Seoul Moves to Ban Uber, Plans Own App
blogs.wsj.com
blogs.wsj.com
You know, I don't particularly like the "sharing economy" movement. The whole thing seems predicated on deregulation of industries that I honestly think should be regulated.
Airbnb acts, essentially, as a parent company for a hotel chain without any of the actual power or responsibility of the traditional holding company. Uber/Lyft act as car dispatchers without any of the power or responsibility of traditional taxi/limo companies. The ability of these companies to outcompete traditional companies on price in their spaces is due to their choice to not follow regulations as much as possible. The reasoning Uber gives in the article for not being in violation of the law sounds suspiciously like the reasoning given by escorts ("You're paying for my time"). If this trend continues we will see additional disregard for regulation with more and more absurd reasoning ("We aren't breaking the law on regulation because we are simply a technology company that connects your phone with another phone who happens to be in the possession of a guy in a car and whatever happens after that is between two consenting adults"). How far can this race to the bottom go before our search for low costs starts to war with our sense of personal safety and social responsibility?
As an aside, I use Uber pretty regularly in any city where it's available simply because I generally don't have the local taxi numbers. Does this make me a hypocrite? Probably.
As I said, where does our search for low costs end up battling our sense of personal safety and social responsibility?
You mean, like the current laws, which were often written to stop taxi drivers rioting and destroying others' property[1]?
As I said, where does our search for low costs end up battling our sense of personal safety and social responsibility?
What about allowing each person to choose for herself?
In the case of Uber, in particular, the self-regulation they impose is much greater than the regulation that the government does, and accounts for a MUCH higher quality of service than the very heavily regulated taxi cabs. Maybe that doesn't work for every instance or every company, but the crowd-sourcing of relevant data seems, to me, a far more effective solution than the protectionist bureaucracy masquerading as regulation that exists.
Citation needed? There have been numerous stories of Uber drivers and cars not matching expectations.
The people of Korea have spent more than 100 years (since colonialization by Japan in the 1890's) in a struggle for self-determination. Under what kind of logic does the profit of Silicon Valley venture capital trump the interests of the Korean people?
You mean the public is being forced to take Uber rides? That's appalling.
For example, one of the major reasons for taxi regulation is so you don't have to negotiate a fare after flagging down the car. The rate is regulated so you know what it will be before you flag down the taxi, and the regulated meter gives you assurances that you're not being cheated.
This bit of regulation becomes obsolete with an Uber model: if you request an Uber ride with the app, you know you'll be paying Uber prices (and you can even get an estimate in the app IIRC). There is no need to regulate the price because consumers are empowered to do informed comparison shopping prior to the hail.
Regulations should not be imposed on a business who has made the rationale for that regulation obsolete. Other regulations may still be important though.
Before regulation taxis were experts at scamming and scheming their way into higher fares. I'm not sure why you think Uber, who outwardly admits profit is their only motive, won't use similar tricks if it benefits their bottom line. Or any number of similar copy cat services that will arrive if the Uber model finally does replace taxis.
An article in a local Bristol newspaper explaining the effort stated, “drivers will now be expected to use a combination of common sense and courtesy to negotiate the junction of the town’s High Street, Wyndam Way and The Cabstand.”
http://thecityfix.com/blog/naked-streets-without-traffic-lig...
"Removing Roads and Traffic Lights Speeds Urban Travel"
Another kind of anarchy could actually speed travel as well—namely, a counterintuitive traffic design strategy known as shared streets. The practice encourages driver anarchy by removing traffic lights, street markings, and boundaries between the street and sidewalk. Studies conducted in northern Europe, where shared streets are common, point to improved safety and traffic flow.
http://www.scientificamerican.com/article/removing-roads-and...
1. Download the app 2. Enter code LOSANGELES (works nationwide) 3. Request and enjoy your free ride 4. Repeat on another phone to ride again free
That's like saying we should regulate the price of milk because the grocery store cash register might charge you something different than the price you saw on the shelf. There are plenty of consumer protections already in place to punish that kind of deception.
And who's going to spot if the Uber app incorrectly calculates distances, skimming a couple bucks off each rider? This is why taxis have regulations for approved taximeters. That's an existing taxi regulation that clearly should also apply to Uber. Same as how scales used in trade have to be validated.
If this is being used by thousands of riders a day, I would wager it would be spotted fairly quickly. Is there good reason to imagine otherwise?
> An Uber spokesman in Seoul denied that the service was illegal as Uber is “a technology company that connects drivers with passengers” and doesn’t directly run a taxi service with rented cars.
