Uber leaves Kansas after lawmakers demand background checks and more insurance
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I live in SF, and was flying out of OAK. I had used Uber only once before, a long time ago; but this time, I suggested to the wife that we use Uber again. We had to leave SF at 7:15AM - 7:30AM or so.
Around 7:15 I pulled up the app, and saw that there were several cars around (as they usually are). I requested an UberX; punched in the destination. A driver quickly accepted, and Uber said he'd be there in < 5 minutes. A couple of minutes later, I get the notification that the driver cancelled. OK, I tried again. Same thing again: driver accepts, and then a minute or two later, cancels. This went on for 4-5 times. Now, time is getting tighter, and I have a large suitcase; and cabs don't come around in my alley. I tried Uber again, and this time Uber says: "Surge pricing in effect! Rates are 1.5X". I knew what was going on; but I had to accept out of desperation. What do you know? A driver quickly came over and we were on our way. The driver did say that some drivers may not have wanted to go to OAK because traffic back would have been bad.
But here's the thing: a licensed cab cannot refuse to take you to your destination! Uber seems to be set up to take advantage of riders with their "surge pricing" scam.
This experience left a bitter taste in my mouth, and I made sure I installed Lyft for the ride back.
I get that you had a bad experience, but the response to every bad experience should not be regulation. "Surge pricing" is no more a scam than any other market-based pricing mechanism.
To be clear, I'm mixed on Uber overall, and I do think they need some regulation, but not with regard to pricing, coverage, or response time. Those are good fits for self-regulating markets. I'm more concerned with things like knowing that when I get in to an Uber, I'm covered by the proper insurance if I end up in an accident on the way to my destination.
Surge pricing on an unknown fare (metered) is actually quite ridiculous.
For contrast, when I order a Lyft line in Manhattan, it gives me an exact price quote (not an estimate, but the exact quote) before I order the ride, taking all surges into account. This means I have perfect knowledge of what the price is going to be before I decide whether to take the ride[0].
Uber has consistently refused to implement price quotes, to the point where they have literally jeopardized their existence in at least one city because of it: all of the legal problems they have in London would be avoided if they provided price quotes in advance.
Uber has been really clever to frame the controversy as a debate about whether the cabbies should have to take an exam. But the fact that medallion cabs in London have to take the street exam is all moot, because if Uber provided price quotes in advance, they would be classified as a different kind of car service which doesn't have to take the street exam in the first place.
Instead, Uber would rather launch a coordinated PR and legal campaign against the entire medallion cab system in London, just to avoid implementing an incredibly user-friendly feature.
[0] This feature may not be in all locations yet (in fact, I don't know if it even works if the destination is in another borough), but it's clear to me that this is at least where Lyft is headed, whereas it's clear that Uber is committed to not providing price quotes.
The opposite is actually clear to me. Lyft in SF previously had the functionality you describe Uber in Manhattan having. You put your destination in, it gives you an exact price, you decide whether to call it. When Lyft Line (the carpooling variant) was introduced, that feature was actually removed, and now with a standard Lyft ride there is no way to know your fare in advance (though there is now with Lyft Line).
In a similar vain, Uber gives a max fare on Uber Pool (so you know at most what it will cost, guaranteed). Uber also does do fare estimates on UberX and other rides. I've heard from a few drivers that they may have avoided giving exact fares in advance on UberX and others because people tend to want to use them a little bit more flexibly than get from point a to b (Stop and pick up a friend on the way, for instance).
Point of all of this being, it's not clear to me that either company is committed to providing or not providing price quotes. I think we're still in the early stages of experimentation, with features being added and removed and changed between locations all the time, and I don't think we can yet characterize what either company is committed to doing or not.
Point taken. I'm willing to believe that Lyft may not be committed to providing price quotes. But there's at least ambiguity there, whereas it's very clear that Uber does not want to provide exact quotes. If they did, they would have in London and avoided the expensive, multi-year legal and PR battle that they're engaged in there.
How much do you think this protracted battle has cost them over the years, both explicitly (PR firms and lawyers) and implicitly (opportunity cost of lost revenues from additional rides)? Whatever it is, it's a high number, and Uber has decided that not providing price quotes is worth even more[0].
> Uber also does do fare estimates on UberX and other rides.
An estimate is simply lead-generation for them, not a quote. They are not committing to charge me the price they estimate. As the consumer, I still do not know what the ride will actually cost until I am already on the hook to pay for it.
