Uber slapped with suit by Philadelphia taxi companies | Hacker News Reader

Uber slapped with suit by Philadelphia taxi companies

philly.com

24 pointslarrys40 comments

I recently took a cab home in philly, and throughout the ride home the cab driver was telling me about uber and the impact its had on him. He works 2 shifts and makes $70 but the cab itself is $80/day. He used to own a gas station and other real estate but the economy screwed him and he resorted to driving a cab to try and support his kids, which he was barely able to do.

equally, there was a time I had to take my cat to the vet and could not get a cab home. I called every company I could find, tried the apps for the ones that required it, but nothing. One of the people that worked at the clinic drove me about 2 blocks and there was a cab of one of the companies I had tried, sitting in the parking lot of a gas station. That was frustrating.

So I think its unfair what cab drivers are going through. I think Uber and other services bring innovation to the market and consumers have expressed an interest in this. While its true advances in technology often leave a given workforce obsolete, this is more subtle and "technical" in a legal sense; and not nearly as dramatic as self-driving cars will be.

I think philly should give these cab companies a break, or tighten their grip on Uber. Both should be allowed to compete, and do so fairly. Its not in the consumers interests for one or the other to go away.

Also, I think the "uber is just an app" is BS, because they're setting the rates and getting a commission from the ride (someone correct me if I'm wrong on this) so in reality they're operating an automated dispatch service. But I think their entire business model revolves around that talking point, and doubt they would be able to compete with taxi's if forced to play by those rules.

The problem is that any real change for cab companies requires the PPA (or your local city's authority) to admit that medallions are incredibly overvalued, artificially inflated, and archaic.

I don't know if you know the Philly PPA, but it's more likely to rain gold nuggets.

The PPA (and other medallion authorities) will never admit they're way is antiquated or wrong (or damn near criminal) and will do whatever they can to sustain authority, the status quo, and monopoly. The only way to shudder "disrupt" old, dirty cabs with poverty-wage drivers is to show complete disregard for bad laws and those desperate to hold on to power no matter how bad it is for the population at large - or even the drivers they say they protect.

First, let me state this clearly and for the record: fuck the PPA with a bag of rusty dicks.

But I think you're right. PPA will need to change and that will not come easily. They will react though - but it will very likely be too little too late.

I think the number of cab companies will go down and medallions will drop in value; if i recall NY has already gone through this. Or there will be pressure from cab companies to change the rules.

I think ultimately Lyft and Uber and such can bring about positive change and disrupt shake things up in an industry that has gotten a little too cozy.

interesting bits from the PPA site:

> Recent legislative changes have altered the composition of the Parking Authority’s Board of Directors, with a majority of Board members now appointed by the Governor of Pennsylvania.

and

> In July 2004, the Authority assumed responsibility for the regulation and enforcement of taxi cabs and limousines operating in Philadelphia.

In a market where a taxi medallion costs $520,000, I think concerns that Uber is screwing over cab drivers are a little misplaced.

Indeed, it is the medallion holders -- who miss their extremely safe investment that used to return 7%+ (NYC medallions did significantly better than the 7% average) for years on end... it was a great place to sink a lot of money, very safely, protected by a government monopoly.

For a few decades medallion holders won, taxi drivers and taxi riders lost. Competition in a market that has been free of it for a long time will always be extremely disruptive.

Sounds like that guy might make more money driving with Uber than having to pay $80/day to play.

He touched on that - about how much it is to get a car and drive it for uber for X years, but i had trouble following what his ultimate point was around that - i think he was inferring it was hard to make money at the end of all that.

Uber does not provide vehicles for free either.

But you can use your own vehicle, unlike in the taxi industry.

Not really a good thing, as they depreciate in value

Hence taxi companies charging drivers $80 a day to rent them?

$80/day * 20 days per month = $1600 / month, which is like 10x the cost of a lease for, say, a Prius. Meanwhile, Uber drivers can use their own car for any other purpose. Even factoring in gas and insurance it's hard to believe taxi drivers are getting a better deal.

Lease a mid-size sedan and paint it yellow. Then buy it out because you will be saving tons of cash over the lease period. Depreciate in value for something like this is dumb.

We are not talking about fully loaded S500 MB's here.

