Uber Stockholm throw a PR-tantrum when refused unfair advantages
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Sweden is fairly big on consumer protection, and price comparisons is generally a mandatory part of that (all groceries are mandated to list price per weight/volume/appropriate other unit so you can find out, say, which bag of rice is cheapest per kg, for instance - the same goes for taxi services and price per km). That they're being asked to follow those rules is hardly government bullying - in the eyes of most everyone here that definitely counts as "consumer protection".
It doesn't get better when they start spouting complete lies - the gibberish about certain unmarked taxi like services being exclusive to "royal families or prominent business leaders". Not related to reality at all.
To be honest, I'd never heard of this story before I saw it here. It certainly hasn't been covered by mainstream press. I don't live in Stockholm though, so it might be bigger there.
In America we have a lot of laws governing the hotel industry. For the most part I think they are in place to protect the millions of Americans and tourists who stay in hotels here every year. However, if I understand correctly, some of those laws have made it difficult for new businesses to enter the market.
That said - sorry for going on an off topic tangent - I think that over all the consumer protection laws have public support, and the possible downsides they come with w/r to establishing new actors in a market are outweighed by the benefits they have to consumer. But nothing is without its cost, you say.
I went to school for finance and in my experience the social good of business decisions is rarely considered. What is considered is: Will this make a profit? Are we working within the law? I am fairly certain that, at least on Wall Street, businesses would totally run amok without regulation.
I was wondering about that too, but instead of declaring Uber to be lying here on HN, I went and looked for more information. What I found, was a news article that actually went and asked the Swedish Transport Agency for a comment[1].
STA's answer was that STA has had no direct contact with Uber, but had had contact with two companies that drive cars for Uber. Those two companies had asked for an exception from having an taximeter in the car (Swedish law requires one otherwise). STA denied the request, stating that to get an exception, one needs to follow the regulations of 1998, which states that exceptions are only allowed in exceptional cases, for instance when driving for royal families or prominent business leaders.
So, Uber is ... stretching the truth. Their claim is not a complete fabrication, but neither did they tell the whole story. I tend to put cases like this under the "company statement" category.
[1]: http://feber.se/webb/art/270558/transportstyrelsen_vill_kick...
- Permits exist for private car hire services in Sweden. The STA has issued them before.
- However these are currently reserved for circumstances eg members of royal families or prominent business leaders.
It isn't a stretch of the truth to say the STA are denying such permits to Uber, and that regular citizens should have the same services available to them as these other groups.
So, yes, if they're insisting on using the "hybrid" payment model, they need a permit which is restricted to extraordinary events (essentially events where the customer won't care about the price, no matter how outrageous it is). In hindsight, I agree that calling it a lie is incorrect, I should have phrased it better. It does not, however, make me more forgiving w/r to their press release, as it's deliberately written as a factually lacking, misleading appeal to emotion.
That's actually really interesting and I had no idea that was the case. In a supermarket, would such a list be in the isle next to the food? Or would it just be available from management or something like that?
Usually, they just tell you on the shelf's price tag:
Bigger Font: 1.50€/£ Smaller Font: 0.75€/p per 100g/100ml etc.
That way, you can see that sometimes it makes sense to buy 2x 400ml ketchup (just as an example where I had it recently) instead of 1x 800ml, simply because 2x 400ml is actually cheaper.
> That way, you can see that sometimes it makes sense to buy 2x 400ml ketchup (just as an example where I had it recently) instead of 1x 800ml, simply because 2x 400ml is actually cheaper.
That applies to plenty of dastardly stuff too e.g. the big 3-5kg pots of Nutella you see around Christmas? The unit price is often twice that of the standard 750g pot.
Here
[1] http://2.bp.blogspot.com/-i80uxvW1SnA/Tp3zocKih4I/AAAAAAAAAJ...
[2] http://www.freshfrom77.com/wp-content/uploads/tesco-multi-bu...
You have a price per unit. Say a 0.5l bottle of beer costs 0.78 EUR and then you have the price per 100ml or 1l below it (1l = 1.56 EUR). It's marginally useful if you compare the price of rice to the price of Coca Cola but it's really useful if you want to know what's cheaper: Buying a package of 6 1.5l bottles of Coke or buying a crate with 18 0.33l bottles.
I'm a sucker for saving pennies ;)
Item A: $3, $6/pound
Item B: $4, $0.30/oz
Brand A, Orange Juice, 1L. 19.90 (Price per Litre: 19.90) Brand B, Orange Juice, 2L. 30.00 (Price per Litre: 15.00)
This is simply to spare the consumer of doing the math themselves, which can turn out to be quite tricky in some cases (although not in my example:)
Update: According to NIST, 21 of the 54 US states and territories have some form of unit pricing law.
It's on the price tag/label, there's the product price and the unit price (except bulk which only have unit prices).
Only if you swim between the isles. I believe you meant aisles.
The STA’s explanation for this is that the permit that is required should only be given to companies that drive members of royal families or prominent business leaders.
Lobbying isn't really a thing here, and is actually considered to be corruption. Whenever that sort of thing happens (which is pretty rare), the press is having a field day.
As an american, I would agree wholeheartedly that lobbying is most definitely corruption.
> Whenever that sort of thing happens (which is pretty rare), the press is having a field day.
Oh how I wish the US news would report something like this. Just once. But our media is in the government's pocket. Or, rather, big business' pocket, and the government in theirs. I guess that means I'm wearing a "tin-foil hat". Although I can't see it. Must be one of those government sponsored, brain-altering, invisible tin-foil hats. Bastards!
EDIT: Also, I've seriously considered moving to Sweden or one of the other Nordic (as we call them; don't know if it's the same over there) countries. Are Swedish people generally welcoming to newcomers or not? (And, yes, I know I'm generalizing; sorry.)
