dw.de
In most European cities, taxi companies are small, almost mom-and-pop entities with anywhere between one and say twenty taxis. In fact where I am living now I can call 4-5 different ones all in my vicinity. If there was an app that consolidated the booking process for those - awesome!
But why would there have to be a company that owns the market globally - from Karachi to Karlsruhe, from Amsterdam to New York, taking 20%, killing competition by it's pure überstrong market presence, brand and financial backing.
The same people that hate Comcast for oligolopolizing it's market (and hence using it's almost-monopoly powers for their benefit) yet somehow wish Uber would succeed and take over the market around the world. Why? Because it's a hip SF 'startup' (if you can still call an entity with $1,500,000,000 in funding a startup)?
In many cases (in USA at least) the industry is already a monopoly as it is. Uber is coming in and offering an alternative which is way better than the current yellow cab system. In many cities in America, getting a cab at 2am after the bars get out is nearly impossible due to demand, so you end up walking a few miles home because it's quicker than waiting around for a cab. Uber and Lyft have largely changed that. Furthermore, I don't think that there is some strong allegiance to Uber or anything, it's just the largest company of it's type now. I quite enjoy and use Lyft as well, and would definitely be open to anybody else who wants to enter the market.
Taxi companies may be small mom and pop businesses in some areas, but in most large cities in the USA, they are breaking the monopoly, not creating it.
Also note, even in the bay area, that once you leave the Big City limits the cab companies quickly become small business and not the monopolies we easily blame things on. It's those companies that are getting murdered and shit poured on them unfairly.
To the extent people "hate insular millennial techies", it is mostly because certain segments of the media tell them to. See eg. http://pando.com/2013/12/26/look-whos-gawking-inside-nick-de....
Whether or not Uber is "more" of a monopoly in some regions than the incumbent(s) is irrelevant.
whether due to availability at peak times,
In New York, it's not just techies using this.
It's also a pretty great alternative to driving drunk, which people end up resorting to when there is a lack of cabs and public transportation in an area. (Obviously not New York, but Uber would be great in a place like Dallas.)
If something can be "murdered" by mere criticism, then it deserves to be "murdered".
I'm happy if all the Taxi companies die because they aren't providing good service. Uber and clones let you tap a couple times on an app, know instantly without asking anyone if there are cars in the area because you see them on the map, and then watch the cab come to you on the map. If the driver has trouble finding you they call you. Then at the end payment is all automatic, you just get out.
And Uber solved that problem. For it's local market. The thing is - why would it have to 'disrupt' markets that don't really need disruption or solve problems in markets where those don't really exist? Yet with it's enormous funding and hence market power it can take over markets around the globe, where the dude trying to make a living with his 5-cab taxi company or the student driving his one cab on his own can never even remotely compete.
Cab switch over hour sucks, but I've also been in a busy parts of Manhattan with plenty of Uber cars showing on the app yet can't get an Uber car to my location.
I've also noticed a drastic decline in the state of UberX vehicles in the past few months (I assumer from their aggressive recruiting effort). Used to be every UberX that picked me up was very clean and typically nicer cars (occasionally getting picked up by Range Rovers or Town Cars). Now quite a few of the cars are messier/dirtier than any cab I've ever been in.
I'll continue to use Uber and UberX when convenient, but I've cut back quite a bit because the drop in quality.
Now a system that combines the desired properties of the old system with better efficiency is certainly thinkable and desirable, but Uber is not that system, at least not in it's current incarnation.
How would you feel if your taxi driver told you: "oh sorry Sir - you want to drive home? Today that'll be 5 times as much as usual. We are kinda busy, ya know". Unthinkable for taxis. Accepting for the 'disruptor'. All but very rich people would rather wait a few minutes longer to get a taxi than to pay up to 5x as much as usual.
They haven't only closed the doors for Uber, they have prohibited Uber and any other potential competition. Thus, perpetuating a cartel with huge entry costs.
Uber's prices are competitive and they are allowing potentially anybody to become a driver, hugely increasing supply. The service they offer is much better than that of a Taxi; no Uber driver has ever tried to trick me or gotten lost. On top of that, if the 20% cut that they take is too much, don't worry, competition will show up.
Really, Uber's "monopoly" is a momentary phase and any regulator should be able to see this.
The key difference being that in germany at least, there is no such thing as a cartel with huge entry costs. You'll need a properly licensed car, commercial insurance and a special drivers license that costs about 250 EUR plus a few weeks learning. (my uncle got his license in a week while at the same time going to university). Then you can be a regular limo-for-hire driver. If you want a step up and become a cab owner, you need to paint you car white and spend a few hundred euros for the license (don't have the exact numbers ready) and fill in some forms. Then you're a cab company. Everyone who wants to in Berlin can be a cab driver. Used to be a typical student job and there's still a lot. There's no lack of supply. It's not like in NY where you pay a million USD for a medallion.
Frankly it didn't translate so well in many other international markets. The Germany example is a great one where tons of small taxi cos co-exist peacefully. Many other markets like Turkey are the same.
But even if you have large established companies, that isn't always such a bad thing that needs 'disruption'. I had a 50SGD coupon to try Uber (Black) in Singapore last year when I was at a conference. I took a Comfort Taxi to the conference (booked via app, taxi arrival 3-4 mins, took me straight to the right hall of the conference center in 20 mins. Cost about 18SGD) and then took Uber back to downtown. Uber ended up costing me over 70 SGD (i.e. even with the 50SGD coupon it was more expensive than the taxi). I had to wait 15 mins for it to show up (the app showed 5 mins away, but the driver drove in circles and couldn't find my location even with GPS, driver barely spoke English, driver didn't know one of the main streets downtown that I was going to, so I had to direct him). You can book taxis via phone, SMS, web or app. They are cheaper than Uber. Taxis are clean, regulated, always use meters, accept NETS and Credit Cards and if you want a nicer one you can get a Chrysler or Daimler for a little extra fee. Nationally regulated 'surge pricing' exists too.
And the reason for why they interfere in such a way is that taxis are considered a mode of public transportation, which was declared at some point a county issue.