It's a little unfair. Uber drivers get screwed over by wages, but taxis are a miserable affair. Every company has their own hailing app; even though drivers are required by law to offer credit card charges, I've been forced multiple times to get cash out of a machine because the machine doesn't work. One time it was even blatantly unplugged.

Both sides are fucked, in their own way; the taxi companies will need to come together and figure out something aside from a lawsuit to survive uber (and uber's successors).

I have been told by multiple cabbies in different cities that most personal revenue ("salary") they make is eliminated by absurd cc processing fees.

A recent driver in a SoCal city told me that his processing rates were 20-30%, and he was only allowed to use that service by the terms of his cab lease from the medallion owner. (They obviously operated the cc processing service as well.)

Shouldn't blunt your frustration, but I wanted to repeat what I've heard from traditional taxi drivers -- they're sometimes better off not driving you than driving you and collecting payment by cc.

I'm well aware of this, and I attempt to tip to offset this. That's no excuse for basically refusing to accept how I want to pay. I don't take short taxi rides, so if I'm traveling in the city I always pay at least $20.

Processing rates are 2-4%. 20-30% is egregious and probably illegal. But even if not illegal it's such high order extortion by his boss that he shouldn't trust him. His boss must be a complete dickhole to do this to his driver.

I would like a source please

Sorry, don't have one. Wasn't trying to convince you of my perspective, or change your mind. If you're genuinely curious, I'd encourage you to talk with the next few taxi drivers you interact with, and ask them about it.

I can vouch for this; it's a common gripe. Talk to your driver about it the next time you taxi.

I wonder if there is a business opportunity in launching a company that is "Uber for Taxis". That is, rather than selling it directly to the consumers, you partner with the taxi companies to provide the technology that enables an Uber-like experience with regular taxis.

The taxi companies must be scared shitless by Uber and perhaps will greedily adopt any (cheap) tech that will close the user experience gap. Get a single taxi company on board in an area, and perhaps the others will follow. Either craft your terms to ensure you can work with all of them, or partner with one exclusively and help them become the winner.

Is there a service like this already? Ideally consumers would have a single app that can interface with all participating taxi companies. Perhaps the user chooses the taxi company from a list (polished list with nice branding), or perhaps accepting a ride is first-come-first-serve across multiple taxi companies.

Handle the payments efficiently with a similar experience to Uber. The app knows the taxi fare ahead of time. Support passenger and driver reviews.

Take a nonthreatening stance in the market. Focus on partnering with existing transportation providers like taxis, not disrupting them or replacing them. The system will need to be very simple and cheap to install in taxis. Perhaps a mobile device for dispatch, as well as a mobile payments system like Square to handle card swipes from random fares.

The service could take over all taxi dispatching functions for participating companies, as well - with features for central dispatch to request drivers manually (such as by phone, etc.), as well as automatic routing to users of the app. With a leg in the door for dispatching, the app could also expand into other backoffice functions.

I believe Hailo has taken this approach; the problem is getting the myriad taxi companies on board.

Thanks for the tip! The site implies that taxi drivers sign up for the app individually too:

> If you drive a taxi or for-hire vehicle in New York City, Hailo is for you. Co-created by three taxi drivers, the Hailo app sends you extra jobs, so you can earn more money every shift.

https://hailocab.com/nyc/drivers

The approach that I'm suggesting is to sell technology directly to the major taxi companies - get them on board, and set it up in every car in their fleet. Don't attempt to displace them or hide their branding, but make it a distinguishable part of the experience. At least in the beginning. Perhaps they will become a commodity eventually. (There's probably a reason this won't work; just throwing an idea out there.) Thanks for replying!

Flywheel also (in SF).

My new rule of thumb is that a startup doesn't exist unless it works outside of San francisco.

That's... actually a really good rule.

SF was the only place I've tried it, but I checked their website and they work in SF, LA, and Seattle. Nowhere near Uber/Lyft, but it's a start.

I use and enjoy the services that uber offers. That said, it uses dubious loopholes to evade the (misguided, anti-competitive) regulations taxi companies operate under.

Letting uber evade the bad regulations instead of fixing them is a poor solution (same with tesla and dealerships).