Generally, I think you will feel welcome. Swedes can be a bit reserved and tough to get to know, though. We don't talk with strangers on the bus, etc. Once you get to know us, though, we tend to be genuinely friendly. (Or so I'm told.)
There is some xenophobia, but the prejudice is mostly about arabs. I think if you are a caucasian/black american you will have a blast.
Really, the thing that scares me the most about moving somewhere like sweden is learning the langage ;) I don't really have a gift for (human) languages, and swedish seems pretty tough already.
There are courses in swedish offered to all immigrants. My wife did it in 4 months. Meanwhile, you won't have a problem getting around with english only. Virtually all swedes speak english, and most do it well.
This kind of thing might fly in the US, but in most of Western Europe we take a slightly more nuanced view to the role of government regulation.
Doesn't mean there isn't anything worth disrupting, hell no (somebody please disrupt the Amsterdam taxi market), but in cultures where simply sitting down and figuring out how to remove the obstacles is the custom, hyperbolic scream fests by an American company is not going to work.
Especially not an American company that thinks it's a good idea to conquer Europe with a name like "Uber"...
Both the company name and their PR strategy scream "culturally insensitive American douchebags".
Everything else is PR.
...
> we take a slightly more nuanced view
Yeah, sure sounds like it.
What did he write that conflicts with this?
Dialogue that doesn't /start/ nuanced rarely becomes so half way through...
This isn't to say that there isn't a twinge of tinfoil hattery going on, or to say that the same tactic is appropriate here, but the fact is that they've had tremendous success asking their users to tell the authorities that they're good guys in the past - they had success in this endeavor here, for that matter. The fact that there is a blog post calling them out doesn't really seem to have had a strong impact on the support that their users are giving them.
Moreover, this blog post smacks of tinfoil hattery - is the suggestion that, by not signaling itself as a taxi, Uber is attempting to confuse users? To my knowledge, they're not picking people up on the street - only people who have signed up for an account and are well aware of the price differences. It seems likely that they're less interested in removing the need for the meter and more interested in removing the need for external signals that the car is fared similarly to a taxi - which is, after all, 50% of what they're offering. So a yellow license plate, sign, and fare sticker might have the larger impact in their eyes.
Based on that, do you not think that it's reasonable that, in an, "unregulated," market, they should be allowed to charge people who have jumped through the hoops to actually get into an Uber car, with all of the fare information shoved in their faces a number of times, however they have agreed upon with their customers?
I'm playing devil's advocate here, but let's please be intellectually honest.
Also a sign isn't required and the yellow plate gives you advantages in traffic (bus lanes etc.), but they'll probably want an exemption from that too?
We're sort of arguing past eachother on the other point. If we agree that Uber isn't out to rip people off and their customers like the way that they do business, why should they need to change? If you acknowledge that the changes required are superficial, why are they required?
And based on the way in which Uber is marketed, you're either completely unfamiliar with the service or you're being more than a little disingenuous when you suggest that a yellow license plate wouldn't affect their business. Part of what they offer is the appearance at your destination of having been delivered by a private driver.
Honest question: why would anyone care about that at all?
If they're superficial, why can't Uber just play ball? I can't disconnect my electricity meter and install a more accurate one of my choosing, even if that leads to me paying more in utilities. Some things are standard just because it makes it easier for people to tell that nobody's breaking the rules.
I might not know their marketing, but you don't know the market in Stockholm so maybe you should be a little less cocky about it.
Sometimes regulation gets in the way of innovation, but this time it seems like regulation only gets in the way because they can't be bothered to innovate. Getting their app certified as a meter would be a nice precedent for more innovation.
1) It's just the way that things are done. Everyone else plays by these rules, so deal with it.
2) Uber is not doing enough to inform their customers about their pricing structure.
I assert that the first argument is extremely weak as a position. If you can't defend the rules themselves, then don't bother. The fact that exemptions are granted indicates that it's understood that organizations should be able to bend these rules if they meet certain requirements. What are those requirements? Why does Uber not meet those requirements? Why are those requirements as they are? Do they not meet the spirit of those requirements?
As for number 2, look, pricing is all over everything. You can talk about ways in which they could technically comply, but I think you're sort of assuming ignorance on the part of the consumers that doesn't exist. You can go to a website, or pull out your phone, and see a price.
Uber X and Uber Taxi are just Priuses and regular taxis.
And in the case of Uber Taxi, they comply with all legal requirements for a Taxi service.
It just so happens that they're entering a regulated market, and some observers will go full tea-party upon hearing things like "we have extra regulation applying to taxi services due to some experiences we've had over the last hundred years."
Better dispatch over the internet doesn't change everything.
This email reminds me of talking to some idiot soda lobbyist at a cocktail party in 2009, telling me she doesn't understand why her boss told her equating taxes on soda with fascism was a bad idea.
It's the company itself which did that, not "observers".
The problem in many of these situations is the nebulous definition of "taxi", "towncar", and other conveyances, along with the protectionistic (for self-preservation) industry. If the definitions had anything to do with consumer safety/protection, I'd be opposing Uber as well.
Are there any cities in the US and abroad who have handled the Uber problem by updating their regulations in a more harmonious manner? I'm aware of those who have tried to ban Uber's loopholes outright, but I'm curious how any may have integrated these services while eliminating perceived exploitative aspects of their business model.
I'm surprised (or more precisely, dismayed) that a comment with such comically excessive language received so many upvotes. This is how a forum turns into a self-caricature.
That may be true, you certainly would know better than most here, but the press about them and statements from Mr. Kalanick really don't give that impression.
Hyperbolic, you say?
