Uber drops fares for SF Taxi strike | Hacker News Reader

Uber drops fares for SF Taxi strike

blog.uber.com

91 pointsBornInTheUSSR80 comments

It's bizarre that they're trying to spin this as pro-taxi-driver. I can't tell if they really believe taxi drivers would be happy with them for doing this, or if they're just cynically positioning themselves as "for the people" to erode public support for the union (or score PR points from public disdain for the union, I guess).

Their drivers aren't taxi drivers in the sense that they don't drive medallion cabs. Medallions in major cities are a scarce, and outrageously expensive on secondary markets. Uber's interests here are aligned with their drivers, not traditional hackney carriage drivers.

Edit: I'm a dope. See child.

Right, but the text of this blog post claims in multiple places that they're supporting traditional cab drivers somehow.

"Taxi drivers are going on strike, and while they circle City Hall in hopes of getting a better deal..."

"...making sure ordinary folks can get around the city while the taxi drivers strike to get a fair deal."

"Furthermore, we want to put a word of support out there to the hard working taxi drivers in San Francisco..."

As far as I can tell, the reality is that they're deliberately undercutting the strike and profiting by it. Which may or may not be justifiable (I don't know anything about the strike), but it's certainly not supportive.

I think they mean "better deal" to be taken ironically by the readers, who likely have little sympathy for cab drivers. Unlike most public unions who are paid by taxes, the electorate is directly and visibly affected by taxi price hikes. So public support for them is naturally much lower than the unions the rich people pay for. Probably anyone reading this is laughing along. They are thinking that fifty cents per thousand feet driven is more than a fair fare (that is the current rate for SF cabs).

Edit: it appears the strike is more about the credit card fees companies charge the cabbies, digital tracking of the cabs, tvs in the back seats which show adverts to passengers, and various other anti-consumer and anti-driver practices. In this case, I can see that public support might be a little higher. I don't like either cabbies or cab companies, but if I had to pick which I like least, it's obviously the companies. In this case, the fair deal bit might be meant unironically.

This strike is not intended to inconvenience the cab customers (voters!).

They intend to prevent vehicular access to City Hall. A few percent of the cabs will be involved in shutting down the streets at City Hall and if Uber takes up enough slack so the customers aren't inconvenienced that could be helping the cab industry. They don't want pissed off voters.

(Personally, it seems ill advised. The core seems to be the cab companies keeping a 5% transaction fee on credit card processing, which isn't far from the cost. Some cabbies also don't want GPS trackers on the company's cars or LCDs playing advertisements to their riders.)

They're supporting the drivers, not the medallion owners, who are the ones renting the cabs to drivers 6 days a week at an outrageous markup and preventing the city issuing any new medallions. The average taxi driver, who does not own a medallion, gets screwed by the current arrangement and would be far better off working for Uber IMO.

> not the medallion owners, who are the ones renting the cabs to drivers 6 days a week at an outrageous markup and preventing the city issuing any new medallions.

Umm, no. The medallion owners are NOT preventing the city from issuing new medallions. Yes, the medallion owners have consistently convinced the relevant authorities to not issue new medallions, but the responsibility for that choice rests with said authorities, not the current medallion owner.

If you can't figure out who is responsibile, you can't fix things....

Anamax, you can't say the government exists in a vacuum when business is often buying the votes in the regulatory body. I do not like the way city hall is run either, but it's a two-way street.

> you can't say the government exists in a vacuum

I'm not saying that govt exists in a vacuum. I'm saying who is responsible for what it does.

> I do not like the way city hall is run either, but it's a two-way street.

No, it's not. The way City Hall works in SF is entirely the responsibility of the voters of SF. As long as they insist on setting it up so it can be bought off, it will be, and that's their fault.

No, it isn't the fault of the people buying. Not one little bit.

Yes it is partly their fault, because they are the ones corrupting the political process at the electoral level. There are so many different factors that go into electing people at city hall, and the public is no more a monolithic entity than the government. Rather, it includes multiple groups some of whose interests are aligned on some issues and conflict on others. The electorate can't, and shouldn't, build the entire election around the taxi issue; that would be irrational. But it's not obvious what the most effective leverage point for change is; this is a basic lesson of public choice theory.

