Uber rival accuses car service of dirty tactics
money.cnn.com
money.cnn.com
The statement is absolute bullshit too: "In this instance, the New York City team was a bit too ambitious and we'll make sure they tone down their sales tactics."
No, this is unacceptable. This sort of fraudulent behavior deserves consequences larger than "hey, stop that".
I live in NYC. The Uber app has now been banished from my phone. It's too bad the Gett app is kind of an unpolished turd.
If the criminal/fraudulent activity which occurred in New York was directed from management based in California, wouldn't the crime become a federal one? What if the e-mail trail reveals similar activity in multiple states directed by managers in San Francisco?
No, though that may make it so that a federal crime (e.g., wire fraud) was committed in addition to any state crime that was committed.
Charges can brought in multiple states at the same time, for the same crime which doesn't violate fifth amendment protection of double jeopardy. It's known as the dual sovereignty doctrine.
The FBI only gets involved in the most serious of cases such as organized crime, drugs, gangs, terrorism, cyber crime, etc.
What the FBI investigates: http://www.fbi.gov/about-us/investigate/what_we_investigate
Info on the dual sovereignty doctrine: http://criminal.findlaw.com/criminal-rights/charged-twice-in...
If you're suggesting that they should be prosecuted, then we can argue that, but Uber is not able to prosecute members of its team. What do you expect Uber to do, other than to stop the behavior?
But Gett can take Uber to court, and possibly make a criminal complaint.
In this forum we talk constantly about onerous government regulations and the long arm of the law. There are many perfectly legal ways companies can punish or sanction its employees, and IMO it's an eminently good idea to do so.
If you don't want to the government getting all up in your face you're going to have to self-regulate to some degree. Punishing employees who behave unethically is a part of this.
It looks like this is Uber's culture and not just a few employees in one office behaving unethically. The article also mentions that everyone from the General Manager down were involved in this. The GM is basically the head for a given city. That tells you how far up the chain the lack of ethics goes.
Not sure about this company, but for Uber the cancellation fee should only happen if you cancel after five minutes of scheduling a ride. I've seen Lyft and other rideshare companies have similar policies.
Presumably so that the customer can contact the driver if they need to pass on instructions about a specific place to be picked up, etc.
Theoretically, if the company can get a bunch of phone #s, they could even completely anonymize it by assigning two temporary numbers (one to driver, one to passenger) and call-forwarding them for the duration of the trip. I havent' checked but I doubt anybody actually does this. And in the absence of this level of anonymity, I would at the very least expect a car service app to require you to place the call before giving you the phone # of the other person.
You wouldn't even need a bunch of phone numbers. Assuming caller ID works correctly, you can use that to decide where to route the call. Customer A is calling? Route to Driver X? Driver Y is calling? Route to Customer B.
I haven't seen an instance of caller ID being 'futzed' with in domestic calls from domestic mobile phone numbers, but I agree it could happen for people roaming internationally.
Actually, I think they use some sort of phone proxy service. I once looked at my driver's phone and he had a totally different number listed for me that I did not recognize (same area code though).
Legit customers can't book cars because they're busy and when they do the drivers might bail because they think its yet another fake order.
Screw Uber. Theyre not a tech start-up, they're an illegal car service masquerading as a tech company.
A better analogy than the pizza analogy might be a "customer" repeatedly buying clothes with the intent to wear and then return them. Despite the fact that there is a return policy in place, the fact that the customer never intended on keeping any of the clothes makes his behavior fraudulent.
Get a bunch of people to repeatedly queue up but when they get to the counter decide they don't want to order anything.
Just the sight of a long queue outside the door is going to put off legit customers
Clearly Uber are engaging in activities to disrupt and cause harm to the business of their competitor.
It's dickish, but no actual harm is done.
And if it cost $1 per cancelled pizza they would actually profit off of it.
In the case of a real restaurant, yes there is harm done. The cost of taking an order is not zero for people: it cost people time and real customers may not be served in time. Maybe not for this particular case with Gett since they're automated.