"tea-party style paranoid right-wing anti big evil government organization" "culturally insensitive American douchebags"
Also, thanks US government. Because of you, this is what the rest of the world thinks of us.
http://pandodaily.com/2012/10/31/assholes-shrug/
http://pandodaily.com/2012/10/17/whos-the-real-bully-uber-or... [written by Nathaniel]
http://pandodaily.com/2012/10/24/travis-shrugged/
http://pandodaily.com/2012/11/02/a-final-word-on-uber-and-th...
http://pandodaily.com/2012/12/04/shock-uber-scores-victory-a...
http://pandodaily.com/2012/12/13/what-a-difference-six-month...
Price "gouging" is actually a public service, it LITERALLY SAVES LIVES. It ensures that needed materials find their way to the people that need them the most. If I'm reasonably well stocked on batteries, and a business isn't allowed to raise prices during a hurricane, I have no dis-incentive from clearing off the shelf and buying all of them. However if the prices get jacked up, I won't buy them if I don't need them. It also provides an incentive and encourages people to be well prepared.
http://mises.org/daily/1593/Price-Gouging-Saves-Lives-in-a-H...
Seriously? The lower income people living on Staten Island during Sandy would like a word with you. Price gouging ensures that things are only available to people with excess income to absorb the gouged price.
The whole point about price gouging during Sandy is that it was an exceptional event, and maybe not one we should leave to market forces. If every grocery store tripled the price of bottled water and essential supplies then many people would be unable to afford them and starve. How is that a good thing?
If that situation had persisted it would actually be one of the rare situations where rationing makes sense- and that rationing would logically be controlled by the government. Which makes all the free market Rand-ians foam at the mouth- despite the fact that it makes sense.
On the other hand, I just finished my freshman year in economics, and when we draw a dotted line across the X of supply/demand, then there's this little triangle see? Shade it in. Yeah. So anyways that's what happened. BTW, there's no axis for "natural disaster" on my graph so clearly that's irrelevant. I don't know why you're bringing up red herrings.
It becomes a public policy issue (we have too few and how to apportion in the short term) rather than an economic issue.
During Sandy, much of the price 'gouging' discussion was regarding gas supplies. The effect of price gouging laws was that people who had time waited in line and then sold their tank of gas on the secondary market where the price gouging law was not followed.
It is really hard to make the laws of supply and demand obey legislative commands.
Where did you get that stark either-or proposition from?
It would also mean that smart entrepreneurs would pre-stage needed supplies in anticipation of the price increase. With strong 'gouging' laws, there is no incentive to spend money on preparing the supply chain or in spending more money to overcome supply difficulties (i.e diverting supplies from elsewhere, rushing delivery, etc)
Price 'gouging' contains the seed of its own destruction because it encourages over-supply and subsequently lower prices.
In post hurricane road conditions? You don't live in New York, do you?
If the price of water tripled, a decent section of the population would struggle to afford it. That is the start and end of that debate, as far as I am concerned. I believe in the free market up until it starts starving people.
Let the price float as needed and if you feel like some people are being priced out of the market, give them cash for them to spend as needed. Some people will need water. Other people will need food. Some folks will have both and instead will spend the money on gas for their generator.
Emergency cash assistance is a much better way to assist those in need and ensure that the market will rapidly adjust to provide resources in the right quantity and right location (due the the pricing signals).
In natural disaster scenarios, this is likely impossible as delivery infrastructure usually goes down for some period of time. This is why price gouging is successful for the businesses raising prices in first place.
> It would also mean that smart entrepreneurs would pre-stage needed supplies in anticipation of the price increase.
Businesses do not do a good job of stockpiling resources for exceptional events that happen once in many years and many businesses view this as a cost that is not worth paying.
> With strong 'gouging' laws, there is no incentive to spend money on preparing the supply chain or in spending more money to overcome supply difficulties (i.e diverting supplies from elsewhere, rushing delivery, etc)
There is no incentive in general since there is an very low probability that work on on delivery and supply channels will actually pay off as it is a low probability that a disaster scenario will happen in the first place.
> With strong 'gouging' laws, there is no incentive to spend money on preparing the supply chain or in spending more money to overcome supply difficulties (i.e diverting supplies from elsewhere, rushing delivery, etc)
Most historical examples of price gouging never worked out this way. On a logic basis, this doesn't make sense as the point of price gouging is to maximize revenue from sale during a short window of time while new supplies and materials cannot make it to the area where you are selling the now highly priced goods.
If you attempt to legislate the rules regarding price you are making it illegal to respond to the signal. This just leads to oversupply and legally enforced profit (the price is too high) or shortages and legislative enforced queues and delays (the price is too low).
W.r.t to price gouging, this is the thing that doesn't happen or doesn't happen quickly enough and means people who can't afford the new high price go without. For essentials like food, water, batteries in a no power situation, etc. that is a huge problem.
Smaller events like tornados are much easier to respond to because they are localized.
Price gouging laws negate any sort of systemic planning to take advantage of short-term price spikes. Eliminate the laws and you open up opportunities for creative businesses to plan and respond to these short-term opportunities.
You mean "According to my preferred economic ideology if every store tripled the price of bottled water you should have ...", because it's fairly easy to check the historical records and see that this is definitely not what actually happens.
But by all means, don't let facts get in the way of your faith.
You are either trolling or economically ignorant.
Disrupted supply lines mean higher cost to deliver materials (longer routes, special equipment, etc). Higher prices encourages suppliers to expend the extra $$$ to deliver the goods. Or even new suppliers to enter the market (for example think about construction workers or tree removal companies in the wake of a large storm traveling to where the work is).
If the price can't change (legally) then suppliers will simply ignore the problem until conditions return to 'normal' thus ensuring shortages.
Me: we're talking about "price gouging" during disasters or some other event that disrupts normal supply lines
Seems pretty clear what I was talking about. Your hypothesis about price gouging during emergencies doesn't have historical evidence.