Thanks to that we also don't have that mess of three different types of uncoordinated local railway and bus systems that the bay area "enjoys".
(not Xylakant but in general:) Please don't assume your third world style problems also apply to everyone else. (like Uber and their fans do with that endless "taxi mafia" nonsense)
Actually you need a cab license to drive a cab in most german cities. And the number of these licenses is limited by the city. While the German taxi system is in dire need of a reform most people believe Uber is not the answer.
Anyone can get a taxi license as long as they fulfil some (basic, really) conditions.
To get the taxi license you have to show that you and your car are fit to drive and that you probably will not cause too much damage in the process. That means taking exams, regularly having your car checked (there is a difference between checks for commercial and non-commercial vehicles here) and having insurance that lives up to German standards (an insurance that pays 1 000 000 $ per accident like the one shown on that certificate of Uber's is a joke).
Not that significant a barrier but it keeps out the duds and the crazy. The whole process is easy enough so that supply well meets or exceeds demand in most German cities, even at strange times of day. Maybe Uber is too stupid? I don't think so...
Uber does not want any of that. They only want to have a clear path for the race to the bottom. They do not care about safe transportation, just about their bottom line (I would, too, if I had raised that amount of capital for what is basically a phone app). That's ok, they are for-profit, this is what they're here for. The Frankfurt court has done what it is there for. It has told them that, while rules are in place, they need to be followed. Uber had plenty of time to prove to authorities that they are OK guys. They didn't. They are not "disruptors". By not following regulations, they are, most probably, simply breaking the law and competing unfairly.
Of course you can be cheaper if you skip the background check, driving test and reliable insurance.
The service affected here is UberPop that allows any private person to use their private car with domestic insurance to pick up people and transport them commercially. Uber has decided that this is the market they want, but that's just not legal in germany. Private persons that want to just earn a little on the side won't spend the time and money to pass the test and get commercial insurance. Since UberPop targets private persons it's also an invitation to tax evasion, but that's a different issue.
Uber could restrict themselves to the legal business model but have chosen not to.
There is a barrier here and it separates the people that want to be professional drivers from the non-professionals. The professionals are allowed to transport people for commercial motives, the non-professionals are not. This separation exists in a lot of areas, for example when producing and selling food, construction work etc. If I want to provide a professional service that has an associated risk, I must pass some certification that shows I at least roughly know what I'm doing.
Because frankly there are tons of cities around the world where the 'mafia' sort of business you describe is NOT who owns taxi companies. I haven't seen a statistic outlining in which parts of the globe taxi 'mafias' own the majority of a market vs small-business owners. Have you? Please share.
Anyway, sorry for the long answer. I currently work to one of the major ride sharing companies (I won't mention which one but this time I'm working with private drivers instead of actual taxis), and I'd love to share some of the stats we often have access to but it's obviously confidential...
If they run taxis out of business by stealing the cash cow of inner city rides but don't replace that somehow then that'd be the worst kind of disruption - disrupting the customer in a horrible way.
And if you're in the inner city and get the better service from Uber nobody can blame you for using it. But I can definitely see why regulators have genuine concerns around the people served by taxis who won't be worth ubers time.
So you would like to increase competition by preventing Uber from competing?
If their business model is illegal in Germany, tough luck - consulting a lawyer before launching a large-scale business operation is generally considered a good idea.
Hailo?
Those small taxi organisations who are defending their market share in Germany right now do that not by better service or lower prices but by lobbying through their state protected cartells.
This causes German taxis to be awful. Often they want to talk to you, are dirty, expensive and play poor people pop on interrupting volume.
Uber says there is a surplus, people driving cars with empty seats, and they attempt to capture that surplus. From an economic point-of-view that is a good argument. The surplus undeniably exists, and it would be beneficial to reduce it.
The argument on the other side is that this is an issue of public policy. Various countries have decided it is beneficial to legislate people driving strangers in exchange for money. The general arguments are ones of safety, but quality of service also comes into it. Again this is a reasonable argument. There is an information asymmetry when hiring a taxi (I don't know what kind of driver I'm going to get) so legislation reduces that.
The main point seems to be who gets to decide public policy? Uber and "Silicon Valley" types believe that private individuals and companies should be allowed to set public policy. Most others reject this.
The next argument is whether current legislation is appropriate and whether Uber has sufficient features to make existing legislation unnecessary. E.g. are ratings and ubiquitous GPS sufficient to reduce information asymmetry. If Uber wants to engage in this argument it should use the usual methods of setting public policy. I don't know if Uber has started any court cases but I expect they will be involved in some soon if not already, and this is one way to effect public policy.
What doesn't work is to pretend that laws don't exist, and pissing off regulators. That will also make hacks like the above much less likely to work for Uber because that requires some minimum amount of goodwill (given that it is a hack)...
We have laws for everything (as Xylakant succintly stated), but they usually also come with way to thread in new ideas. However, screaming "DISRUPTION!!!1" all the time just isn't good enough here.
That actually seems to have worked OK to a large extent for the likes of Uber and Airbnb. If they had complied with every existing regulation out there they never would have got off the ground. Whereas going ahead and just launching it is hard for regulators to stop the whole thing if it has wide spread adoption and is popular.
People who use some Uber service and appreciate it are more likely to speak out to their leaders asking why the law is preventing this useful thing that they have seen, used, and appreciated. Does this help more than it annoys the people who would change things?
Taxi companies exist on a county level in Germany, Uber is global. That's also reflected in cash and revenue and will at some point reflect in lobbying capability.
If anyone in this game is a bully, it's Uber.
That's not what got Uber in trouble. Ride-sharing is extremely well-developed in Germany (it's called mitfahrgelegenheit, extremely popular, mostly for longer trips between cities), and it's probably not illegal. Uber, however, was/is operating a taxi company (admittedly, ride-sharing is much less useful within cities, because there is a much lower chance of someone going exactly where you need to go, exactly when you want to go).
This is actually not what Uber says. Ride-Sharing would be fully valid as long as the fee paid is lower than the cost for the car owner. It's specifically exempt from the law. However, the fee that Uber proposes is far above the accepted costs per kilometer (it's roughly 1 EUR, while the accepted costs are roughly 30cent), so they don't qualify. There's a german startup (Wundercar) that tries to capture specifically that market and they just reduced their prices in response to a similar injunction.