You could argue that there was no harm to Gett because of the cancellation fees, but that's only true if the cancellation fees are greater than the cost they incurred which may or may not be true.
Or at least intentional harm. Such as if they meant to cancel immediately but didn't.
Are you a lawyer familiar with fraud related laws in New York?
IANAL. However, in the UK I suspect it would hinge on whether you gained or whether there was harm. Fraud by false representation is - IRC - defined in those sorts of terms in the Fraud Act 2006.
Point being this stuff varies and doesn't necessarily align with what we might intuit it does.
How exactly is this not fraud?
Even Uber's legal representation said they could be liable for damages:
If Uber employees intentionally diverted Gett drivers from legitimate business by making phony calls, that is an unfair business practice, illegal under California law," he said. "It is also an intentional interference with Gett's business which makes them liable for money damages.
The balance between sales and the long-term vision of a business is hard. You need people that are driven but are interested in sticking it out. Sales has a high-level of burn out so it's hard to get someone driven and interested in staying long-term at a company.
This Uber thing is salespeople doing whatever it takes to get that commission. Uber maybe needs to reinvent their sales incentive structure the same way they've reinvented ridesharing.
They don't need to reinvent anything here. Lots of companies have salespeople with no experience and a high turnover rate. Yet they rarely directly sabotage their competitors.
The worst thing a company in a leadership position like Uber can do is take actions that acknowledge their competition. Even if they are trying to screw over their competition they are doing them a big favor by acknowledging them.
It seems that Uber may lose their first mover's advantage by their greed and small mindedness.
Point of pedantry: You're aware because someone wrote an article and someone else posted it here. I wonder how many other locations have tried similar tactics but not been widely exposed.
At a certain point, you go overboard with pedantry.
"Uber Driver Allegedly Locks Passenger In Car, Gives Himself Five-Star Rating"
http://laist.com/2014/01/21/uber_driver_locks_passenger_in_c...
Will it? Why? Unlike social networks, I don't see why would Uber benefit particularly from network effects; it doesn't even have switching costs, since the consumer can use both concurrently.
A consumer can use Uber and a competitor. This, however, is not unlike social networks, it is entirely like social networks. A consumer can use two social networks as well. However, in practice if one car service or social network does a good enough job the consumer is unlikely to use another.
As nickpinkston said, those are economies of scale, which is a related concept, but not the same.
A consumer can use two social networks as well.
Yes, but this is where the difference highlighted above kicks in: in a social network, the total number of users is not as relevant as the number of connections the user has, so the user can be "stuck" even if he feels the product is not good enough. In a product like Uber, there's no such effect; people can switch as soon as they feel like trying the alternatives.
This is still network effects, just with two different parts. The drivers benefit when there are more users, and the users benefit when there are more drivers. It falls clearly into the definition of network externalities when you take the drivers into account.
But the absolute numbers of each do not matter. Adding more drivers does not benefit existing users if more users are added as well to cause those drivers to be active on trips whenever a new user tries to book a trip. And adding more users without adding more drivers is, of course, bad for the users, because it produces a scarcity of cars.
This is pretty much wholly unrelated to the idea of network effects.
If all the calls are going to Uber, the drivers will too. If Gett/others have no drivers, they won't be able to build a base of customers.
I believe this is what the OP was referring to with network effects.
MySpace was also the leading firm in its industry.
In Houston I've seen a lot of cabs with some app advertised on them - Hail a Cab or something like that. Actually painted (or maybe long-term decal lettering) so it's obviously embedded somehow in the industry. Eventually you'll see firms with pre-existing relationship take advantage of the business model.
They all essentially claim that a driver's personal auto insurance is good enough and combined with the companies umbrella policy provides sufficient coverage. But then if you go and read their fine print that really isn't the case and if you were to be involved in an accident while driving for them there is a good chance no insurance would cover damage to yourself as the driver or your car.
Lyft for example brands themselves as a "friends giving friends" rides type of arrangement and they call the money exchanged a "donation" so they tell drivers, "who is your insurance company to say you can't do that"!