The people buying influence (and today, holding the public interest hostage by blockading city hall) are also a part of the problem. You can't sensibly object to rent-seeking and then give the rent-seekers a free pass when they kick back some of their extracted rents in the form of political lobbying.

> You can't sensibly object to rent-seeking and then give the rent-seekers a free pass when they kick back some of their extracted rents in the form of political lobbying.

I'm not objecting to rent-seeking; that would be like objecting to gravity.

I'm objecting to folks who set up opportunities for rent-seeking and then complain when it happens. I'm blaming folks who set up said opportunities for the rent-seeking that occurs.

Once again, the electorate is not monolithic, but highly fragmented. To pretend otherwise is to endorse the divide-and-conquer approach of professional lobbyists. Whenever someone proposes reforms it's billed as an attack on freedom, whenever someone complains about the absence of reforms, it's billed as the electorate's own silly fault. This has been pointed out to you before, and you're an intelligent person, so I think it's rather disingenuous of you to keep trotting out the naive form of the argument.

http://en.wikipedia.org/wiki/Public_choice_theory

> Once again, the electorate is not monolithic, but highly fragmented.

That's irrelevant to my point.

I'm not making a public choice theory argument. Yes, public choice theory discusses rent-seeking, but it isn't the only basis for doing so.

It's entirely relevant; your whole argument on the notion of unitary agency. Public choice theory explains why this line of reasoning is fundamentally flawed. If you don't understand this then all I can suggest is that you spend some time thinking it over, because you have certainly not articulated a coherent argument in defense of your position and I grow tired of explaining the obvious.

> It's entirely relevant; your whole argument on the notion of unitary agency.

No, it doesn't, even if your argument requires that it does.

Yes, some folks support structures that make rent-seeking easy while others oppose. In both groups, you have folks who want govt to provide a particular good and some folks opposed. All of thse are still responsible for the resulting rent-seeking, even though clearly they're not "unitary".

> I grow tired of explaining the obvious.

You haven't explained anything. You've dropped a buzz-word that is only tangentially related and made some false assumptions.

I like public choice theory, but it isn't a complete explanation of everything in govt. In particular, while it talks about treating govt as an economic problem, it makes some assumptions about govt that aren't necessary.

So the people who are opposed to rent-seeking are just as responsible for the phenomenon as the people who are supportive of it, even if the former have voted against it. Riiiiight.

There are lots of ways to oppose rent-seeking. One is to oppose situations where it is inevitable. The other is to support measures "intended" to limit it. Since the latter don't work, said support is meaningless.

And yes, an unsuccessful opposition bears some responsibility.

Surely you're not arguing that all responsiblity is the same....

Agreed. It's a great play either way in my opinion. I have a feeling Uber is going to get a lot of new customers tomorrow.

They're cynically acting as vultures, taking taxi business and eroding the leverage the taxi drivers get by striking. They know what they're doing. Hopefully it backfires on them.

How exactly is this discount eroding leverage?

Strikes create leverage by withholding a service. A discount that put their service on par with taxis in effect provides replacement taxi service.

So what the taxi companies no longer have a pressure to restore their service? It does not compute...

"How exactly is this discount eroding leverage?" ... "the taxi companies no longer have a pressure to restore their service".

The pressure to restore the service would also get directed towards those they're bargaining with. That's part of how strikes work.

I left this comment at Uber:

What drives people crazy is insincerity . Why not to call spades, spades? Uber is in the business, an innovative and disrupting and customer-centric business. Your business is good, as it was carved by hard work of Uber team, and your livelihood and success depends on it.

So, why not to tell your customers that you are there for them, when they need you. You don't have to mention "we love taxi, unions, taxes and strikes" BS, or you can stand for your business, and say "f%$# taxi drivers, look at us, we are better, and here's our discount!"

Good luck with Uber, and, please, be sincere.