I understand perfectly why you think it should work that way according to your ideology. I was pointing out that, in these circumstances, it doesn't match up with the data.
Plenty of other commenters, with knowledge of inventory logistics, have explained why.
I think people either don't realize, or at least haven't properly internalized, the fact that Uber doesn't employ drivers directly, but just connects drivers and riders and manages payment.
If Uber employed drivers directly, then complaining about high fares during a hurricane would make sense. It would be reasonable to say that they should just keep fares the same, put a lot of drivers out there, and maybe take a loss for the good of the community. I don't know if I'd be comfortable saying that they should, but I can understand the point of view, at least.
But with Uber simply acting as an intermediary, they have no direct control over drivers. If they want more drivers out there, they need to offer an incentive.
Why not charge just-time instead of time+distance? Would it screw over the drivers?
Time-based is mostly used by limousine services and time+distance for "regular" taxis for obvious reasons (a limo tends to be rented for a long time but not to move far, the opposite is true of regular taxis) but nothing prevents a limo service from charging for time+distance (besides looking cheap) and nothing prevents "regular" cabs from charging for time only.
That only lasts so long, until people get tired of it and start looking into the details, of course.
Which of these laws do you consider not to make sense?
How do you know Uber hasn't screwed with your app? And how does the driver know that you are not screwing him with a tampered app?
It's not only you and the driver that need mutual trust either, the tax administration also has to trust the app.
Distance + time is the most fair solution, as if there's no traffic and you get there super fast the driver still gets a fair fee (unlike if it was time only), if there's lots of traffic and it takes ages to get there then the customer doesn't have to pay a huge fee (like if it was time only).
Personally I'd never use a taxi service that charged only by time. I'm OK with time+distance, or with distance only (which is also used in some places).
That's why most taxi services are not time-only, but limo services are (you're going to rent a limo for an evening, but you'll barely drive it)
It definitely makes sense to pay more for longer distances, but I for one do not want to pay extra for slower travel. Something like m-s or m+s^-1 would be better.
At the end of the day, they could reduce the time cost so that going slower doesn't cost more, but they'd have to also raise the distance cost, so that drivers (and taxi companies) still make the same amount of money on average.
But combining them, the way it works now, makes the most sense, as when you use a taxi service you are paying for the technical costs of getting somewhere (fuel, etc.) and the cost of your driver's time, so why shouldn't it be calculated that way.
You could make the argument that chauffeurs are paid for on a time-only basis, but then we're talking about a driver who I can tell to wait for me outside the store or party, a driver who can tell me about the sights on the scenic route we're taking, or a driver who will take me all over the county on business. Then you could add a basic wear or fuel surcharge per m, but again it should be decreasing (and small).
I haven't used chauffeur services myself, but a quote I found charges less per hour than Uber and nothing per km and no starting charge. They do have higher minimums, though. So I guess Uber could be presenting themselves as a chauffeur company for shopping trips, with 50%-150% markups when moving. As the article points out, they've failed to make that case.
Of course you are - whether you do so directly or through a company is irrelevant, either way the driver needs to get paid.
They could change it so that you don't pay more for slow trips, but in return fast trips would become more expensive to even it out, otherwise all you're doing is taking money away from the company/drivers. Then people who travel at peak traffic times are being subsidized by those who travel when the roads are empty.
(Personally I actually prefer non-metered trips, where I know that A to B always costs £x regardless of traffic, but there's certainly a lot of logic in charging by both distance and time.)
but this is from a single english-language post. what is the rest of the local reaction like? [ah, see reply below - i missed "response was huge" (in the sense of support for uber)]
> The response was pretty huge. What surprised me was that people who are bright and often critical of sources jumped on the wagon without asking obvious questions:
Since the original Uber post was in swedish and targeted at swedes, I expect it was local reaction.
Looking at the 20 or so comments (in Swedish) below Uber's original press release/blog entry (http://blog.uber.com/2013/04/25/transportstyrelsen-forsoker-...), they're almost all opposed to part or all of Uber's post.
The biggest non-tabloid newspaper, DN, hasn't mentioned Uber at all. The next biggest, SvD, hasn't mentioned the current spat, but had an interview (a month ago) with Simon Breakwell from Uber. Choice quote:
Reporter: You've encountered resistance from taxi companies in some cities.
Simon: Right, but that's mostly in the USA. Before we enter a new market, we conduct a thorough investigation into the local rules and regulations to avoid nasty surprises. We've never encountered resistance based on Uber itself being illegal.
(Source: http://www.svd.se/naringsliv/branscher/handel-och-tjanster/h... I translated it by hand.)
But even as a libertarian leaning swede I find myself quite annoyed by Uber. In the 1990s, IIRC, the taxi market was striktly regulated and finding taxis where a problem. Now in Stockholm there are many, many taxis all over the place so I personally don't get what problem Uber is really trying to solve here.
I found it hard to figure out from their website how they differ from any other taxi service with online ordering and payment.
Also, if there are rules in Sweden about meters and price displays, there's probably a consumer-focussed reason for them.
I think that's less novel in Sweden, though. Taxi apps are already common, and "virtual hailing" is how most younger people already hail taxis. In addition, there are a number of taxi companies, each of which can set their own prices and position themselves in different market niches, so you can choose one you like. In that market, Über may just be another taxi company with an app, and not have enough differentiation: http://www.thelocal.se/blogs/bostonblatte/2013/04/26/stockho...
Starting in SF probably helped them, too: SF's taxi system is worse than most.