Uber acts like personal insurance will cover it as well if you are an UberX driver but then in the fine print it says it is the drivers responsibility to confirm driving for a "P2P" ride service is ok with their insurance company. Of course if you call any of the major insurance carriers and ask them they will tell you, "hell no that isn't covered".
If you look at the taxi insurance market it is made up of a bunch of dinky little companies no one has ever heard of or in some cases taxi's are insured by quasi government insurers of last resort or by verifying you have the minimum insurance requirement on hand in cash. None of these options is cheap so it isn't surprising that ride sharing services would want to avoid them because they would have to end up paying the drivers a lot more and they would no longer be 30% cheaper than taxi's
1) Checked "Automotive Liability" section
2) One or more of the following checked boxes underneath the "Automotive Liability": - "Any Autos" - "Hired Autos" - "Non-Owned Autos"
3) Your name listed as a "named insured" in the "CERTIFICATE HOLDER" area at the bottom
Just in the past few weeks...
"Uber Driver Arrested in San Francisco Crash That Killed Girl"
http://www.nbcbayarea.com/news/local/Uber-Driver-Arrested-in...
"Lyft Driver Hits Elderly Woman in San Francisco Crosswalk"
http://www.nbcbayarea.com/news/local/Lyft-Driver-Hits-Elderl...
A Lyft driver hits someone (while active on a trip), Lyft doesn't issue a blog post (a news story contained a paraphrased "statement from Lyft", but I see nothing on Lyft's own blog), and hacker news doesn't seem to care.
This strikes me as pretty strange.
At first Uber denied the driver worked for them. Then they admitted the driver was with them but he wasn't "working" because he didn't have a passenger.
In constrast, some news reports claim that the driver believes he was working for Uber because he was searching for fares at the time of the accident.
To my reading, it sounds like they simply had no way of knowing that the driver worked for them without the police giving them details on the driver.
They were more worried about being associated with the accident than the accident itself. Lots of weasel words and excuses in trying to claim that the driver didn't work for them, or that the driver wasn't active or doing a trip.
If I worked for Uber, I would have posted something simple and left it at that e.g.
"We have been informed by law enforcement that there has been a traffic accident in San Francisco involving an Uber driver. We send our deepest condolences to the family and victims of this tragic accident."
The end.
Of course they care more about being associated with this particular incident than about the singular victim.
Are you going to call them out for not expressing condolences for the other hundred people that died to cars that day?
Then later (I think on Jan 2nd?) they updated their blog post, presumably in response to details of the driver being released, to confirm that the driver was an Uber driver (just not one on an active trip), and that he has been deactivated.
Then it closes by repeating the condolences to the family.
I agree that it would have been nice if Uber could have confirmed that the driver worked for them initially, but it's not obvious that they were even in a position to find that out before details on the driver were released.
If a Yellow Cab driver killed someone do you think they would deny, admit and then caveat with 'but he doesnt really work for us because he didnt have a passenger in the car and his lunch break was coming up blah blah blah'
Yes, if a yellow cab driver hit someone with his own car while he was not working (which is what happened here), yellow cab would very much deny any liability.
Who needs pesky Taxi and Limousine Commission busybodies to ensure people aren't arbitrarily blacklisted from being able to call a cab?
"Nearly half of [NYC taxi] passengers have a household income of $100,000 or more a year." (2014 Taxicab Fact Book)
Overall, keeping cabs expensive is probably a net benefit to the overall city transportation/livability ecosystem.
- A highly effective and heavily taxpayer-supported mass transit system (aka the subway) that gets people around marginally slower than taxis, and actually faster than taxis during peak hours. Rides are $2.50, less when purchased in bulk.
- A restricted supply of taxis has meant supply concentrates in the southern portion of Manhattan where fares are frequent and relatively short (maximizing profitability as there is a $3.50 meter drop immediately when taking a new passenger). Taxi drivers strongly avoid areas where fares are less frequent, and rides are longer - and surprise, that's where poor people are.
These have nothing to do with higher fees - enforced supply has resulted in lack of taxi availability to the poor, but not because of high fees. Cab drivers are incentivized to min-max their fares, regardless of how much their medallions cost.