I'm not sure I understand what is cynical about it. The union represents a small number of taxi drivers and tries to improve their economic position at the expense of that of everybody else in the city. Moreover, basic price theory shows that the union is likely to hurt "the people" (i.e. everybody else) more than it helps the drivers, because they don't just increase the fare (which would be a pure transfer from customers to providers -- fair or not, it's not a net loss) but they also decrease the number of rides. If it weren't for people imagining that their own economic well-being was somehow wound up with the taxicab union, they'd be better off, and thus eroding public support for the taxicab union is a public service.

Sincerely, your friendly neighborhood economist.

I definitely understand the cabbies' concerns about prices, but this is huge for Uber. As the cabbies seek to shorten the gap between taxi prices and Uber prices and shut down for an entire day, Uber swoops in with a huge customer acquisition push. This won't be the death of the cabs, but I'll love to see how Uber makes out on the deal.

I hope they're advertising it enough that people who have never heard of Uber actually use them.

That's an excellent point. I don't know what kind of advertising Uber is actually using, but my Twitter anecdata says that there's already starting to be a nice bit of viral push to go with it. I really hope it'll be significant, because I absolutely love Uber and I'm planning on fully supporting them tomorrow.

Wouldn't it make more sense for Uber's supporters to avoid using them tomorrow, thus freeing up more of their fleet for potential new converts?

I hope their advertising doesn't attract more negative attention from the local government.

There have been several times recently where I was unable to use Uber because there were no Ubercabs available. I wonder if the demand will be too much for the system to handle... though presumably they've got all hands on deck tomorrow.

If uber wants to make sure everyone who wants a taxi can get one, they should raise prices, otherwise they're ensuring an uber shortage.

simple supply/demand economics.

Um... you're presuming a fixed supply of uber cars. This simply is not true, especially in the medium/long term.

Raising prices amidst extreme demand is a good way to maximize profit on the supply you do have, but expanding your supply to fulfill demand is almost certainly the better course in the long run.

Um, seriously?

Uber is dropping their fares only for the duration of the taxi strike, ostensibly to make sure "ordinary folks can get around the city while the taxi drivers strike to get a fair deal."

During the strike (viz., the 'short term') there will likely be a shortage of cars, including uber cars. Lowering their prices will only make it harder to get an uber car during the strike.

It looks like we're arguing about different things.

Someone brought up that Uber cars are already hard to book (strike or no strike), and my point was that instead of raising prices to maximize profit, one would be much better served to expand the fleet instead.

In any case, even in the context of the strike, presumably Uber has longer-term plans than just tomorrow - raising their prices, while following the laws of supply/demand, is going to smack of gouging, and will naturally do far more damage in the long run than whatever extra profit they can derive.

I think you are right. But that does not mean that this isn't in Uber's interest. Normally, it's not in any business's interest to lower prices to the point where you don't have enough capacity. That would be leaving money by the curbside that you can readily grab, and it would not even be particularly useful for your customers, because your product still needs to be allocated and customers end up spending time and effort to get their slice if they cannot simply buy it. But that reasoning assumes that everybody who might like your product already knows about it. And that simply isn't true for Uber, which is why they need all the marketing they can get; and what better marketing than this. The fact that they are rubbing up against a popular-in-SF (if batty) trade unionist ideology only makes it better, because that will mean more newspaper coverage.

I know I'll never use their services now.

not sure if promoting this to existing customers was a good idea for uber. They sent me the marketing email. I'm a happy customer. But i didn't realize their prices were 2X cab prices. Now that is stuck in my head every time I call an uber

They are pretty open about the fact most fares are around 2x that of a normal taxi.

no offense, but how is it that you both did not realize that and care? didn't you first check the price?

That was my thought as well. Bay Area cabs are disgustingly overpriced already, especially with that slimy 50% surcharge they include if you go to, e.g. Palo Alto.

Anything that destroys the medallion mafia I support, however. Cabs aren't expensive because cabbies are living it up, but because of a class of parasitic rent-seekers who really need to be washed into the ocean.

That's a downright twisted use of the word "solidarity".

Yeah, if they're going to be scabs, and undermine the leverage that striking creates, they should at least be up front about it.

'Scabs'? The taxi firms have bent over backward to keep competition out of the market, and now you're saying they should get solidarity because they want to hold consumers hostage to their monopolistic demands? Consumers who already pay more for their cabs than in any other US city?