Ex: In NYC there worth 750,000+ USD at 4% thasts 30,000 dollars plus added per taxi every year.
around here we have discount taxi-but-not-a-taxi who manage to skip the regulations, yeah, they're cheap, but it's not like they don't generate a lot of controversies. and it's not like one of them after 30hrs of driving without sleep didn't crash into my gf's car on the parking lot and fainted. transport regulations have their faults, but they are invented for a reason.
I don't know about Sweden, but here in Germany licenses are limited, i.e. there is no infinite amount of taxi license per city.
There are now some complaints in the other direction about the deregulated prices, especially because some less scrupulous drivers are trying to deliberately trick tourists into paying outrageous prices. Prices have to be posted in windows, so of course no Swede or tourist paying attention would take a taxi that charges $200 for what would normally be a $20 trip. But you only have to trick a handful per day to make it a profitable scam. Just need to get some tourists who either don't realize that rates are unregulated in Stockholm, who didn't see the rate sticker, or who did but didn't mentally convert the SEK to something they understand.
A bit on that: http://www.thelocal.se/16868/20090112/
Taxi Stockholm charges 45 SEK + 246-280 SEK/10 km, which looks like more, but it's hard to compare without knowing how much of the time is spent at low speeds. Taking the pessimal estimate of 15 minutes in a standstill to charge the hyperdrive, followed by a 10 kilometer spurt at lightspeed, we get an upper bound of 50 SEK + 445 SEK/10 km, or 165% of the article's index fare. I honestly can't tell if that's competitive.
I imagine that's why they don't want to make a sticker.
Oh, and then there's the much higher fixed price for city center travel. I trust that doesn't get added on to a trip that crosses the boundary.
And unlike other companies our press releases are written by children.
Even good regulation creates inflexibility. It's just a cost. It takes into account the way things are now and makes it difficult to allow new business models to develop. It makes it difficult for companies to operate in multiple regulatory regions. They can lock in revenue streams and/or profit margins for companies, drivers or taxmen.
Uber's a new player threatening income streams. That will rattle cages. But they are also a global company and an innovative^ one. Being innovative means they clash with existing rules and policies by not fitting into existing classifications. Being multi-regional means they have a hard time being flexible themselves. They want to be able to drop in their system in every city they operate in.
They want to represent themselves as on a collision course with bad/corrupt regulation. But, they are really on an unavoidable collision course with all taxi regulators everywhere.
Not really, at least not as far as Stockholm is concerned. Unless by "innovative" you mean that they innovate in their ignorance and refusal to comply with regulations not matter how sensible those are (or, according to TFAA, how people attempt to help them: it was noted they could get their application certified as a meter and people have come forward to help with that, it would seem uber didn't even try doing that).
Except you already did that in Stockholm, at least for the ordering part (not sure about payment).
This is such a BS. Stockholm is one of the best capital city to live in, and one of the reasons is that the car traffic has the lowest priority there. You actually need to pay to enter the city centre by car, which I would consider much more modern approach than giving everyone an easy way to drive a limo.
"The market is unregulated, meaning that you can set any price for your services."
"You can safely say that there’s healthy competition on the market."
"You do need a permit to have a taxi service."
"The fact is that Uber are asking for an exemption to be able to compete on unfair grounds"
Notice some contradictions here?
Author claims that market is unregulated and competition is fair, but then admits there is regulation and legal requirements (that cost real money). If you want to make a nice private taxi service with 2x lower prices, you cannot because you have to pay local government for all licenses and whatever taximeter they provide you, not the one you design for your own company and your customers' safety.
When talking about "unfair advantage", author makes presupposition that existing regulations and licensing are "fair". Well, that needs to be proven. Saying "somebody voted for it in a democracy" is not a proof, sorry. Try that with a scientific study: "scientists voted that P != NP with 58% majority".
The author mentions that Uber could have tried to get their App approved as a taximeter, but they did not even try.
> Author claims that market is unregulated and competition is fair, but then admits there is regulation
Getting a license is not a "regulation". What the author means is, that the prices are not regulated and the taxis are free to charge whatever they want. So Uber can offer their service at any price, without being forced to a minimum or a maximum.
The reason you can't provide a service with 2x lower prices is that you would make a huge loss doing that, and it has nothing to do with regulations.
You are allowed to design your own taximeters btw.
And the regulation is "fair" in the sense that it applies equally to all companies (note that Uber is trying to get exepmtion from a rule that their competitors comply with).
The fact that you need a permit does not constitute regulation in any sensible sense (unless you call everything regulation), since you need a permit for basically everything.
The fact that you need a certified taximeter is customer protection – given that Uber charges per kilometer and time unit, I don’t see why they oppose a certified taximeter.
Similarly, you cannot make a nice private business selling X, because you have to pay income tax and VAT.
Same goes for certification. There are people who get the right to define certification rules and use armed police force to make you comply, and there are people who cannot do that.
Whenever you have a democratic vote and 60 persons outvote 40, a new "fair" rule is applicable to everyone, however 60 people are okay with it and 40 were against. In other words, 60 people think it is fair to force 40 persons just because the numbers look good. Is it an example of the rule that applies fairly to everyone?
Also the 60:40 vote issue this is why we use a representative democracy backed up with a constitution. It's harder to stay in office when you regularly piss off large voting blocks. A politician will often consider more than just what percentage of the population would vote for something but how much people on both sides of a issue care about it.
Then they use a lot of accounting here and there, but it does not change the fact that in the net some people had some property transferred from others to them in a non-market fashion (not in direct exchange for some other product, but because it's a "rule"). In my view it means that "taxation" is not applied equally to everyone. So it cannot be an example of a "fair" rule that you defined earlier.
Of course, we may talk whether redistribution of wealth is "good for society" or not, but that's outside the question of "universality of the fair rule".
Am I wrong about that?
Now, put aside "fairness" issues, just imagine if someone comes up with Uber or similar service to work around these licensing requirements. And at the same time provides superior service. They will be able to ask lower prices, which will endanger every taxi driver who's invested already to be a part of a monopoly.