Whenever a market gets too distorted or even shut down, shady things (either illegal or in legal gray areas) start popping up that allow people to evade the distorted market. Alcohol prohibition, printer cartridges, keurig and nespresso capsules, taxis, even the war on drugs, you can all boil it down to this simple principle. At the end this is how change happens when at some point the attempts to crack down on it are either given up or it leads to such a severe police state that at some point a revolution happens. So I'd say don't blame the player, blame the game - but still hold up the player to the moral standards you'd like to see yourself (e.g. try to give your money to a better organization than Uber).

When it comes down to these things I like to go back to Immanuel Kant: "Act only according to that maxim whereby you can at the same time will that it should become a universal law without contradiction.". I care much more about this than about the law, especially laws that clearly don't have an actual democratic process at their basis. Laws that come into place because of lobbies pressuring or influencing politicians through money or other means, where there is no real possibility for the people to overturn it, are in my opinion not morally just. Unfortunately this means that there are almost no laws I find just, other than those in my home country, Switzerland.

Well said. I find it absurd how much local governments interfere with local markets, like with taxis. I see no good reason (that will survive scrutiny with Kant's Categorical Imperative) to legislate the number of taxis in a certain area, like with medallions, or charge a high price for them. It's effectively corruption and regulatory capture. It's anti-competitive and has, by my analysis, no redeeming qualities that could not be accomplished better another way.

I don't see a reasonable avenue for a company like Uber to change the laws ahead of time. They only have the traction and resources that they do because of their bias for action. A no-name startup petitioning the city to drop their taxi legislation because the model is "wrong" will get nowhere. I don't see how Uber could ever have come about with that approach.

Additionally, I am also not convinced that Uber's model falls under taxi legislation by writing or intent. I do not believe that taxi legislation is attempting to control for the same problems. Taxis pick up random people on the streets, with effectively zero relationship ahead of time, and lots of opportunity for individual consumer ripoff. People who use Uber have established a relationship with the company ahead of time, before they need a ride. They have chosen to use Uber specifically. The same choice and discrimination is not part of hailing a cab on the street. Uber offers a consistent price to people in an area, and its well-known brand has a reputation to which people can associate bad or good experiences: for the company as a whole, through their speech, and for specific drivers, with the ratings system.

That said, I do also have concerns about Uber's attitude and their intimidating and disruptive tactics toward the press, competitors, etc. They have not comported themselves well enough to deserve the moral high ground, though I will tend to side with them anyway on these legislative issues because taxis are so dysfunctional.

That's a good point - if Uber should fall under Taxi law, so should SuperShuttle and various other airport shuttle services. Once there is already a consumer relationship in place, there is no need to protect consumers more than with the normal anti fraud protection.

As a Philly native whenever I head up to NYC one of the things that always strikes me is how much better the cab experience is - which should tell you something.

The setup we have now is just bad all around. It's not good for the drivers, and it's not good for the passenger. One of the last times I took a cab here, the driver spent the whole time on the phone talking to another driver about how to cheat at inspections, disable the CC machine, etc.

Edit: Nevermind. I was confused when the article said, "Pennsylvania's Public Utility Commission recently allowed UberX to operate in the state, but not Philadelphia." I took that to mean they were not operating UberX in Philadelphia. But maybe it means they are? Illegally?

There is UberX in Philly now, although as far as I know there were no regulatory changes (and Black still operates legally). The PPA actually did a handful of "sting" operations against UberX drivers when the service started, calling an Uber and then impounding the vehicle (http://www.phillymag.com/news/2014/10/26/uber-philadelphia-u...).

As far as I am aware (I use uber quite a bit), Uber X is only available in the suburbs. In the city, it's not available; I've only ever gotten the Uber black sedans.

EDIT: This is no longer true, apparently my statement about using uber quite a bit is also no longer true.

UberX recently became available: https://www.uber.com/cities/philadelphia

I've taken several in center city! (unsurprisingly, a much better experience than CC cabs...)

? Isn't the lawsuit about UberX?

> Checker and the plaintiffs group contend the UberX drivers are operating an illegal enterprise

Seems like Uber cannot catch a break!

goes to show that the only ones upset by Uber are those in competition with them

I'm pretty sure there are a lot of people upset with them. I use uber pretty regularly, and there is no way in hell I agree with the government sponsored monopoly that taxis enjoy, but I don't like them. They're a shady company with shady legal practices.

Use Lyft?

In Seattle, there are probably 50 uberx drivers for every lyft driver. I don't know why they haven't caught on more, but they aren't much of an option.

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