Thank you. "Scab" is inappropriate because a scab is someone who works for the company that the strike is against.

Uber is not undermining the leverage the strike is creating. The cab companies are still losing money from not operating. It's just that now people who needed cabs to get around aren't as screwed as they would be if no driving services were operating.

The taxi strike is described at http://www.sfgate.com/cgi-bin/blogs/cityinsider/detail?entry...

"From noon to 2 p.m. on Tuesday, taxi drivers are being urged to park their cabs to protest the practice of charging drivers 5 percent of every credit card transaction, the consideration of an electronic tracking system and an idea to put more taxis on the street."

Heh, they're opposing more cabs on the street? Well there's a surefire way to endear your cause to the people of the city...

The SF taxi system is highly corrupt. I hope the taxi companies go out of business and their cronies in SF city government get fired.

I'm not going to comment on the taxi regulation system in SF because its pretty ugly. But the drivers have to drive for about 15-20 years to win a medallion. SF is changing this process and wants to start selling medallions for about $250,000. If you're at the top of the list (ie you've been waiting 15 years) you get first chance at buying a medallion but you're SOL if you don't have the 12K deposit.

If I were someone near the top of the list but hadn't been saving up I'd be pretty pissed too.

So why are Uber fares higher than taxis on a typical day?

They get limo drivers to pick you up in a lincoln town car.

I've been the lucky rider of a Mercedes AMG the three times I've used Uber in SOMA.

I've also been picked up in that S550 in SoMa. Technically, it's not an AMG motor though, only the trim is AMG :)

A few reasons.

Convenience:

* There's a very easy-to-use app to request a driver that shows the locations of nearby cars and an estimate on how long it'll take for a car to arrive. No need to try and flag down a cab or call a company.

* Payment is done via stored credit card info, so no need to worry about paying at the end of the ride. No need to worry about tip, either.

Comfort:

* The town car is far more comfortable than a normal taxi. Nice seats, ample leg room (and I'm a large guy), no ads, actually useful air conditioning.

* There are magazines to read, if that's your thing. Some of the cars seem to be wifi equipped (one of my drivers has told me that that car had wifi, at least).

Experience

* They definitely ride the line between limo and taxi, to the point where I can't help but laugh. The driver even hops out of the car to open the door for you!

Really, if you're in SF, it's worth checking out Uber at least once.

> The driver even hops out of the car to open the door for you!

I loved this the last time I used uber. The driver went as far as to hold out his arm for me to lean on while I was getting into the car, which was a great help because I was having unpredictable dizzy spells all morning long. Then he drove like a maniac so I could get to SFO in time to catch my flight, and he deposited my luggage next to curbside baggage check. Taxi drivers generally don't go that far, they'll just haul your bags out and leave them on the road in my experience :(

Not to mention I had over two dozen taxis, most of them empty, ignore me as I spent a futile 15 minutes to hail a cab on Market Street before I gave up and used uber. Not my problem if they don't want $50, and uber was only $65 in comparison..

They've been known to fetch water and provide chocolates.

The drivers I've come across tend to have water bottles already set out, as well as snacks, mints, gum, Starburst and more sitting around. That's just a side perk :)

i wondered if this was as gray moral area, but I couldn't find a single reason why this hurts traditional cabbies.

In fact, the fact that uber has the cabbies' back in terms of serving the city, makes it a win-win situation for everyone involved except the target of the cabbies' strike cries.

If you are a cab driver and you're upset by this marketing gimmick, holler.

Why would you drop prices when there is no competition? Makes no sense. Basic supply and demand.

There is competition. People might take buses, or trollies, or BART. They could also walk, carpool or hitchhike.

Customer acquisition and advertisement.

I hadn't heard of this business until now (admittedly I am not in the correct location). Now I have.

Even if you're not in the correct location, you might be some time. I've got a friend who's going to be in SF from out of state tomorrow and he's decided to check out Uber because of this.

Gouging may be good for a day (assuming there weren't other good transport options, which is simply untrue in SF), but it sucks as an acquisition method.