I know they want to claim they're not a (distributed) taxi company but that's what they are; they pay drivers, verify the drivers, help the drivers get insured and connect them with their passengers. That's what a taxi service is. Yes, they don't rent cars, but that is not the defining trait.
If they want to fight an injustice of a system, shouldn't they admit that's what they do -- and be ready for the consequences?
They are there to make money, and if fighting an injustice system is aligned with their goal of making money, they will fihgt. I get the feeling that Uber is idealized, same as Tesla.
However, this "half-fighting" when you criticise the regulations and at the same time you claim you're outside the law because you're just a "service" -- this rubs me the wrong way.
It is this "half-fighting, half-outside" approach that is most evident in corporations. It's similar to corporations dealing with censorship -- everyone, even executives, agree that censorship is a bad thing but the company still wants to make money in China, so they have to obey it and respect it at the same time.
If you're trying to fight an existing, firmly entrenched system, you don't walk up to the front door as early as possible, knock, and say "Hi, I'm here to destroy you." You become as popular as possible as quickly as possible, and then you might have the ability to survive such a challenge.
One notable advantage this gives: if you follow the letter of the law as written, any subsequent change to the law is effectively targeting you specifically, which gives you a substantial amount of high ground to operate from. Assuming you're doing something that people actually want, you're then much more likely to have the general public on your side.
I mostly agree with you but I think the sharing economy is something that needs to happen in a better regulated way. Let's face it, wage growth is stagnant and the only way the average person is able to improve their financial situation is to be more efficient. [e.g. sharing cars, renting out spare rooms, moonlighting as an Uber driver]
My main problem with Uber is the fact it isn't paying the same tax rates to the local government as the Taxi companies.
My main problem with AirBnb is they don't even bother with building an address list to filter out apartment complexes [almost all of which don't allow subleasing in the US] & condos [ditto]. They need to do that and require a copy of the person's lease to be on file with them showing they can sublease, etc.
AirBNB doesn't provide the average renter a way to improve their financial situation in the long run.
For renters in non-regulated units (ie, no rent control/stabilization), if you can make an extra $200/week on AirBNB and your landlord knows it, he or she will simply raise the rent by $800/month the next time your lease is up for renewal. (Or, if he knows this in advance, this becomes the market rate for your initial lease to begin with). This is very easily corroborated by the studies showing that AirBNB led to an increase in rent in several cities (linked in other HN discussions, and also very easy to find elsewhere).
This isn't a statement about AirBNB; it's just basic economics. Absent regulation or other market "stickiness", the money eventually flows to the individual or entity who owns the capital - in this case, the real estate. (The etymology of the word "capitalism" is not coincidental!).
For property owners, the math is different (though still not as good for the owner as one might think).
Please provide evidence that this doesn't happen with normal split leases, normal renting of rooms out to people, using craigslist to rent temporary rooms, and is directly linked to AirBnb. Like many things in life "basic economics" is not "basic" when you have multiple equal solutions that bring about equivalent outcomes.
The same effects happen when people split rent [e.g. they can afford more, on average].
Also? They'd be able to do this without AirBNB and people did for a long time. AirBNB has only increased the supply & demand by making it easier.
Employers arbitaging labor costs across oceans and borders is very effective at slowing the wage growth of the most expensive workers.
Those are the things that let them arbitrage labor costs and they (currently) come with the consent of labor. "Globalization" (in this sense) was not some inevitable force of nature, it was borne out of hard-won policies like NAFTA and CAFTA.
It was like refinancing. In a lot of markets many people couldn't afford a house unless they planned to refinance in a couple years based on price appreciation. With Airbnb the price of apartments will rise to the point where one cannot afford an apartment unless one rents part of it out on Airbnb.
People keep saying this without any real evidence.
People did the same f'n thing with sharing rent, subletting, etc. before. The only difference is they didn't have as easy access to the tourist market. It isn't going to magically reevaluate the prices of all real estate everywhere as long as its legal.
I'm not saying the sharing economy should be stopped, but to believe it will be a net benefit to the working class is a bit naive in my opinion.
Uber is a great business, but it's not sharing anything. It's a bunch of contractors and a communication network. If you are paying for the service it is not sharing, is it?
The marketing coup of modern web companies is to make us think that relying on centralized code out of our control embodies this spirit, and is thus the future.
This involves downplaying these companies' powerful (and lucrative) roles, by making people focus only on what they facilitate. Thus, it makes perfect sense why the industry brands itself as "sharing" based - it makes you think about the interactions between participants, and ignore the cut going to the new middlemen.
Yes, it is. In sharing there is no implication that it is for free, "to share" means simply "to use or enjoy something jointly or in turns."
