Mar 25, 14 @ 1:20 pm
GV: thanks for the education on having a record with Uber. I’ll have to give it a try. Thanks.
Comment by 32nd Ward Roscoe Village Tuesday, Mar 25, 14 @ 1:24 pm
The market found a solution with Uber. It’s great. Despite trying to regulate it to death, it’s still great. It may do to crazy taxi service what Fed Ex did to mail. It cost a little more, but everyone’s time has it’s own value.
Comment by A guy... Tuesday, Mar 25, 14 @ 2:09 pm
I’m looking forward to the self-driving Google cars - that’ll be a multi-industry killer from truckers to cabbies. Also will kill parking meters, airbags, possibly even some school buses.
Comment by thechampaignlife Tuesday, Mar 25, 14 @ 2:16 pm
I (and almost everyone I know) use Uber to get a regular taxi too. The fare is automatically deducted from my bank account with tip included, so I can just get out of a cab without the hassle of paying in cash. The drivers all have their pics and reviews on the Uber app and the GPS allows you to follow them on their way to you, or if you order a cab for someone else, follow them on their way home.
It works, people like it and willing to pay, leave it be.
Comment by Chicago Tuesday, Mar 25, 14 @ 2:59 pm
Call Nucky Thompson.
Comment by DuPage Tuesday, Mar 25, 14 @ 4:21 pm
I use Uber all the time in the City. It is usually cheaper than a cab by almost half, the drivers are friendly, and the cars are clean. I have pretty much stopped using regular taxis all together, such a great service especially in areas of the City where it’s hard to find a cab. The City as usual in an attempt to pay it’s bills it looking for a taste of the action, Uber and Lyft customers will have to pay some new City surcharge and the outrage will go away.
Comment by PW Worker Tuesday, Mar 25, 14 @ 7:18 pm
I use Uber not only for personal travel around the city but work travel out to the airport as well. It is cheaper, the drivers are so nice and the cars are clean. I am so glad that I don’t have to deal with rude drivers anymore. Any time I have ever had a problem (ex. smoke smell in the car) i have marked it in the rating after the ride and immediately received a response from customer service. They are really strict with expecting great service from the UberX drivers.
Comment by Anon Wednesday, Apr 9, 14 @ 3:36 pm