My experience with Uber was essentially: (1) "Hey, it sounds great, but that's a bit pricey. It can't really be worth it, can it?" (2) Decided to take someone to dinner via Uber because it was more impressive than a cab. (3) "Hey, this is actually pretty cool and totally worth it." (4) I'm now a repeat customer, even when traveling alone.

In my eyes, the key is that they need to find a step (2) for a more general case. Having a day where there are no cabs might be a small push, but having a day where there are no cabs and Uber is the price you would have paid anyway is absolutely killer.

Short answer: Long-term thinking is better for them than short-term thinking.

I was going to post nearly the same thing. It may upset the strikers, but it's a brilliant business move by Uber to snag some customers that may not have given it a shot otherwise, and turn them into repeat users.

It's not a long term market pricing strategy. It's a PR maneuver, and it's a damn smart one. There will be a ton of interest in this story, especially for the 'victims' of the strike - the actual customers. Uber is using this situation to gain awareness in the minds of their target market.

Bloody scabs! At a time when unions worldwide need solidarity and they're undercutting them. Nice one. I guess this is the lovely caring capitalism we've been hearing about.

So - are people just supposed to not leave their house because taxi drivers decide to not work on a given day?

This is San Francisco. Public transit sucks, and owning a car sucks(though less than public transit). Many people rely on taxis for their livelihood and they will be screwed over if they can't go places tomorrow, regardless of the reason why.

This is the very POINT of strikes to show that you matter, and that people shouldn't just take you for granted.

And Uber is showing that the passengers matter, and that the cabbies shouldn't take them for granted.

It's just two more moves in the endless battle for power and resources.

Except the only reason taxis can "show that they matter" by shutting down is because they've been given a monopoly from government (via medallion system).

The result of this monopoly, at least in San Francisco, is a shortage of cabs, poor customer service from cabs and high prices.

All this strike proves is that no matter how good they have it, they'll always ask for more.

The fact that cab drivers also managed to form a union means nothing other than they're smart because they can leverage that to get a good deal for themselves (at the expense of every other person living in San Francisco). Forming a union doesn't suddenly entitle them to anything.

Uber is a long due competition to cabs. It improves the lives of people living in San Francisco. If cabs can't compete, then they deserve to lose and Uber has every right to compete with them.

That is the point of capitalism: ability to compete. Taxis don't deserve special treatment. Neither does Uber, for that matter.

There's a difference between being anti-union, and anti-medallion. I like taxi drivers. It's not their fault they have to pay hundreds of thousands for a medallion, and work with a lot of overly strict rules.

AFAIK, these strict rules don't stop taxis from screwing over tourists, and occasionally assaulting customers. I'm pretty sure an Uber system would, as the bad eggs would be tracked down a lot easier.

If unions want to protest unsafe cars, or 14 hour shifts, or they want the right to refuse service to unruly customers, that's fine. It's not a simple matter of supply and demand. But unions shouldn't be locking other workers out.

I'm pretty sure they are actively campaigning against increasing the number of medallions, so yes... they are to blame for making it a scarce resource and therefore worth hundreds of thousands of dollars.

> But unions shouldn't be locking other workers out.

Locking out other workers is pretty much an essential union function.

Disagree - name three unions that don't.

You make it sound like taxi drivers are doing charity work. They hold hourly jobs just like 80% of San Francisco. Of course taxis matter, that's why they exist.

The point is to show the cab companies the cab drivers matter. The customers just get hurt in the process.

Weren't these the same taxicab drivers that were complaining that, even though Uber is a limousine service, they were encroaching on the taxicab market? Wasn't there a threat of jail time and fines from the city of San Francisco for every customer Uber picks up?

Fuck the unions. They've half bankrupted the city already and are well on their way to completing the job. Uber does not owe the medallion owners a damn thing, and neither do the people of SF. They've made out like bandits for years by keeping the market deliberately undersupplied and inflating prices. Now we have the most expensive cabs in the US and you can't hail one outside of downtown for love or money. It's hard to get cab in the downtown area. I have no sympathy.

Uber does not owe the medallion owners a damn thing, and neither do the people of SF.

There is something owed the medallion scumbags, but it hasn't been in fashion since Paris 1793.

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