I meant in the general sense that their business model is based on exploiting this surplus. It is their value proposition, if you like.
We have laws for everything.
https://translate.google.de/translate?sl=auto&tl=en&js=y&pre...
now thats a sensible policy...
But there is no surplus in UberBlack, UberPop, UberX.
The surplus, ride sharing, exists only in UberPool.
Why? Because the surplus, as you argue, is: there is a driver who wants to go from A to B. I need a trip from C to D and it happens, that C and D is along the ride of A to B, or even match with A and B. That is called ride sharing. That is nothing new. This kind of business exists in Germany for years. There are also nice Apps that integrate with your navigations system, like http://flinc.org
But what Uber offers with Uber{Black|Pop|X} is not a ride sharing. I still want to go from C to D. But there is no driver who wants to go from A to B. There is only a driver who wants to make some money. So the driver may come from A to pick me up at C. But after D, the driver is either going back to A or will pick up another client. This no ride sharing. Without me as the client, the drive would not have taken place in the first place. So there is no surplus.
That is the distinguishing element between business and ride sharing.
Not true. A lot of UberX drivers use cars that would otherwise be sitting in a garage. It may not be ride sharing, but it's still a type of car sharing.
Such surpluses are typically addressed in other ways (greenwheels for instance).
But what are the usual methods of setting public policy? It's only very rarely running for political office and making carefully thought out arguments and finally winning a vote.
Civil disobedience and activism have a long and proud tradition of pushing the rules, bending them and sometimes breaking them. Famously, Rosa Parks was a private individual who sought to be allowed to set public policy, rather away from the "the usual methods".
Obviously, Uber isn't even in the same league as the civil rights battle, but your expectations of what the "usual methods" are is wrong.
Also, on the other hand, taxis are already conveniences for the relatively well off and trying to tie in the regulations of the taxi industry with high-brow "public policy" like clean air policies or even "regular" public transport etc. is equally not in the same league.
Obviously, Uber isn't even in the same league as the civil rights battle, but your expectations of what the "usual methods" are is wrong."
Come on. Even with your line attempting to clarify your first statement it's one of the most idiotic things I've seen today. Uber is a private company. They aren't activists. They aren't citizens of the country trying to get a fair shake. And they certainly aren't anything like Rosa Parks. They don't like the rules that are in place. The people of Germany should be the ones that get to decide whether or not the rules should be changed, not Uber.
You don't get to decide who are activists based on whether you agree with them. Activism literally just means "doing something". And the drivers and passengers that use Uber/want to use Uber are very much citizens trying to get a fair shake. The people of Germany will be the one deciding, but - and here comes the actual point: such decisions are never made in a vacuum. Rules and regulations are made in response to circumstances in the real world changing, not the other way around. The emergence of Uber (and Lyft and plenty more) is the real world changing.
They have no interest in making it easy for Lyft (as they have repeatedly shown), or for licensed taxi drivers that are required by their license to cover the whole county, or for the people living in somewhat remote (but affordable) areas that won't benefit because no Uber driver wants to drive there without a surging incentive.
As soon as they can, they'll use their war chest to lobby harder than German taxi companies could ever do. And they won't do it for the general public's benefit and they won't do it "for the taxi drivers".
Lobbying is not a déformation professionnelle of taxi company bosses, but of people with money. In this case this means: Uber, not the taxis.
We don't need to import every flawed idea from overseas, and establishing a new monopoly where there's now a certain amount of (regulated) competition certainly belongs in that category.
Personally, I place civil disobedience as a last resort method. The most prominent recent case of civil disobedience is, of course, Snowden. He did something illegal in the hope of changing the current legal status quo.
A billion dollar company funded by Wall Street trying to gobble up and lock down an entire global market through unethical fraud and shirking their tax and legal liability is a repulsive invocation of civil disobedience. I hope you will think about what you've posted and feel suitably shamed.
Am I, as a human being on this planet free?
In that context, shouldn't I be able to exercise my option to make choices such as whether I want to use a government-sanctioned transportation service or pay an equally free individual for transportation services.
Both kinds of services get to make me an offer and I chose, not government, I. If the government-sanctioned service is so good surely I will chose that service over anything else that might be offered.
I am sick and tired of government restricting my options because they think they know what is good for me. More often than not government has the opposite effect, on that can be highly destructive over the long term and one filled with individuals making decisions out of utter ignorance and a need to control, not serve.
Freedom.
The sad thing is that the obsession with control has real, measurable, and detrimental results. Uber lowers the DUI rates in every city its been introduced? but it doesn't have licenses that are limited by the state, ban them!
Why is this about information asymmetry? The driver also doesn't know what kind of passenger they get.
I think that regulation of taxi & public transport and/or the survival of these regulations post 1980s is a product of problems in that industry. The Taxi market often develops pathologies. Safety issues. Ripoffs (specially tourists). Congestion. etc. Those problems are real.
But… Uber solves or can love many of those problem just as well as regulation. Safety is improved because there is a record of everything. The ripoff/bad service caused by lack of repeat business is mitigated by the reputation system. They specialize in solving congestion problems with their supply-demand stuff.
The regulations just aren't needed to regulate what is sometimes called 'black cabs.' The fact that they compete with flag down taxis is irrelevant. These problems are not acute for this kind of service and forcing Uber to comply is not helpful.
Insurance, licensing, permuting & such are unsolved problems. Uber might be able to work out the insurance at some point. But.. these are more artificial problems, artifacts of the regulation as much as they are regulations there to solve a problem. Regulatory authorities should work to fix these themselves, to enable new kinds of services.
Uber puts more power into the hands of consumers. If this removes some of the need for industry regulation, industry regulation needs to adapt.
http://docs.dpaq.de/7814-beschluss-landgericht-ffm_uber-taxi...
It's (obviously) in German.
The fines are 250K per violation, Uber has already announced they will fight this.