[0] It's not even a tough actuarial problem to solve at Uber's scale, which is why it's such a glaring omission, in addition to the example from London.
Would you rather have a service which charges more to (say) black passengers than white? Or which charges more to go to a poorer part of town a rich part?
The regulation I'm talking about is not being able to discriminate based on the type of passenger or destination.
Race is not equivalent to "type of passenger or destination" though. The latter is a much more vague definition. Like it or not, things like distance, roadway accessibility, and desired route impact the cost of a fare, and regulating that away isn't something I openly accept as the best solution.
Exactly. You're at a bar in SF near closing time (2AM) and need a ride to Hunters Point or Bayview? Suddenly, "surge pricing" is in effect! However, if you need a ride to Pac Heights or the Marina? No problem! This may not seem like discrimination based on economic class/race, but it sure is.
Just as the opposite works, if nobody is going to buy at your price, you have to come down, or you will lose business... ideally you will meet in the middle via market pricing. The rates are centered around competition with other sources for similar services. There is competition and market driven pricing, I don't see the problem.
Too often our knee-jerk reaction is to want the government to get involved.
But based on your experience, you are probably
a) not going to trust Uber again, at least for this sort of ride
b) choose a competitor / traditional cab to get you to OAK
c) tell all of your friends / HN about your crappy experience, leading to reduced reputation for Uber
The end result is that Uber will no longer get your business and perhaps others' business will go elsewhere too. Uber is being punished for its bad behavior by the market. Getting the government involved would likely put Uber out of business (hence the article) or make rates way higher and essentially no different than a traditional cab.
I love it how libertarians believe everything will be fixed by a mythical "market". I'm sorry, but if we had left it to the "market", we'd still have separate "white" and "colored" toilets. We'd have no gay marriage. We'd have no voting rights act.
The regulation I'm talking about is not being able to discriminate based on the type of passenger or destination.
They can refuse based on Destination, but not anything that is forbidden by Law. Such as Race, Sexual Orientation, Religion, Handicap, etc... There was a notice to Uber drivers sent from Uber, stating that any driver that gets complaints about not accepting customers that have a service animal, they will end their partnership with that driver.
I agree, the Market can't fix anything, even in a Libertarian world, there is Government. But they should only be there to define the rules of the Game, not control the moves everyone decides to make.
I do agree, just the market would have not made everything all peachy, you do need to set some rules. But its just the limit and overreach of those rules is up for some debate.
KBI background checks, when Uber already does their own. (In a state that is VERY VERY VERY well armed) A State that doesn't support Gay Marriage, that up till 2006 had laws stating black people couldn't live in certain cities. (seriously...)
Just remember... its Governments that ban Gay Marriage, not markets, Governments decide who can and cannot vote, not markets.
That's the most absurd thing I've read today. Literally all of these things are the result of oppressive laws passed by the government in the first place. What does marriage have to do with the markets?
Even when you enter it, it takes a while to transmit that information only after you get into the vehicle, which leads to these awkward stares "where are we going today?" - "oh, I thought I had it entered in the app" - "oh, hold on then, it takes a minute to update".
Arguably, destination disclosure is a boon to consumers in some situation - you might get a discount on a late night ride from SFO if you're heading towards San Jose, where the driver lives (and was going to drive to anyways) as opposed to Walnut Creek, etc.
Next time don't enter your destination address, so the driver doesn't know where you go, and once you are in the car it is much harder for them to refuse you.
if the market was really busy and I wanted to go 3 miles away from the crowds, sorry the cabbie had to end his shift and couldn't take me. If it was a nice and quiet night, I would get the same ride no problem.
I also spoke with the drivers I used here in são paulo and they said the same thing: they only get the destination after the pickup and they only get my first name -- uber now is using a 3rd party service that proxys my phone so the driver won't have my personal number.
i emailed them before regarding problems with drivers and the customer support team is always good (twice i had problems with drivers doing longer routes when smaller ones were better and once i had a problem with a driver that accepted my request but never showed up).
(btw, i'm not an uber employee, i just like the service and use at least twice a month)
This is not an automatic process that can go wrong. And indeed, for anyone who has used Uber any number of times, this is immediately obvious.
Perhaps your driver surmised from your suitcase where you were going?
They wouldn't be as big as it was if the existing system wasn't literally awful, as someone in SF -- if I wanted a '''real''' taxi, it has a chance to not bother coming several hours later more than anything. And then intentionally taking roundabout routes just to fuck me out of even more fare.