E.g., I've found both Uber and Lyft drivers in SF to be way better than cab drivers. I've had cab drivers that seemed visibly high, stopped to open their door and cat-call women, etc. -- nothing like this has ever happened in Lyft or Uber for me, and it would be very unlikely, because a driver that did that would get low reviews and be kicked off the service very quickly.
The drivers I've talked too have been really happy with the services too. It seems much more equitable and less exploitative than the standard cab setup.
(Something like Airbnb seems much more a mix of good and bad.)
As far as people want to give up state-"guaranteed" safety for a better price. The state shouldn't have any saying in how ready I am to take risks. Who is the state to tell me in whose car I sit to go from A to B? In this particular case, the state is only a hinderance for the market to adjust to the personal needs of people.
Harp about personal freedom and responsibility of the state all you want, but the regulation is for people that don't know the area and could get hurt by stepping into the wrong car. Because when the day occurs that a tourist is kidnapped or hurt because of this service, it will ruin the local industry. Uber may not care about the locals once it is sufficiently global (what's one city?), but the municipality does and this is precisely the reason why they're stepping in.
Regulations are not magic, they can't tell if someone is a rapist. All they can do is check the criminal records, which Uber also does[1].
Uber may do the checks voluntarily, but having no regulation means you wish for a company that can refuse to do so.
You say that like it's a bad thing.
Airbnb is more difficult. Evaluation doesn't replace regulation as easily in this case - I'm unlikely to pay that much attention to, say, fire safety unless I've experienced fire problems in the past. There's also much bigger externalities - for other residents in the same building as an Airbnb let, for example.
In Chicago they ran a service called UberTaxi. You'd get a regulated Chicago taxi and you'd pay the regulated rates.
The app and payment is the true innovation. Skirting local regulations by hiring out contractors isn't innovation.
The regulations are often a burden on the taxi drivers for the good of the public. Of course you can beat their prices if you don't have to follow. That's not competition.
What the hell does it matter what the innovation is? We're not talking about including Uber as a subject in business class; we're talking about its relationship to governments.
As far as Uber is concerned, though, the hard part of their business IS skirting local regulations. Their core competence is not running a payment system - it's being able to lobby successfully to enter protected markets where other taxi companies couldn't. Once they've got first mover advantage the network effect takes over.
The only significant regulation affecting price that Uber carefully avoids is the limit on the number of taxi "medallions" issued. If you're in favor of regulating that industry, could you explain how a limit on taxi medallions is in any way good for taxi passengers?
This is not good for any one particular person trying to get a cab.
However, it is good for the total traffic situation in the city. If there were a significantly greater number of taxis, gridlock would be all but unavoidable. Then no one could take a taxi anywhere.
It's one of those situations where the negative eternality is felt a tiny bit by everyone, so the regulation needs to take that into account.
I'm not saying we have the perfect scheme - if we did congestion pricing would be higher, street parking prices would be way higher - but there is actually a rationale behind it. Most of the people are hyper focused on the rider/driver interaction, but there is a bigger city wide transit question in play that is often ignored.
Yet another case where technology has improved on an older solution built by legal means alone.
If you've never been to Korea, one thing that pops out immediately is the uniformly very high level of service quality nearly everywhere as compared to the U.S. or Europe. You can already order just about anything you can imagine to be personally delivered just about anywhere you are for next to nothing.
Taxis there are similar and the prices are so low it's a wonder that the drivers can even feed themselves. The fares barely seem to cover the cost of fuel.
I've never had a taxi show up late when I called for one, and there are so many you can usually hail one almost on demand. The taxis are always clean, unlike NYC. More importantly, the number of stories I've heard of drunk people leaving purses or phones behind, and having them returned the next day, is remarkable.
Sure you get the occasional surly driver, and language can be a problem, but that's anywhere, even with Uber drivers. And for $10-15 a ride across most of the city, Uber isn't pushing down anybody's prices.
If there's one place that can revolutionize their own taxi service and offer on-demand pickup via apps, it's going to be Seoul.
Uber's statement about Seoul is garbage. If there's an example of a modern, efficient, "smart" city, anywhere on the planet, it's there. Compared to London and D.C. at least, transport in Seoul is one of the best planned utopian paradises you can imagine and it gets remarkably better every year. The Seoul city government is right to crush it out of existence.
I'd be highly surprised if they were ever allowed to operate. If Uber was allowed to go, I'd imagine some kind of tight regulation or high taxes on Uber service to make it less competitive than the normal service.