There is actually a program out right now: boro taxis, which are only allowed to operate in the outer boroughs - away from the wealthy parts of Manhattan. This program was specifically started to offset the supply crowding and allow people in more far-flung neighborhoods (read: poorer) accessibility to cabs. They charge the same rates as every other taxi in the city.
Also, before anyone points out that the limited supply is keeping taxis out of the poorer areas, there recently introduced boro cabs[2] are meant to solve this specifically, with limited areas where they can pick up passengers and a much cheaper medallion ($500/year instead of ~$200k/year).
[1] http://factfinder2.census.gov/faces/tableservices/jsf/pages/...
I support (!) regulation prohibiting retaliatory blacklists.
I support criminal prosecution of fraud, like the accusation of Uber's fake orders to rivals.
I support background inspections for taxi drivers.
I support regulation that demands a high level of driving skill from taxi drivers. And any supporting regulation, such as mandatory courses, tests, and inspections.
I do not support taxi commissions as creators of privileged monopolies.
I do not support taxi licenses priced above $1 million per car as a tool to enforce monopolies.
I do not support price controls on economic services, including taxis.
I do not support supply quotas on the number of taxi sales.
I do not support any similar attempt at centralized command & control economics.
Those are the reasons I criticize taxi commissions (that and the extreme corruption). Can you accept that this is the position of most of your opponents? Don't strawmen us.
IMPORTANT: I've used Uber, and the experience has been great. All I'm saying is that I don't love the cavalier attitude towards city regulations on taxis, and that I think that attitude flows down the chain.
There are many companies challenging the first kind of regulation that wouldn't indulge in the breaking the second kind of law. Disclaimer: I started one of them - InstantCab, which competes directly with Uber and Gett.
As far as I understand, the only thing that medallions offer as an advantage in New York City (where they cost a million dollars) is the ability to pick up people who hail a cab off the street. Other car services exist for prearranged rides, and are called car services, not taxis.
Honestly, since all that really matters to Uber is $$ and being forced to deal with the law (and even then only barely), Gett should just sue them. It's clearly illegal (putting aside differences between NY/CA law) and it proves the point in a way they'll be forced to notice.
That's certainly Uber's stance, but it's not "obvious" at all :
> [OP] "In some cases, Herman said the Uber employees waited until the cars had showed up to cancel the order. Uber said the orders were all canceled immediately."
Deliberately waiting until the last minute to cancel a ride would certainly indicate intent to disrupt. That Uber is denying having done this should not exactly come as a surprise.
Sure, if they actually did that. At the moment this just seems to be Gett's word against Uber's, and since doing that would not in any way aid Uber's goal of harvesting phone numbers, I'm not inclined to believe Gett just on their word. The most benign explanation is that the drivers simply didn't check their phone to see that it was cancelled until they'd arrived at the address.
You're just making assumptions about Uber's goal.
It's Gett's word against Uber's, and the latter is the one who has admitted engaging in immoral and possibly fraudulent activity.
"opens up new economic opportunities" is that what we are calling "sales" now?
Why does the bit at the end discuss California law? This happened in New York.
Very shitty, lose-lose situation for Gett. The fact that they got "free PR" out of this CNN article is probably small consolation.
How AirBnB Became a Billion Dollar Company http://davegooden.com/2011/05/how-airbnb-became-a-billion-do...
TLDR: Dave Gooden setup a honeypot on Craigslist to test whether AirBnB staff were creating fake Gmail accounts to spam Craigslist users & suggest they should post their vacation house listings on AirBnB instead.
Here's another NPR story about price gouging: http://www.npr.org/blogs/money/2012/10/29/163861383/why-econ...
There's not a law that says you have to charge everyone the same rate - just that you can't base it on certain types of discrimination.
Note: I'm okay with calling all those practices "price-gouging".
The idea is that jacking up prices to take advantage of adverse conditions or emergencies is not the same as normal supply-and-demand based pricing in response to seasonal variations, etc. I don't know if Uber's practice fits the definition in the statute or if they're being investigated for it.