And at Santa Ana Metrolink, I had 'taxi' drivers effectively try stealing my bags, throwing them into their vehicles, and trying to drag me along while I was waiting for uber/lyft. Maybe in cities where there is significantly more regulation, enough licences, and no corruption Uber would not be nearly as popular.
I've never once had that with Uber. All cars are fairly new and super shiny. When I sit in an Uber I always feel the car is well maintained and clean etc. There's no grimeyness.
And when I call an Uber, I know when it's coming. After the ride is done, I get a receipt that shows the exact route and so on. It's really neat.
Cabs on the other hand are a black hole. I call a cab and it's theoretically on the way, but I have no way of knowing and there's no indication on how far it is and when it's coming. After I pay for it, the money goes into a black hole and other than a small piece of paper that I lose after two minutes, there is no indication of it happening or how much I paid.
They "cannot" but they have done it to me many times in several cities. I also once had a cabbie try to strongarm me into giving a ridiculously huge tip (~100%) "because I won't be able to get a fare all the way back." Not to defend Uber here, but it's not like the cab regulation totally fixes this.
I am of two minds on surge pricing. I certainly don't like it, but I don't think it is a scam so much as normal economics.
This is one of the unfortunate side effects of a car service pulling out of a city like Lyft did in Houston. Now only Uber remains which, despite its flaws, is light years ahead of the standard yellow cab service.
Wingz is a cheaper replacement for UberX and Blacklane is a cheaper replacement for Uber Black, both have to be arranged though.
You had a spot of bad luck with cancellations—they're in fact extremely rare, and I've taken hundreds of trips. On top of that, drivers cannot see your destination when a request is made. Go ahead and ask them.
If you're going to snark you should at least pick a good example.
Isn't that effectively what you're looking for?
Uber pulling out of Kansas makes half of the KC metro area impossible to work in. I'm curious if this will have a major impact on Uber's future in the entire city.
I've got a lot of reservations about calling Uber/Lyft a "job" in the first place; in fact I have a lot of problems with these "sharing economy" apps-calling them jobs when really you're just subcontracting labor on the cheap while the business side collects massive investments and benefits for the full-time employees.
It's like when you drive by a Dominos Pizza {substitute with the chain of your choice} and they have signs "make $15/hr"; you'll maybe make $15/hr on an incredibly busy day or a sudden surge in ride requests, but what's the mean? Is $15/hr the mean? If not, you don't get to advertise "make $15/hr".
I said it once at the start of all of these talks two years ago: It's becoming increasingly apparent to me that "disruption" in so many startups more recently means less "disruption with the goals of bringing about much needed substantive change to local regulation" and more like "give my company special treatment to operate". And it's a hard pill for cities to wave off when the population centers are all clamoring for an alternative to taxis.
okay I'm done ninja editing.
I think any customer would prefer background checks for drivers. Being defiant against them is just bad PR.
Background checks cost $20, or if you go through a channeler because you want your results in a couple days, you can pay $50.. This is a tiny price to pay for the safety of thousands of passengers, not to mention it wouldn't cost them anything, as they could defer the cost to the drivers as a part of the application process.
Trying to skimp out on insurance also goes further to show a wanton disregard for passenger safety.
http://www.bizjournals.com/kansascity/news/2015/04/23/kansas...
Or, they are mixing an agenda (low to no regulation) with business, choosing to leave a market rather than operate in it's rules.
You see, big businesses actually love regulation. It raises the barrier to entry and prices smaller competitors out of the market.
The only companies who don't like regulation are a) small businesses who risk being priced out of the market and b) monopolists or near-monopolists, who have no competitors left to price out of the market.
For Uber to throw their hands up and walk out of a market over regulation means that either they think like a small player or they think like a monopolist. If it's the former... well, they're a $40B company, and they should start acting like one; it's a sign of terrible incompetence that a $40B company is acting like a "poor, oppressed mom-and-pop". If it's the latter, then they're just plain evil, and they should be stopped before they actually become a monopoly. They're also being stupid, too, because they're not a monopoly yet, and Lyft is now going to eat up the Kansas market.
Sure, the market isn't all that large, but the means, methods, process required to serve it are the same ones that will absolutely be needed to cope with all the different markets, rules, and authorities out there.
A billion dollar level company can and should be doing this.
As in you mean there is little additional cost to enter the market? Sure, I'm just saying if they miss out on serving a small market, it's not going to have a huge negative impact.
But, the systems needed are important. Simple, dry runs now can prototype them, buy good will, potentially have an impact on regulations to come.