Uber is looking for a communications lead in Germany: https://www.uber.com/jobs/18835 , they'll definitely be needing that and more.
Deutsche Welle has it here (in English):
http://www.dw.de/smartphone-app-uber-ordered-to-halt-transpo...
edit: thanks!
I like that Taxi companies need to have extra insurance and the cars and drivers are checked on a regular basis. Just like the TÜV (a mandatory checkup every two years for every vehicle) makes sure all vehicles have functioning lights, brakes, proper tires etc.
This ruling only makes sure Uber follows those same rules other transportation businesses follow as well. There is competition in the transportation business here but there is no room for people sidestepping completely sane rules everybody should agree on.
I am in no way affiliated with the taxi business and i like lower fares too. But not at the cost of safety and less checks for cars and drivers.
Once Uber agrees to comply i am happy to use their app and their drivers. I doubt they will be able to operate much cheaper though - i am fine with that.
If regulations in Silicon Valley (or wherever else) allow Uber business model to be sustainable, good for them. This isn't something obvious when you go international and it is part of the challenge. Simply not giving a fuck is just mediocre and you deserve to cease operations. Period.
Me personally, I think I would rather prefer purchasing a regular Taxi ride by an official Taxi company. Even if it did cost more (which, again, it doesn't really), for that money I pay extra, I get some of the additional guarantees like maintained cars, garanteed-insured drivers and quicker travel (official taxis are allowed to use special lanes reserved for buses and taxis, something Uber would never get away with).
In a country that's not as price-sensitive and where regulations already provide some clear additional benefits for official Taxis, I think there's potential for both Uber (fewer guarantees, no permission to use special lanes, but cheaper) and official Taxis.
I really don't see what the fuss is about, in this context. If it were actually much cheaper then yeah sure, but as it stands they're not really much competition for cabs. Especially considering their attempts to circumvent safety regulations.
Add onto that the ease-of-use and some level of assurance that if your cabbie takes you round the houses you can get a refund and it's a no brainer round here.
For the record, all the drivers I've spoken to have worked for a local company beforehand and, while earning about the same amount, are far happier now.
Late at night when the roads are relatively empty, the black cab is still damn efficient at moving you from A-B cheaply. The key is to be moving fast and not get stuck in traffic.
When there is traffic, then the minicab that doesn't meter the fare depending on time... solely distance... proves to be the cheapest. These are nearly all small, local firms, so your mileage on price may vary.
Uber do work out cheaper for the non-perfect conditions that tend to exist most of the time... some traffic, some speed.
What would be good is an app that polls Hailo, Uber, Lyft and some local firms and gives you the cheaper of all options.
But then, you know this is a race to the bottom, and service will eventually suffer if people buy purely because of price.
There are different Uber products that come with varying prices. In Sydney, I can make a trip with UberX (regular ride sharing) that's $10, or with UberBlack (licensed hire car operators) which would be $30 to $40.
UberX is definitely about 20% cheaper than taxis here in Sydney.
Not anecdotes like "Uber driver did X" - I'm sure for each such anecdote one can find "taxi driver did X" but real data on the scale of Germany - or any other scale like this?
https://www.google.co.jp/search?client=safari&rls=en&q=uber+...
As for the service quality etc, with Uber I guess people will have to have experienced a poor driver and leave a poor rating. I think it's a matter of time before people with crappy cars start driving for Uber, get into accidents or create generally unpleasant experiences for some users, and drop Uber's reputation downwards.
So yes, there's evidence that Uber is less safe. Not in the 'drivers are reckless' or 'vehicles are crashing a lot' sense, but in the 'someone covers your .. behind' sense.
Such an accident may could happen, but then according to the German requirements it would be properly insured.
Taxis are a joke, there are regular complaints about credit card skimming (including myself!) and reports of unsafe driving, sexual harassment and refusals to accept rides if not in the driver's best interest.
One thing that confuses me a bit - isn't Uber in Europe focusing on professional limousine drivers? Shouldn't they be checked®ulated anyhow?
It's understandable that something like UberX wouldn't work in countries like in the SW/A/G area. We have those regulations in place for good reasons. I am sure they will find ways to comply.
ps: sorry for writing sw/a/g for switzerland/austria/germany - instead of the german d/a/ch - as soon as it's in your head you can't get it out there anymore. ;)
Which is exactly the reason they got sued by the association.
its like 30% of the taxi drivers are pure assholes in berlin/hamburg. (heck its not so different in other big international cities).
I had hundred of uber drives and not a single bad or even sub-optimal ride.
Thus I very strongly disagree with your statement.
On a side note, taxi stuff works like a mafia - a "legal" version of it. The regulations enforces that - not the safety of anybody.
So the way to do it is to follow regulations first and then find a way to 'disrupt'. Yes, that might slow down the growth. Thats probably why they chose to ignore it and that's why now the state is hitting them back.
Actually this is business as usual. Uber will continue to fight the decision, a compromise will be found and the prices will go down, which is good for the customer.
Maybe it makes you happy, but is it necessary? I doubt that it is. It seems like regulation for very little purpose. Accidents due to brake failure are exceedingly rare, and police will see if your lights are out (more frequently than once every two years).
Shouldn't regulation should be about more than warm fuzzy feelings?
I worked on cars a lot, old ones, newer ones and everything in between (oldest: 1961 Mini, newest, my VW bus from 2007).
Cars that are used more frequently and that do lots of stops/starts wear faster and tend to fail more frequently than cars that are used infrequently (within limits, letting a car sit for years and then using it is also not good).
Typical wear items: boots, joints, brakes (pads/discs), clutch, handbrake, steering housing and associated items (tie rod ends!), all consumables (including fluids, filters), lights (police telling you your lights are out is too late), safety belts, structural elements (rust, badly repaired accident damage) and on and on.
Having those inspected more frequently when you operate a car (many taxis are operated in shifts and I don't see any reason why uberpop drivers could not share a car for maximum profits) for the purpose of transporting passengers is in my opinion not a luxury.
On occasion I go by cab here in Romania and I'm always very happy to be alive at my destination, the number and severity of accidents involving cabs here is simply scary.