Number of cabs in NYC: ~14,000 (population 8.5 mil)
Number of cabs in Seoul: ~70,000 (population 10 mil)
Uber complains about regulation all the time, but I feel like much of their market was created by the same bad policies it rallies against.
Their argument is for a 'Sharing economy' including features like swarm pricing.
I'm not sure if anyone in Korea would pay the premiums that people pay in NYC/SF, especially if taxis get a comparable app.
For some tiers, drivers have to have 5-10 years of accident free driving - in Seoul that's remarkable.
Here's an example fare: $2.50 to pickup and go 2km, about $.70 a km after. Gangnam to Gyeongbokgung palace (across most of the city and over a major river) will run you about $15.
A trip from Brooklyn to Harlem, about the same distance and complexity, is likely to run $30-40. Uber will run you $40-50.
Here's a relatively good list of costs in Korea.
$1 ~ 1,000 Won.
For example, in London, Black Cabs are generally considered decent but expensive, so Uber is priced cheaper than black cabs, but slightly more expensive than mini cabs.
In Delhi, the prices are far higher than anything you can hail on the street, but cheaper than calling a town car service.
Uber wants to skirt all around that and rely on crowd sourced reviews to ferret out drivers and unscrupulous fare charging.
Can the average Seoul taxi driver be grumpy? Sure. On Uber that would get him bad reviews and get him kicked out. But average Seoul taxi guy also has more than 3/4 of a million safe driving miles on him as well.
It's also hard to explain, but unlike NYC style taxis, which are grimy and uncomfortable, Seoul drivers actually keep their cars clean and well serviced.
I'd argue that the main reason that the Seoul city government wants to keep Uber out (in favor of a domestic service analog) is that it keeps money patriated and in domestic industries. 0% of the money taxis operate off of leaves Korea. While with Uber, some percentage is likely to.
Years later, a friend back home explained that most of these taxi drivers (who were men in their 50's) were the deadweight that got laid off from Chaebol corporations back during the Asian Financial Crisis. These guys resent their new occupations and have the shitty attitudes to show it.
Anyone know where we can get this statement? Taken out of context (which is most likely was), this reads like Uber is just a bunch of whiney rich kids and makes me like Uber less. I presume they would write something that talks about the economics of Uber for a city like Seoul. For example, saying Seoul can leverage existing technology (drive costs down) and increase economics (more people in the city and more jobs for drivers).
I'm not sure any definition of a taxi service requires renting cars.
It just requires connecting vehicles to passengers, at a time and place the passenger defines.
Uber don't half come out with some rubbish when they're trying to skirt around some narrowly worded local policy or law.
Anytime I've read about Uber or the few times I've used it myself it is much more expensive than a taxi. They aren't coming in to drive fare prices down.
That being said, I have to say I'm impressed/shocked/in awe of their respective strategies. One of their biggest innovations isn't necessarily their use of tech (which is huge of course), but the adoption of their regulatory strategy, which is basically:
"Screw the law. We'll do what we want, get people to love us, then appeal to the masses / out-lobby the politicians when the governments attempt to enforce the law"
I bet most attempts to start AirBNB/UberX/Lyft (in their current form) would have been met by "Sure, great idea, but it's totally against the law, and you'll get shut down." And that would have stopped most people.
So, I suppose, kudos to the respective founders for taking a different (and bolder) approach. Like it or not, it seems to be working through sheer brute force.
I think the true innovation of the sharing economy is using technology to scale up these trust networks with rating and reviews to the level required by a modern city. These mechanisms have of course been known for a long time in the internet, but sharing economy realized its full value for renting and sharing rather recently.
I don't know what the state of labor unions is in South Korea, but I think the reason why an app described as such is typically discouraged in municipalities is because the ratings systems could be seen by the union as unfairly punitive or arbitrarily gamed...similar to the protest some teachers unions have against testing schemes and bonus pay for meeting benchmarks.
And of course, doesn't the Uber app allow drivers to see the ratings of various passengers?
An app that would show real-time location and other info about cabs, as well as being able to hail them, would be very nice for any taxi system. I'd think it's the other stuff, such as ratings, that could only be palatable by drivers and users under a privatized context.
SK, Samsung, Daum, and Naver.
I went to BeLaunch conference in 2013 (similar to TC Disrupt in U.S.), and a person from SK came up to our booth and started taking down notes.
4 weeks later, they launch the exact same product.
And not some made up "protecting the consumer" argument.
"South Korea’s capital city said on July 21, 2014 it planned to ban the smartphone car-hailing service Uber, saying it raised passenger safety issues and threatened the livelihood of licensed taxi drivers."