I don't think being a startup should grant you immunity from the law or absolve the requirement to follow local regulations and licensing statutes. Lawyers, doctors, electricians they all have to follow the law too.
Why is Uber a special case?
Why is Uber a special case?
(i) The cities in which Uber operates usually have dysfunctional cab systems. San Francisco, for instance, is notoriously underserved.
(ii) Much of the regulatory overhead in running a cab/livery service really is an artifact of top-down market controls from the turn of the last century that have been exploited to lock the market to a privileged few operators.
Most of the Uber drivers use iPhones, which (especially the older models) have notoriously bad GPS. If it skips off to the wrong street for a few blocks and adds 1/4 mile to my trip, and I don't notice by staring at his screen, how would I know? Normally, I trust the cab company because that little meter is tracked, registered, and supposedly regularly audited.
But why is Uber even metering the trip distance? If they incorporated the destination address to the booking, they could calculate an exact price based on time of day/projected congestion/etc. Then they'd have even better consumer protection than a taxi cab (where the driver still has an incentive to go a more expensive route).
Uber doesn't really even publish a rate schedule for how much you pay, and it doesn't have stable prices. They go up during periods of high demand, for example. So it's unclear why you'd object to the GPS, except to mess with them; you don't know what you're going to pay in any case.
The fundamental problem is "you don't know what you're going to pay", and I'm not surprised they're being called out for that under consumer protection laws. The point of taxi regulation is to prevent people from being cheated on the spot. Uber is in a position to do even better than what regulations are capable of, with market pricing, and they should aim for that.
http://goperu.about.com/od/gettingaroundperu/qt/Taxis-In-Per...
"Taxi Prices in Peru
Peruvian taxis don't run on meters, so you need to arrange a price with the driver before accepting the ride. Taxi drivers usually try to overcharge, especially when confronted by a foreign tourist. If you have no idea how much the fare should be, try reducing the driver's price by a small amount (if the driver says 12 nuevos soles, offer 10). It's always a good idea to ask someone beforehand, such as a hotel receptionist, how much a taxi to your destination should cost."
I see no reason for Uber to be exempt from the same regulations other services must abide by.
Its a chicken and egg problem. There has to be igniting situation to get change to happen and a company can not operate 100% legally without the change occuring. As a result its sometimes in the company's best interest to ignite the fire themselves and eat any blow back.
Given the New Years Eve pricing debacle, I'm glad regulation is being put in place. Taxi's are underserved and a horrible experience, but their pricing is both consistent and 100% transparent during and after the ride. Uber's pricing is a confusing mess. Time, demand, distance, and vehicle are all factors and you're only aware of the price after the ride.
For any well developed market, radical innovations in productivity can almost assuredly be illegal. Standards of service must be set on a national level, not a mico one.
Imagine if every time you went to a different city, Uber's user experience changed drastically. You never knew what Uber would cost. Perhaps sometimes you had to do things that completely broke Uber's experience. Imagine if Boston's Uber app was just a button that said "call dispatcher" and then you had to pay cash at the end of the trip. Why bother?
Uber is not challenging the right of a municipality to issue rules or regulations. What they are challenging is an antiquated system of bureaucracy, for a specific market, which wastes both a city's budget and customer's time.
I think we will see the Uber strategy applied to a very wide rank of micro-regulated markets. And its going to work. The cities that "win" will lose, big time.
(iii) It's unclear Uber is actually in violation of the law. Boston may have sent a C&D, but this hasn't been tried in court yet and I would not be surprised if Uber was to win.
Should startups be allowed to sell Marijuana? Of course not, either everyone should, or nobody should. Level playing fields and all that.
The original Ubercab model (allow anybody to sign up as a driver without any vetting of anything) was absolutely atrocious. The new one is better, but uber drivers benefit from customers who feel like the product is as safe as the regulated product without actually doing things like ensuring that the cars are inspected.
That said, I pretty much lost respect for Uber when they pretended that expressing high-demand rates as a multiple was clear. Nobody with any UX experience would've agreed with them that it was clear... but they all would've agreed that it's a great way to camoflague massively inflated rates.
What about Lyft? Isn't that essentially what they're doing?
Does Lyft let random people sign up to work as gypsy cab drivers? If so, I think that's insane.