Give me German regulated cabs any time over the cabs here, possibly Uber could improve on that but I'm sceptical about what Uber pop would look like here.
But not only that, if you have holes in your exhaust and it makes awful noises, you need to fix it. If the rubbers on your windshield wipers is in a bad condition, you need to fix them. If certain parts of your suspension or the steering mechanics wiggle and wobble, you need to fix them.
After each 2-year check you have a certain time to get your car fixed. After everything is fixed, you'll get some kind of license plate sticker with the next TÜV-expiration date (very hard to copy). The Police will check those stickers regulary (if they see your car) and if it's invalid they'll stop you and you have to pay a big fee.
IMHO this is a good thing. Sure there are some stupid rules in place, but overall it makes the streets safer. And if you look at german roads, most cars are in perfect condition, even the older ones.
And as someone mentioned before, those rules are even harder enforeced on transportation companies or taxi drivers.
Shouldn't regulation should be about more than warm fuzzy feelings?
In this case the regulation determines streetworthyness of a vehicle, which is considered part of public transport infrastructure.
I, for one, rather get a cab, which is regularly checked and safe to be driven.
Would you suggest that Ryan Air, since they are the cheapest airline far and wide, should flout regulation, which aims at ensuring the airworthyness of their fleet, so that they can offer cheap tickets?
So yes it is 'Deutsche Welle'
This is demonstrated by the fact that in London, they simply went out and got the PHV license, and made sure the vehicles comply (checks every 6 months, public liability insurance, etc.) - if they did this in every other market, no problem.
The issue is that isn't a very sexy business. It's not "disruptive" like car pooling.
And in some markets, the cost of complying with the regulations is extremely high.
Even in London, it's been argued that the app in the car is a meter, and therefore breaches legislation relating to metered trips: only black cab drivers are allowed to meter, and the regulation bar there is much, much higher in part because those drivers are free to just pick people up off the street without pre-booking.
It seems to me that they should either focus on ride-sharing and get out of the private hire business, or they should focus on the private hire business and do it properly.
The regulations around private hire are not some idiot state actors nannying around: in London they have evolved over centuries. Literally. They are constantly reviewed, and London has an incredibly diverse and active PHV market with many innovators (Addison Lee, Hailo, Kabbee, etc.) improving things in regards to customer choice.
I prefer the Taxi (and my employer would not allow Uber in the first place), because of insurance and other minimum standards demanded by regulation (federal, country and town (via concessions)).
So I see a conflict, that is not just about Uber, but about the working conditions and the income in general. If Uber is allowed to work at lower limitations than the Taxi businesses, it will be a distortion of competition. It would make more Taxi companies to go out of business, which already struggle to keep their business and to pay their employes wages above the minimum (today and 2015).
So yes! Uber drivers must maintain the same standards as Taxi businesses, if they offer a commercial service.
Let's stop talking about "competition". The issue here is "the regulations". Are they too broad? Or too narrow? Or ineffective? Or inadequate? Or just fine?
It Uber is allowed to work at lower limitations than the Taxi businesses, then either the Taxi business is too regulated (then some regulations should be dropped) or Uber is taking shortcuts somewhere damaging the costumers or the workers (the reason why the regulations exist in the first place).
I think that, if the current regulations are justified (and this is to be seen place by place), then there is no other outcome other than Uber becoming simply yet another Taxi company, maybe the one with the nicest website.
Btw. I think the business is regulated fairly. The income is not. Most difficulties are with the concessions and the natural oligopols around them.
Ignoring the rest of the debate, there's nothing that says that the current taxi companies should always be around. Competition means companies go out of business too. Sometimes things change and what was once an optimal number of taxi companies is now too many.
One of the nice things about some countries in Europe is that there are systems in place to protect workers when that happens. That's as it should be: protect the people, but not the company. Italy gets this completely backward in a lot of cases - they'll try and keep a company afloat to "protect jobs", and it just makes things worse and worse.
He's not just talking about protecting existing jobs, he's talking about an existing regulated market that bends to meet standards that are dictated for financial and safety. Uber came in and ignored those regulations.
Those companies have insurance, which means he can use them in his business, and Uber he cannot use because they are not operating within the legal framework. If the taxi companies all go out of business, where will the law abiding business customers that need to work with insured vendors all go? There is a reason for the legal framework to exist, and it's not only to protect existing entrenched business interests.
There are a lot to both sides - it's a big, complex debate. I wanted to focus on one thing I felt was not a good argument at all.
I'm curious how they'll do that. They already said that in the Hamburg and Berlin case, but those were administrative decisions where an appeal blocks the injunction until a court decides. This time it's a preliminary injunction from a court, where an appeal has no delaying effect. The injunction can be enforced. The fines are also much much higher - in Hamburg it was a measly 1000 EUR per violation, this time it's 250 kEUR per violation or up to 6 month in prison for the CEO.
Not a reference I like to see and not related to the topic at hand. Certainly not funny.
Yay, downvotes. For the people that "Don't Get It": That funny guy is basically referring to the first line of the 'Deutschlandlied' - the source of the German national anthem. Thing is, while we kept the third (and just the third) verse as our national anthem, the reference above and the complete first verse, is really just associated with Nazi idiots (it was the only verse used THEN and is still part of their propaganda, plus it's the most silly line ever - even without that heritage it would be something utterly ridiculous to say, write, sing or whatnot). While it's use is not illegal over here, singing (or using) that line makes you a potentially dangerous moron and is generally considered highly offensive.
For this particular German he's basically singing a Nazi song.
do you believe that all "Hitler cat" memes should be removed from the internet?
maybe we should just ban all references to anything related to nazis. maybe burn all copies of "mein kampf" so no one gets offended?
or maybe we should round up everyone who posts a joke on the Internet and throw them in concentration camp because their beliefs are different than yours.
calm down buddy.
It would be considered too boring for Titanic magazine. Good job holding up the stereotype of the humor-impaired German.
Is that an error in judgement on Uber's part? Perhaps they'll settle or get the fine reduced if they remain unsuccessful, but with a fine like that per ride, there is a slim possibility that defying the order could send them out of business, isn't there?