Now imagine that something like Uber moves to bitcoins and become almost anonymous. You won't be able to shutdown the central organisation - it's outside the country and has no bank account. You'll have to fight with individual "illegal" taxi drivers that use the system. But how would you prove that they get paid? There are no credit cards or cash. The person who gets in the car only tells the driver a short pin code to authenticate himself. Or says nothing at all. The driver just gives a friendly lift.
Suddenly no one needs taxis and every taxi driver has lost tens of thousands of dollars invested in his license and can do nothing about it. Customers win, other drivers win, mafia loses. Is it fair? Is in unfair? If you cannot avoid this outcome, does it really matter?
Customers do not win, customers get assaulted and raped.
It's not always (or not only) down to cartels and corruption.
You developed a Mac App, so you paid the required fees to Apple (Developer license, 30% cut, passing through the sandbox hoops, etc.) What would you think if another developer could do exactly the same as you, without need for sandboxing, developer license and getting 100% of the money? Don't you think this would be, let's say, odd? Wouldn't you feel it was unfair?
I just looked it up to make sure (I'm from Spain,) and taxi licenses are unregulated in Sweden. So if I spoke Swedish and knew Stockholm well enough, I could go and get a license, by passing an exam and probably paying some kind of minimal fee. It's not like the government is asking for the Moon and Uber is offering a geostationary satellite. The government asks for the bare standard, and police comply with illegal taxi laws. Illegal taxis are illegal since they don't have a permit, just like an illegal driver is one without a driving permit.
With some of the drivers I've had, you don't even need those two. Not that it's actually a problem, everyone speaks english and they all have GPS devices.
This is no different than arguing that we should continue drug prohibition because there are a lot of violent incidents that occur during transactions. That violence exists precisely because the activity was forced underground.
Moreover, even if those services weren't illegal, it nevertheless is true that lower cost services will always bear a higher degree of risk. The same thing applies to practically any business. Being poor sucks, but pricing such people out of entire industries won't help them.
What's a fallacy? That the unregulated market resulted in a lot of rapes and assaults, and now it's more regulated (and parts of previous practice are illegal) there are less?
Because that's what actually happened, whether you think it's a fallacy or not.
Again, the analogy with drug prohibition is clear. There is an incredible amount of violence occurring, but that isn't a justification for continuing its illegality. To the contrary, its illegal nature is the primary reason the violence occurs, because there is no way to settle disputes in the court system.
Similarly, someone operating a black market taxi cannot call the police when someone refuses to pay. Instead, they must resort to threatening (and engaging in) violence to get payment. The customers may engage in violence against these underground drivers for the same reason. Making it illegal serves nobody, and only increases danger for all parties.
Except the numbers are now smaller, less people are put at risk and less people see that risk realised. It demonstrably has made the situation better, not worse.
Again, the analogy with drug prohibition is clear. There is an incredible amount of violence occurring, but that isn't a justification for continuing its illegality. To the contrary, its illegal nature is the primary reason the violence occurs
Except that turns out not to be anything like what happened with cabs when the violence was worse when the illegality was not present. So no, it's not a good analogy and it doesn't work.
Similarly, someone operating a black market taxi cannot call the police when someone refuses to pay. Instead, they must resort to threatening (and engaging in) violence to get payment.
This is their lookout for running an illegal service.
The customers may engage in violence against these underground drivers for the same reason. Making it illegal serves nobody, and only increases danger for all parties.
Except it has actually reduced the danger.
Look, you can argue the prohibition line all you like but it doesn't match what has actually happened out in the real world.
Moreover, reality has a way of resisting controlled experiments. It is essentially impossible to control every variable that might influence reported crime rates, so the mere fact that there may be fewer reported taxi-related crimes after regulation increased than before would be an unconvincing argument.
This is really an epistemological argument. Due to the inherent uncontrollability of every variable, the only way to accurately understand the effects of a government policy are to look at the economic incentives it creates. Simply asserting that economic incentives that underly the drug market don't also apply to other black markets is arbitrary.
Drugs are not like cabs. You can't get a licensed drug after five minutes wait. Nobody actually wants or needs a specifically illegal cab, they just want a cab. The analogy simply does not work.
What's unconvincing is you calling my argument a fallacy and then falling back to "oh but it's hard to measure!"
--edit-- also FFS you think anyone's put off reporting assault because they were in an illegal cab? What the hell are you on? It's not illegal to be a customer, it's illegal to run the service.
Moreover asserting the difficulty of empirical measurement isn't a cop-out; it's one of the most fundamental debates, not just in economics, but in philosophy. This is Plato vs Aristotle, or Kant vs Hegel. It's an incredibly important issue and not one to dismiss so nonchalantly.
Regarding the likelihood of reporting assault, I was specifically talking about drugs. You are probably right about the unlicensed taxi customers, but nevertheless the statistics for taxi assaults don't tell then whole story because there is no way to account for assaults that occurred elsewhere that would have occurred in taxis has they been more readily available. Even if that data were available, the uncontrollability of other factors would continue to burden your attempts at empirical proof.
But it is arbitrary to assert that it works identically for all commodities and services. Demand for some things (a ride home) is easily sublimed from one solution (unlicensed cab) to another (licensed cab). Demand for other things (heroin, weed, whatever) does not work the same way because the demand is 100% aligned with the illegal item and therefore far more likely to set up a much larger black market.
I think you would have a very hard time proving that the crime levels stayed the same and the crime had just moved. Allowing unlicensed, unregistered cabs that pick (mainly drunk) people up from the side of the road, was putting vulnerable young people at risk. At least some of this demand has been shifted to traceable, regulated businesses.
