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Comment by sudonim | Hacker News Reader

As a business strategy, this kind of brinkmanship wouldn't make me sleep well at night.

Basically Uber goes into a city, hires drivers, outfits them with equipment and starts operations. And for what it's worth, the service is awesome.

By the time the city & existing cab and livery drivers notice and want to do something about it, they've look like the bad guys, are anti-competetive and they've turned the public against them.

It's clever, but I can't help but think they'll end up with a situation soon that doesn't end up working out in their favor.

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So Uber should pass out flyers to all competitors before it moves into a town?

As long as good ethics are used, it is called business competition and is generally a good thing. Do you think Uber is doing anything unethical? From the parent link, it appears not, and some of the rules Uber pointed out seem arbitrary and downright anti-competitive.

What really pisses me off is when people try and use legislation as a competitive advantage. That is unethical and it does make them look like your description: "By the time the city & existing cab and livery drivers notice and want to do something about it, they've look like the bad guys, are anti-competetive and they've turned the public against them."

No, I think you're missing my point.

Uber is doing this expecting the cities and existing players to get pissed off and try to stop them. And then they publicize the anti-competetive nature of it.

That's their strategy. Get local news to write about how the city & cabbies are trying to shut them down. It's great marketing.

And it benefits Uber not to talk to local government prior to launching as long as they follow the letter of the law.

This is a genius strategy. But if I were the CEO, it would cause me stress that all of my drivers in a given city might be forced to not work indefinitely because I'm not getting the OK first. Maybe that won't happen.

No other business has to ask the city if the city is planning on changing the laws to shut them down. Why do you expect Uber needs to do that? The fact that changes to laws are being proposed in order to shut Uber down proves that Uber is perfectly legal under the current laws, which means Uber is well within its rights to open up shop without asking permission. In fact, if Uber were public and I was a shareholder, I'd be pretty pissed-off if Uber actually asked for permission first, because that's just asking to be shut down.

Any sort of disruptive business will get lots of pushback and anticompetitive pressures from the existing incumbents. There's no reason why Uber needs to make it easier for someone else to block them from operating.

I think just like alecdibble, you're missing the point. sudonim isn't commenting on the ethics or legality of Uber's strategy, but putting him/herself in the Uber CEO's shoes and imagining the stress associated with executing on a strategy that depends on pissing powerful people off.

Again, it's a brilliant strategy, but might be a stressful experience if you're on Uber's side of the table.

Why should they be expected to "talk to local government" before starting? What other businesses have that expectation?

And what good could it possibly do? As far as I can tell, giving prior notice (though I think the idea that Uber could move in "stealthily" is kind of silly. They are hiring professional drivers from those cities, surely that hiring process attracts some attention.) could only harm them.

They did, in fact, talk to DC government several times before the first attempt to ban them (this is take 3):

http://techcrunch.com/2012/01/14/ubercommissioner/

You call it a marketing ploy. I see it simply as a reaction to anti-competitive behavior. What should Uber do? Not make a big deal about it? You really think they designed their business model just to bait cities to ban them so they can get a little "free press"? I think that if a business is trying to get another one shutdown using any other method than simply outperformance, that is a story that deserves to be on the news. It shows that there may be unethical or even illegal actions on the parts of legislators.

I might understand if the Taxi drivers were fighting back using better business practices-cheaper prices, better marketing, actually being able to guarantee taxis, an iphone app of their own, etc.

In some places, such as Manhattan, taxis actually are better than Uber. Because the traffic in Manhattan is so high that it usually takes less time to hail a taxi than to wait for your Uber to arrive.

But in DC they're not. They're fighting back purely by trying to pass legislation to prevent better companies from offering a superior service. In those cases, the old, unreliable, inconvenient taxi industry 100% deserves to fall.

Taxi Magic lets you request a licensed cab from an app. But licensed cabs aren't allowed to charge cheaper prices.

Uber actually lets you request a licensed cab from the app in NYC now too.

Although every time I've attempted to use it in the last 48 hours, they've all been full. I think it's because they're offering $25 in taxi credit (presumably to encourage taxi drivers to join up).

They're actually not legally allowed to take payment, so giving customers free credit is the only method they have to make the system usable.

Isn't that what a disruptive business is all about? You can't replace an old business model with entrenched interests by asking "please" as far as I know...