That's different from the last two bans (Hamburg and Berlin) where Uber was banned by administrative action (Verwaltungsakt). In that case, an appeal has delaying effect until the case gets heard in court.
http://www.gesetze-im-internet.de/pbefg/__1.html
>Diesem Gesetz unterliegen nicht Beförderungen 1. mit Personenkraftwagen, wenn diese unentgeltlich sind oder das Gesamtentgelt die Betriebskosten der Fahrt nicht übersteigt;
=> As long as the total fare is below the actual costs the law is not applicable.
It seems if Uber operates at a loss they are fine. ;-)
It reminds me of the bullshit safety concerns used to continue Oregon's ban on pumping your own gas at gas stations: http://www.oregonlive.com/opinion/index.ssf/2014/06/its_for_...
The reality is, it's a form of protectionism for gas station attendant jobs, just as this German decision smells like regulatory capture. My guess is that if Uber changed policy to actually meet whatever requirements safety they're asking, they'd devise a new set of excuses for the ban, because this is ultimately about preserving the status quo.
If the court hadn't stopped Uber, we'd actually see some special treatment (that is, protectionism) in Uber's favor.
Recommended: http://theumlaut.com/2014/04/30/how-net-neutrality-hurts-the...
1) You can drive a car in Germany if you meet some basic legislative requirements (Führerschein etc.)
2) You can carry a friend as a passenger - perfectly legal.
3) You could carry a stranger who asked you for a ride - perfectly legal.
4) That stranger could give you gas money - perfectly legal.
5) But if you use your smartphone to find strangers willing to pay you for a ride at this point your activity becomes so unsafe that you need to jump through a whole bucketload of extra hoops? Why is that exactly?
When you get to number 5 you have a commercial company and an individual, and that changes the relationship.
Here's a US example.
I can drive a car, but if my employer asks me to take a parcel from work to the post office to be posted I need to make sure my insurance covers that commercial activity or I am uninsured.
Why are people in favor of using tax dollars preemptively to defend extremely-profitable insurance companies? If their customers aren't following their contracts, the burden is on them - and I don't see a problem with that. Its not Uber's fault.
In the meantime, Germany is banning a company that has shown they lower DUIs upon introduction.
To me having insurance valid for commercial use seems reasonable, but you don't need special licenses or laws to enforce that. Just have a law that says "you must have insurance valid for the kind of driving you do" (which I suspect Germany already has).
The basic point being made here is there is no technical or medical reason why the amount of money being charged suddenly makes driving fundamentally different. You're driving the same car on the same roads with the same driver. So why have governments made it so complicated?
And that jurisdictional difference exists because it is profitable for cities. The consumer does not benefit at all.
So he will spend more hours on the road which is more demanding for him as well as his car, which is why it requires more regulation.
The moment you're driving people around for profit you're entering a regulated market. Deal with it.
5 is not about safety. You enter a regulated market once in case 4 the money you give to the stranger exceeds the cost attached to the ride, smartphone or not. On top, you have no insurance coverage anymore.
Lots of cities say they want to be the Silicon Valley of Europe. Uber tests whether they mean it. (https://twitter.com/paulg/status/477428094530121728)
Talk all you want about Uber being evil, predatory and not really the One True Sharing Economy - this right here is why Europe won't catch up to US in terms of startups, despite all the nice talk about being friendly to them.
Jest aside: This is just not how things work here, for good or bad. I think there's also not that much room for disruption in the Uber case, at least in Germany. The market for cabs is very much unlike the market in the US - there's not a single huge company owning all the cabs in Berlin and a medallion does not cost a million EUR. Service has been pretty ok for me so far and I use a lot of cabs, so I actually don't see much of an upside but I do see a lot of potential downsides, not that much for me who could easily afford a surge pricing but for people that maybe can't and have to rely on regular cabs.
I suspect there is, otherwise there would be no need to ban it.
Is this not a ban? Are you saying Uber drivers weren't following the regulations every other driver in Germany has to follow - they were not obeying traffic laws, not holding driving licenses, etc.? No, they didn't follow additional regulations that not everybody has to follow.
I could create a "supermarket startup" tomorrow, by using 0-hour contracts for the whole workforce, forcing farmers to earn less, stocking food of dubious safety coming from China etc etc, all thanks to some wonderful app that will calculate and manage all this for me. That's not disruption, that's robber-baron race to the bottom.
On the opposite, if I create a fully-automated supermarket that does not require any workforce but still provides exactly the same level of quality to consumers and producers, that's real disruption.
The startup ecosystem should not take their clues from Walmart and Ryanair. Before Uber can righteously challenge European legislation, they should prove that they have ways to address the issues that generated that legislation in the first place: are all drivers insured? Are their vehicles safe? Etc etc.
If you can find people freely willing to provide labour services at the price you offer, I see no problem. As far as "forcing" farmers to earn less, how are you going to achieve that? Coercive appropriation of goods is a practise strongly restricted in modern capitalist societies. Finally I highly doubt there is a good market for unsafe food products, though I am sure for some people it would be an acceptable risk - if you are discovered faking the quality of your food products though I imagine you would go out of business pretty quickly through the standard feedback mechanisms of capitalist society (the media, consumer outrage).
Doesn't sound like a very strong business model to me unfortunately.
Before Uber can righteously challenge European legislation, they should prove that they have ways to address the issues that generated that legislation in the first place: are all drivers insured? Are their vehicles safe? Etc etc.
Why can't we simply let people decide for themselves whether they want to ride in insured vehicles or not? Are people too stupid to calculate probable risks and rewards and make their own economic decisions?
That thought right there is straight from the XIX century. There is no such thing as "freely willing", in the real world people provide labour in exchange for money in order to survive in a society that forces them to do it or perish.
> As far as "forcing" farmers to earn less, how are you going to achieve that?
http://www.theguardian.com/environment/2011/jul/02/british-f...
> Finally I highly doubt there is a good market for unsafe food products
Seriously?
http://ecowatch.com/2013/05/09/food-imports-from-china-under...
The food supply chain is much more opaque than you would think, even in Europe where regulation is much stricter than anywhere else. A lot of food producers will skimp on everything they can, short of killing tasters on their first sip.