Cracking down on these unlicensed cabs won't hurt the wealthy as much, who naturally have more choices for transportation, but it could absolutely hurt poorer people who have don't have as many alternatives.
I'm not really sure what your problem is here.
If the risk of these services outweighed the time advantage, people wouldn't be using them. Moreover, eliminating the choice doesn't necessarily stop them from being victimized. Whatever form of of transportation they may use instead, such as walking, could involve similar violent crimes, which wouldn't make it into your official statistics for taxi-related crimes.
They were drunk people, that's largely who used them. I have been one.
If the risk of these services outweighed the time advantage, people wouldn't be using them.
False, this assumes perfect information is available and that people always make good choices. These things are not true.
Moreover, eliminating the choice doesn't necessarily stop them from being victimized.
It makes it less likely, as the guys aren't hanging out looking for business outside pubs and clubs any more, and these drunk people (amongst whom I have been counted many times) call a registered and regulated company.
Whatever form of of transportation they may use instead, such as walking, could involve similar violent crimes, which wouldn't make it into your official statistics for taxi-related crimes.
Entirely possible, but public transport in London is pretty safe and as has been mentioned, licensed cabs are not generally more expensive, they just take a few minutes to arrive.
You agree, then, that awful crimes could still be occurring elsewhere but are impossible to determine whether they would have occurred in taxis prior to regulation. It is thus impossible to determine if those alternatives are actually safer, and even if they are, safety may not be the only priority people have. It is entirely based on your own subjective risk tolerance.
Not when you're drunk they aren't. It's arguable that a choice was being made. Secondly, if there isn't perfect information, it's not possible to accurately gauge the risk.
Sometimes, you make a bad choice and suffer the consequences.
And we don't, as a society, think it's reasonable to have people on edge about making the right choices all the time, so we seek to mitigate those consequences as a group.
"Eliminating choices doesn't eliminate those consequences, it simply forces you to either adjust your risk tolerance against your will or engage in even riskier activity."
OK, cool, now how terribly awful a transgression is it to force (OMG!) people to call a cab instead of stumbling into one? It's not. And that's what people do now.
And no, I don't agree with your estimation. It is not impossible to tell if crime rate has dropped, it is not likely that crimes are going unreported due to the taxi 'black market' and it's relatively easy to determine if the alternatives are safer, and they have been.
"safety may not be the only priority people have. It is entirely based on your own subjective risk tolerance."
Sure, we can agree on that, and democratically we as a society have agreed that some risks are intolerable even if (gasp!) some people have to get the bus or pay an extra 50p for a cab. So we make laws.
Come on, stop messing around, you know this is the bit you really object to, society deciding amongst itself that your unregulated business is not wanted and cannot be run here. Yes, it is the government (or the people) inflicting their will on others in the interests of safety and progress. You'll never persuade me this is wrong.
I make it no secret that I object to this. I think it is unethical and I certainly agree that I won't persuade you on that point. However to some degree I think you do see a problem with it, which is why you try to downplay the costs by pointing out that it is "only" 50p or "only" 5 minutes. If forcing your risk tolerance on others is indeed ethical, this psychological hedging wouldn't be necessary.
It is entirely ethical to rule out the worse risks in society, because fundamentally it makes it better for all of us. Particularly the vulnerable in whatever form they take. Not everyone is even capable of rational risk assessment, and many of the rest of us don't want to have to be constantly on guard. I'm sorry if this offends you.
I'm glad you admit the outcome doesn't matter to you, only your ideals.
Given that you seem to have plenty of real world experience about this, it would be interesting to hear your explanation. Also, still waiting for you to explain how poor people have been priced out of the industry.
In the case of unlicensed cabs, they are clearly in the "black market" category. As with all black markets, they aren't necessarily cheaper than their legal equivalents, but nonetheless they are there due to unmet demand in the market.
In Sweden there is no such thing, that's why the post says it's deregulated. All you need as a driver is a special driver's license (~$150) and what you need as a taxi business owner is proof of financial stability ($15K in the bank).
The Swedish taxi market is already extremely liberal in comparison to most places.
Notice some contradictions here?
There is not an objective reason in the world to regulate taxi-services. None.
No, it didn't.
Now, you can argue that the people getting into those cabs should have known better, and that morally you ought to have the right to run one of these services. Law is the rest of us telling you where you can stick your absolutist morality while we find a nice balance that allows people to live the best they can with minimal restrictions.
http://en.wikipedia.org/wiki/Market_failure
You're welcome.
2. Regulation was also brought into place that made it illegal for private cab drivers to hang around touting for business, they must be called up and dispatched to you. This way you get a cab from a registered business, not some shady guy hanging around saying "I take you home seven pounds".
3. We consider it, in communist europe, part of the government's duty to protect its citizens and to enable them to live lives free of constant worry about assault, rape, robbery etc etc. I know you brave libertarians consider us childlike for not constantly considering personal defence, but it makes life a heck of a lot more pleasant.
4. The libertarian model disgusts me. If you get food poisoning you won't eat there again? If you get sexually assaulted or the car falls apart then by gum, you just won't use that firm again and you'll give them a jolly poor review! The rest of us like safety standards and rules to prevent these situations in the first place.
"the libertarian model disgusts me"
Do you agree that people have different standards of what is good and what is not? If you don't like something and I'm forcing you to swallow it, you won't feel any good (even if it's good for someone else).
Now, one way to resolve it is to come up with some boundaries that we cannot cross (e.g. "do not kill") and then everyone does what they please.
Another way is to say "stronger/bigger majority can press others to comply with what those in majority feel is good".
Do you realise that any law is a threat of murder? Even if it does not say so. If I make some customers happy, but you get jealous and angry and use a law against me to make pay a fine or shut down business, you are basically threatening me with a violent police force. If I don't comply, police will take me. If I try to protect myself, they may kill me.