Part of the problem is that the "disruptive" businesses (by design) often don't spend time thinking about or solving the difficult problems in an area, especially by coming up with working solutions to the problems that caused people to call for regulation in the first place. Many regulations can probably be replaced with something better, but they were often initiated by real problems, and it's important to understand what those problems were, and figure out how to avoid them or sidestep them. Many "disruptive" businesses don't have the historical knowledge or skills to do so, and are hoping they can just close their eyes and ignore the problems, which tends to lead to short-term success, but medium-term reoccurrence of similar problems.

You can see that with AirBnB, which I think is based on a good idea, but also utterly fails to deal with many of the actually hard problems in the space—those that involve things other than operating a website. Real-world problems led to hotels being regulated in the first place, such as health/safety and noise problems, and so far AirBnB hasn't done much to convince me that they even understand the problems in that space, let alone how to address them.

I'm a big believer in the fallacy of Chesterton's fence, so I actually agree with what you're saying. My point is that disruptive businesses serve as the 'reset' button for these industries. The problems get ignored at first, then rediscovered, and finally re-solved in a (hopefully) better way. Eventually, the cycle comes full circle, and the disruptors become the disrupted.

It may not be the most efficient system in the world, and there are definitely casualties along the way, but it does seem to work more often than other approaches (at least that I'm aware of... would love to know about other approaches that have a similar/higher success ratio).

> As a business strategy, this kind of brinkmanship wouldn't make me sleep well at night.

Isn't this what we want thou? Why ask for permission when asking for forgiveness is so much better?

As long as the offering is neither unsafe and done with customer obsession in mind, it should be a win.

It's forced deregulation by circumventing the rules.

One interesting argument is that deregulation increases the supply of drivers hence making them inefficient. As they are inefficient the prices increase. Interesting POV.

However given that the American Medallion system doesn't seem to be working, there aren't enough drivers and a medallion is worth so much, screw that theory.

http://www.bloomberg.com/news/2011-08-31/ny-cab-medallions-w...

http://en.wikipedia.org/wiki/Taxicab#Regulation

Uber have hit a nice niche in America where they're taking advantage of over regulation. And the really odd thing is the cities saying Uber is A-OK, they're just idiots. They should deregulate instead of making a special Uber clause, it's bad government. But that's the way it works I guess, the ludicrousness of local politics around the world always makes me sad.

Note that their success isn't really anything about customer obsession, the only reason for their success is because of regulation. You wonder whether that's a happy accident or the entire private car thing is a cover and they're deviously cunning. All respect either way.

Speaking from a country without these sort of onerous regulation where a taxi is a trivial and cheap thing to get in minutes, any city getting rid of the medallions will put uber out of business practically over night.

The problem they'll face is that as grow they will probably put themselves out of business by encouraging mass deregulation, and then they'll be expensive with no value add. Their customer base will dwindle as new customers won't want to pay the premium for a chauffeured car and that'll be the end of it. Probably a good 5-10 years away yet though.

> rid of the medallions will put uber out of business practically over night.

Really?

When I get Uber, I get a great car-ride and an experience. The driver is dressed for business. I don't get:

* some cabbie's chatter * crappy radio * some odd smell that I can't describe * seats without holes

This is what I think of when I get uber. There's nothing to stop taxi's now to compete on the above things. I love Uber because of the professionalism of the drivers. The App that powers it is a nice-have.

It's funny -- except for the seats with holes, I count all of the things that you mention as downsides of traditional taxis among the things I love about traveling by taxi and other public transport through Asia, Africa, and yes, New York and DC.

Then, by all means, continue to use the taxi system.

I find it shameful that there is a defacto-forced monopoly. Another comment hand a link to DC's taxi system about illegal taxis. It seems strange to me that we have regulations on something that... isn't a limited resource.

I can understand enabling regulations for limited resources like electrics or water, but transportation? I'm... boggled to think what benefit comes from a regulated taxi system beyond customer safety? Sure, we should have a registered driver and some customer protection laws, but... a monopoly?

I like the idea of competition to deliver a diversity of goods to a diverse set of markets. I'm glad for Uber because it's changing the game and stirring the status-quo. Sure, it's more expensive, but's it raising the industry which will cut into the regular taxi's margins. I'm optimistic that taxi's average quality will improve to steal away some of Uber's customers.

Yes, who wouldn't count aspergillosis as an upside of taxis? If I don't have enough fever and lung bleeding, I'm just not happy.

It's not the fact that they are competing with Uber, it's how. If your way of dealing with a competing business is to pass laws that shut that business down to preserve a monopolistic system, instead of competing on price and quality of service, you are going to "look like the bad guys" no matter what. How would what the city and taxi drivers are doing look any better if they had done it a year ago? How could they have competed in a more reasonable way if they have started sooner?

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