> Are people too stupid to calculate probable risks and rewards
Not everyone has the education (or the inclination) to make such calculations, every minute of every day. This is why we have regulations in place: because predatory behaviour exists and can result in very bad outcomes, up to and including loss of life. I personally don't want to go back to "the XIX century plus iPhones".
People don't get to decide for themselves whether vehicles are insured or not anywhere in the world that you'd care to want to live. Liability insurance is mandatory, typically taxis carry passengers so they have mandatory insurance for their passengers as well.
Since you don't exactly get to check the state of the vehicle and/or the insurance situation of the driver before you get in this is something that is - rightly, in my opinion - regulated. It makes sure that as a consumer your rights are somewhat safe, rather than a gamble.
Anyway, why can't we just let Uber drivers state the degree of insurance coverage they offer and explain how often they check their vehicles and who does the checks etc? Then let people decide who they want to ride with. No gambling required. We can even expect Uber drivers to freely offer this information themselves, because it will make their services more attractive.
Remember we are talking about interactions between free individuals here. No one is forced to take an Uber ride.
Why can't we simply let people decide for themselves whether they want to ride in insured vehicles or not?
Who will pay when those people wind up in hospital, racking up bills of hundreds of thousands Euro, and there's no insurer to cover the cost?
Sorry, but the price for living in a society is that you don't get to pick and chose, which laws are appropriate for you.
If you don't like them, you're free to try to change them.
You are not free, however, to just ignore them at a cost to everybody else.
Health insurance. I'm not aware of them not paying for obvious things like accidents, etc. They do avoid paying for things that are not strictly medically necessary, e.g. cosmetic surgery in many cases. But if you get a ride with someone and they get into an accident where you are injured, the question of hospital bills should not arise. At least not for the victim.
Yes, they are.
People are hopeless at calculating risk, especially for things like this.
It's the same exploitation through evading labor and safety laws dozens of shady companies have done for decades.
If a transportation company exploits East-European truck drivers, or a building company exploits construction workers it's disgraceful, but because an American company does it by using a phone app it's suddenly cool and "disruptive"?
I'm glad that we have a level of protection in terms of privacy, consumer and worker rights.
Uber is not innovative. Uber is the same old scam all over again. But with an app.
Germany's culture = safety first. So get TÜV certified cars and licensed drivers.
There is quite a bit of difference in regulating what businesses are and are not allowed to do, and regulating what people are and are not allowed to do.
Those consumer protection laws we have also in Germany for transporting passengers. Some details may have to be revised, but in general I consider them as good.
The consumer protection law for German requires, that a people who provide transportation as a service are required to have an according permit (Personenbeförderungsschein). This permit includes, basic checks, that you can drive and that you obey the law in terms of driving, which means you have clean driving record. This permit also includes additional requirements in terms of emergency first respond, before the First Responder arrive.
In addition the company (or you, if you self are employed) has to take care, that the car is in proper condition in terms of car safety (brakes and such). Proper condition for cars used for transportation business has be checked regular, meaning every year. Normal cars have to be checked only every other year. Also, the company has to have an according insurance for this use case. Regular insurance does not cover it. Finally, the company has to have also an registered business with the tax office, which is also understandable.
All these requirements are easy to obtain, but of course, have costs associated with.
According to this preliminary judgment, Uber is either required to validate, that all those requirements are fulfilled or they are punished with a 250.000 EUR fine, for every ride that does not follow the rule.
From that sense, Uber is not denied market access. It is only, that they have to follow the rule.
The problem is, that Uber says itself, they don't want to check those details. They just don't care. They explicitly say, they don't care. Because Uber argues, that they provide only "Ride sharing".
But that is wrong. If they would provide only Ride Sharing, than they would only offer UberPool. Uber is contradicting its own arguments, by explicitly having and marketing one service a Ride Sharing, while not offering this one service.
BTW: this ruling is only for UberPop. Because with UberBlack Uber shows, that it is able to follow the rules.
EDIT: Uber is not required to have a Taxi license. A Taxi license would of course give them additional benefits, like they are allowed to park in Taxi zones, drive in bus driveways and such. But there are also other obligations, like the price for the ride is set by the city and alike (no surge pricing). They have to take every ride, it cannot be denied for whatsoever reason, beside personal safety of the driver. The price is calculated by a certified taxameter. And may be other rules, I am not aware of.
It's a shame that it currently buried about 10 pages deep at the time of this writing, because it's a reply and not a top-level comment.
There won't come much disruption from Berlin, soon.
(I live in Berlin, too. And I prefer a Taxi.)
I don't understand why Uber, in a regulated taxi eco system like London or Berlin, wouldn't just start with UberTAXI? Why not start the process gently by being able to hail a cab and pay through the app. This is the most problematic issue for me as a user. Getting a dedicated cab to show up to my location, just for me.
While living in the Bay Area, I talked to several (yellow) cab drivers that love Uber because it guarantees a fair that their dispatch service can't.
Why does Uber not enter new markets by making booking Taxis easier first, then introduce X at a later point when their brand is better known in a new market?
image : https://twitter.com/paulsavage/status/506714057609867264
What I just don't get about that is the fact that the black car service is the thing that's most "analogous" to a taxi service, isn't it?
Maybe I'm not understanding something here.
"There is no way to legislate competition; there are no standards by which one could define who should compete with whom, how many competitors should exist in any given field, what should be their relative strength or their so-called “relevant markets,” what prices they should charge, what methods of competition are “fair” or “unfair.” None of these can be answered, because these precisely are the questions that can be answered only by the mechanism of a free market."
It's about Uber avoiding regulations (that the taxi coops already implement): insurance for passengers, insurance for commercial car use, car checkups every year instead of every second (like for private cars), yearly health check for the driver.
That's essentially it, and as soon as Uber follows the rules, they can operate freely. They can organize it themselves (with employed drivers) or require their freelance drivers to do so.
If their business model doesn't allow for that, their business model is flawed, and the German society has no obligation to bear Uber's costs just so they can feel "disruptive".