Yes, if there's not an increased demand during that snow-storm but they're caught with 5X prices, I think they'll be in trouble under those "price-gouging" laws.
I personally feel like that's not price gouging, so long as it isn't your only method of transportation. If you were very price conscious, you would probably be using a cheaper Uber competitor to begin with.
As much as I love über I think these tactics aren't going to win them fans. Competition in the market should be a good thing, right ?
Calling it "a bit too ambitious" is just further proof of Uber's structural lack of values.
I guess the question is whether sending requests and cancellations to 100 different drivers over 3 days (about 33 different drivers per day, maybe 4-5 per hour in a workday) really constitutes a denial of service. It seems exaggerated, but it is working as Gett is getting attention.
Definitely a bad idea though.
I guess I shouldn't have expected much from a company that was founded on the principle of giving their customers the experience of being a baller.
I only wanted a consistent and yes boring, non-baller experience.
I'll be looking to find a boring company that just shows up, doesn't try and and cheat me during peak period and has respect for other organizations.
I once loved you, but now I'm leaving you.
Sincerely, Brian McDonough
>I only wanted a consistent and yes boring, non-baller experience.
You can use the Uber app to get cabs or lower cost UberX. UberX is actually cheaper than most cabs while providing the convenience of ordering electronically, knowing roughly how long to wait, and paying electronically (with receipts.)
>doesn't try and and cheat me during peak period
There have been some interesting discussion about this on Travis Kalanick's Facebook page (https://www.facebook.com/traviskal?fref=ts, December 24, 2013) which basically say that the alternative to surge pricing would be not being able to get a ride at all. Some people on that thread suggested that the Uber client could be improved to let people get notified when the rate goes back down and other UX improvements and Travis said the team would consider those changes.
So I guess I say this with a disgusted sense of admiration - kudos to them for figuring out a new way to beat the competition.
- p. 146, The Tycoons, Charles R. Morris, ISBN:1429935022
It's a competitive market, but there's better ways to grow than attacking competitors and banning developers (earlier story) who try to do interesting things to extend your service.
Generous of the article to refer to Gett as a "rival" and not a clone.
Because Uber is so crazily innovative that no-one else would ever think about doing it? Come on. It's a car service with a smartphone app. There's a reason there are at least a dozen companies doing it.
The difference is between picking up your phone to get one vs. using your smartphone. Uber was first to market, but it's silly to pretend that without them it wouldn't have happened. That's like calling the Pizza Hut app a clone of the Domino's app, because they both order pizzas and Domino's came out first. Ultimately Uber is a newfangled (and more convenient) front-end to a service that has pre-dates itself by a wide, wide margin.
The extension from "call the car company to get a car" to "use an app to get a car" is a pretty obvious innovation, particularly in NYC.
Google wasn't the first search engine. Apple didn't make the first music player. Facebook wasn't the first social network.
Being unique doesn't matter a single bit. Only thing that matters is that people are using them. And that's the case with Uber. Judge however you will their shady tactics, but it's ridiculous to downplay their success based on that.
Sounds like downplaying success to me. Everything is obvious once it's done.
Not to mention Uber is not the first GPS-based car-hailing app. They were the first ones that were able to gain mass traction - which is an achievement in and of itself, to be certain, but also makes claims that "X cloned Uber" somewhat laughable. If we're going to split hairs about who copied whom, Uber is on the wrong end of that statement.
Gettit is as much a clone of Uber as Androids a clone of iPhone. Not an exact copy, but probably wouldn't be existing without the other paving the path.
Zimride did indeed launch in 2007 as a Facebook based carpooling app. It wasn't real-time at that time. Don't know if/when Zimride built an iPhone app but I built a real-time ridesharing iPhone app in 2008: http://ridecell.com/gt/
Uber started in 2009.
Disclaimer: The company I started, InstantCab, competes directly with Uber.
Taking smartphones and eBay-style ratings and integrating it into a smartphone app is great! But imitators, if they are "cloning" anything, are cloning eBay and car services, not Uber. The combination is extremely useful but ultimately nothing special.