What's my argument for you: if you want some protection, go make it, no problem. I'm not the one who will threaten you with violence. If you find a great business model to offer protection, monitoring, insurance etc. and my company goes out of business, well, that was my risk and my opportunity. And if you go out of business, it's the same: no one gets threatened, robbed or killed. We both just try to solve the problem in a peaceful manner. But when you start talking about regulation, then it is real threat of violence, guns, prisons, rape and confiscation.
dude, what's wrong with you.
Here's one major flaw in your thinking "We both just try to solve the problem in a peaceful manner."
You ascribe honourable motives and noble behaviours to all actors. You are demonstrably wrong where human behaviour is concerned.
Anyway, we're no longer talking about taxis at this point, and I'm not up for a full discussion on the libertarian model. Needless to say, we don't all see the world in as black and white a way as you.
Then by this definition, you should be more concerned with giving the power to a monopoly which is a state. People would surely be very likely to abuse this kind of power. When you a have a private company, it goes out of business the moment its customers stop paying money. Government doesn't have to worry about that happening, because it can force you to pay. And you can only vote once in a number of years.
The government is also not to be trusted, it's true, but at least we can vote them out.
You just don't see consumer protection as a service while it is - and it's monopolized by the government. If you had private consumer protection agencies financed directly, then the moment this agency starts screwing its customers, it's out of business, because people stop paying. Compare this to consumer protection via a government: you can't simply stop paying, you can't effectively influence how an agency works and you don't have a choice between various protection agencies that best suit your interests as a consumer.
Now tell me why should I ever choose government over a private market given this situation? In other words, can you convince me (and not force me to comply) that a government can protect my interests better?
You don't know much about the justice system in Scandinavia, do you?
It's just remaining 5% of our lives are affected by some forces that we don't understand and/or don't really like.
So I don't believe that "libertarian model" disgusts you really. You just confuse lack of imposed regulations with a lack of security. Look around you: how much security is nicely and cheaply provided for you by the fellow citizens without laws, courts and guns.
It results in (for instance) a world where idiots drive unsafe cars with impunity. Where private drivers rape young women (somehow the market is supposed to solve this? It demonstrably did not), and a million and one other things that we, as a society, have decided constitute an unacceptable risk to the rest of us.
The problem is not that I can't form good relationships, the problem is that assholes exist, and always will. The rest of us came up with government and rules to protect ourselves from them.
The libertarian way, however, is not that there should be no regulations. The idea is to 1) make regulations voluntary 2) not give the right to regulate to a monopoly with the exclusive power to use force.
You see, if there is a demand for certain things on the market - like safety, for example - market finds a way to provide those things. You don't need a government to protect you, it's an illusion and the longer you believe in it, the harder it is for you to see an alternative.
I just don't accept that government, laws, taxes etc as morally wrong from the outset, or that it doesn't matter what the outcome would be without them because OMG violence!
Thus you saying you don't accept that government and taxes are immoral is actually the same as saying you don't accept to call it theft and force when governments do something to the rest of the people who disagree with you.
If 40% of people don't accept your interpretation of land ownership rights then you would have no problem forcing them to follow your interprewtation of those, so stop getting all high and mighty as if you have an unassailably correct and violence free philosphy. You don't.
What you propose results in a race to the bottom, where cars and drivers are dangerous but deceptive about it. You create incentives to lie.
This, like car safety ratings, is something rather hard to judge by a cursory look around the place. We also consider these two things important enough for regulation as they can result in illness, injury or death.
Shoes, well, if your shoes fall apart very quickly then you have a statutory right to a refund, rather than a libertarian 'right' to bitch about it and hope to damage the business. Other things are regulated similarly.
It's not a question of someone choosing for you, it's a question of society coming up with standards and regulations to take the danger of unscrupulous or negligent merchants out of the picture.
Edit: here are the details http://www.transportstyrelsen.se/Vag/Yrkestrafik/Taxi/Prisin...
Uber could use this standard exclusion: "Tariffs by written agreement exclusively for a particular customer or passenger category do not have to be reported in the price data."
edit2: I'm reading the law now. There are massive loopholes all over this thing. Uber could easily implement their standard business model within this framework if they'd just comply with a few things http://www.transportstyrelsen.se/Global/Regler/TSFS_svenska/...
If "existing regulations and licensing" are unfair, better rope in every one and ask for changing those regulations; asking for exemption from the rules that everyone else has to comply with is not fair either.
The licenses needed are minimal compared to any other taxi market:
* Driver's need a more stringent driver's license ($150)
* Business owners need to prove they're running a serious business by passing a test and showing proof of enough capital to run the business. This application required an administrative fee of under $500. This is absolutely nothing compared to the 10's or 100's of thousands of dollars needed in other countries (where it's often impossible since their numbers are limited).
These requirements stem from the dangers of unprofessional drivers - unregulated taxi drivers in Sweden have been linked to robberies and rape of passengers. It doesn't in any way create a taxi monopoly. My mom could start a taxi business in Sweden.
The regulation is mainly pure consumer protection. The same kind of regulation that covers supermarkets: approved measurement devices (approved taximeter, same requirement as approved weights), upfront about prices (sticker on the window, same as having proper pricing on your shelves).
Some of the taxi regulations are there for good reasons. If Uber cannot provide better, cheaper and safer service at lower price with the same rules they do not have right to exist. And if they want to bring a regulation down they should do it for the whole industry if it is already obsolete.
I choose them exclusively.
You don't have to be perfect to be better...
They can't have that good of a grasp of Swedish culture if they thought this would work. I'm struggling to find a hypothetical country in Europe where "obnoxious American" is the preferred type of American.
Bureaucracy. I hope you choke on it.