[edit: it's somewhat more involved given that the court refers to PBefG, which as a whole needs some creative interpretation to allow for Uber to work, eg. running things as "car rental with driver" (which requires that customers don't state where they want to drive to beforehand). Still, Uber tries to work around any and all regulations, and it's no surprise that this won't be tolerated, and for good reason.]
In my experience as a German waiting for a taxi after midnight in a suburban area (but with a major road going through), this is a merely theoretical construct. I've called 3 taxi providers in the rough area; the result was a brisk 1.5 hour walk home because they did not seem all to interested in dispatching a driver to that location at that time. I might have a theoretical legal handle on this behavior, but I doubt this has ever been successfully challenged in court (since the providers can always weasel out by claiming the did not have and free drivers at this moment).
The other rules are plausible, but what on earth is this about?
A yearly health check will look for signs of those illnesses.
Examples might be poorly controlled diabetes; epilepsy; sleep apnea; etc.
Here, it is not sufficient for a driver just to believe he is capable of doing the job, the state requires that he proves his capability and therefore guarantees every passenger that he is capable.
The legislation is perhaps not about stifling competition or anything. But it has the end result of reducing competition by raising the barriers to entry.
Not only that, but it actively prevents competition (e.g. low-end providers) by making a whole segment of the market illegal. It's just the nature of regulation being universal to the country as a whole. i.e. it doesn't allow people to make their own judgements about what safety level they want based on their willingness to pay/not pay for it. In essence boiling down to "you get the extra safety, even if you can't actually use the service because the extra safety bumped up the cost"
Just like erecting skyscrapers that cannot withstand a summer breeze or storing nuclear waste on a city landfill.
If Americans want to do it differently, be my guest. Yes, you're more focused on individual freedom than the rest of the world. Fine with me.
But maybe you could try to understand that Germans are very safety-oriented. And maybe you could just accept that instead of telling us that we're not doing things like America and therefore we're wrong.
Not all Germans, seeing as people are actually using Uber in Germany. That's the point I was trying to make. Tyranny of the majority, I suppose, unfortunate, but apparently "the best we got".
Side note: I'm not actually American. Please don't stereotype and make assumptions based on opinion/nationality, even if it is a good one such as "focused on individual freedom" and "Germans are very safety-oriented", etc.
Some regulation is good, depending on the field. Public transportation is in my opinion one of those fields (and engineering another).
Uber could fairly easily comply with these laws but it would cut into their profits and that is the reason why they have chosen to ignore the law and to cut their drivers loose the moment something happens (such as when a driver is involved in an accident).
1) Saying that some businesses ought to disappear due to the invisible hand of the market, is just like saying that things ought to stay down due to the invisible hand of gravity. The market is a powerful force, but that doesn't mean its outcome is always what we want.
2) It's a feature of the free market that firms go out of business all the time. But from a market point of view, people are like small firms that sell labor. We don't want a system where people can "go out of business" and be unable to survive, because that's inhumane.
It looks like (1) proves that we need some restrictions on competition, and (2) proves that we need some redistribution. We may quibble about how much, but taking a Strong Principled Stance against these things seems wrong.
You're conflating issues here. Something (or someone) that's not adding any value to an economy has no place (and no reason to participate) in it.
That being said, letting people starve is obviously inhumane. However, the answer to this isn't opening up bullshit positions in the economy, by introducing artificial inefficiencies, in order to accomodate those otherwise "useless" people. Regulations (ideally) are there to keep the markets efficient (in the long term) by maintaining "fairness". Not to ensure that individual humans don't starve.
Keeping people, that are unable to support themselves, alive and well is a welfare issue, and is not otherwise adressed by markets (directly).
That said, I have sympathy for the idea that markets and welfare can work well together. I've long suspected that "the welfare state is a libertarian's wet dream", e.g. a system of universal basic income would allow more people to become entrepreneurs because the risk would be lower. Not sure how Ayn Rand missed that point.
The cynic in me thinks this is less about consumer protection and more about well-funded taxi lobbies which benefit from the regulatory capture.
That's pretty much the crux here: should consumers have the ability to 'opt-out' from these protections or not?
My beef with that is that taxi's are seen as public transport and people expect a certain level of service rather than a free-for-all where one driver will be courteous and professional, the car clean and serviceable, the next will rip you off and be a jerk.
Uber takes care of this in part by using a feedback mechanism, but - Unfortunately for Uber - in Germany these things are a bit more organized than elsewhere and the German taxi system - in those cities where I have used it - is actually quite reasonably priced and the drivers are typically professional and the cars are clean and well maintained.
So from that point of view they don't add value, they just undercut the existing drivers by sidestepping the regulations. And that is unfair competition.
The solution is simple: Uber should certify their cars and drivers for the German market under the same rules as the rest of the drivers and taxi companies, then undercut them on price and overdeliver on service.
That really would be the free market in action.
Your point being?
By that logic, we should happily accept monopolies, cartels and huge conglomerates.
The notion that the free market is beneficial to society as a whole was a cute idea, but the slave workers of Foxconn are probably not quite in agreement.
http://www.cnn.com/2012/09/30/opinion/chang-chinese-factory-...
For a free market to work, there must be common respect for individual autonomy. People must enter into contracts of their own free will.
Anyway here, it's not about competition (that's what they want you to believe it is), it's about regulations (e.g. ensure some safety rules).
Can it? Are there any good examples of a market with a significant size (with enough profits to support multiple suppliers) devolving into a monopoly without any "help" from outside the market?
AT&T, has one should know, was a legal monopoly; hardly a free market participant.
Reality checking in.
Maybe this is the only way in which such a regulation effort can be challenged but I'm not convinced of that.
As for the 'careful now' and so on bits, anybody quoting Ayn Rand verbatim without adding much to the conversation is probably going to get downvoted, it's not as if she's an authority in the field of economics, and most of her writing displays a shockingly bad understanding of the field.
After all,there is a demand for that,there should be an app for that /s .
> Careful now. It's daytime in Europe, so the more Laisser faire (US-free-market-style) arguments have a higher change of getting down voted.
And please,stop hating on Europeans, your bigotry is showing.