Also, UBER. That's not ordinary, or dull, or tepid. It's UBER. Cherry picking, dodgy behavior to avoid compliance, and other sketchy things seem inappropriate for such a valuation.
A lot can happen in 5 years - I am not expecting self-driving cars to be a mass-market reality before then, if only due to the speed of legislation.
* owning the fleet with up-front capital requirements
* buying insurance
* owning the parking facilities for such fleet
* operating filling/charging stations for such fleet
* providing maintenance for the fleet on an ongoing basis
* operating car washes
What exactly is Uber's competence in such setup, and why are they in a dominant position to achieve this when compared to, let's say, Hertz, ZipCar, a local car dealership, or some mom-and-pop operation that bought two self-driving cars to rent them out on a busy intersection?
http://www.businessinsider.com/how-uber-ceo-travis-kalanick-...
It's outrageous that there could even be a situation where someone is driving on the road but not covered by insurance. Looking at comments under the article, it's like people don't understand the implications of this.
Uber + Lyft just relaunched here in Portland. Drivers are required to have valid business licenses and pass a background check too. Everyone is very happy with the changes. (except our local taxi commission, of course)
The requirements involve documented regular maintenance and insurance coverage that would include passengers, not sure what's the business logic behind opposing them.
They want to have no costs to doing business, and to reap all the profits.
But I get what you're saying - at that point the profit opportunity diminishes somewhat. The upfront cost of it also discourages casual drivers who only planned to do some weekend work.
I feel like Uber could have been a great, albeit smaller, company had they concentrated on their upmarket service. Aiming to be cheaper than taxis is just a race to the bottom - but there are many people who are willing to pay more in exchange for a better experience.
Uber is having an extra hard time to compete here.
How about blacklane.com or limos.com? Both are aggregators for existing car services and allow you to specify a general class of cars.
Hairdressers and other similar jobs are indeed regulated in this way - you dont want your ear getting cut off do you?
The only reason this conversation is being had instead of the conversation about background checks on your mechanic is because one sector is unionized. If you don't understand that you don't understand the politics of the situation. Great rebuttal though - shows what we're up against.
I grew up in Kansas. Many times, the government attempted to teach me Intelligent Design and I was always given the option of opting out of being taught Evolution.
Sodomy is still illegal for any non-strait married couple. While not enforced, it is still a Class C Misdemeanor. Just the to let everyone know the governments feelings on homosexual couples.
Only 17 counties are allowed to have liquor stores, and there are 28 counties that are completely dry. (Dry counties have on average more drunk driving crashes compared to wet due to people driving further for a drink)
Thanks to the DARE program there, I grew up thinking Marijuana was more dangerous and addictive than Meth or Cocaine. (Meth is a much bigger problem in Kansas)
The legal system there is very much Guilty till proven innocent, they bully people into signing plea bargains.
I can attest... Kansas is backwards. So, I left too.. to Colorado.
Uber on the other hand, has been nothing but a blessing. Its fantastic. My girlfriend and I love it. Its cheaper than a cab here in Denver. Cheaper than driving (due to parking costs). My girlfriend and I have always felt safe.
If you disagree with Uber. Go live in Kansas for 22 years and tell me the state isn't backwards.
At one end, I think it's perfectly reasonable for the state to require more insurance coverage for Uber drivers since there will be more risk involved than a regular driver.
Background checks required by state? That's Uber's job to decide, and they do it anyway. If Uber doesn't do background checks, and there are incidents (even a small number) it will hurt their business at the end of the day. It's in their best interest to do the background checks in the manner they please.
This is a weird situation where Uber doesn't want to "employ" it drivers and pay for w/e is needed for them to do business, but at the same time their drivers require them to provide them with everything to do their job and now their source of income (employer) left the state and them jobless.
I wish we were provided with more details like how much this background check/insurance would cost. They already do both (Uber does a background & provides commercial insurance coverage) so honestly this half-written articles do nothing but make people even MORE confused on how Uber REALLY does business.
I really hate this mode of thinking. What's wrong with preventing incidents?
A background check isn't going to weed out 100% of muggers, rapists, or Enron Executives - but it will likely reduce the number of muggings, rapings, and fraud.
Your argument is basically "There's no need to inspect restaurants - if people die of food poisoning, the business will suffer."
Well, yeah - but how about we take some simple precautions to stop people getting hurt?
Privacy issues and companies making hiring decisions on non-work-relevant personal life choices.
Do you support background checks for all jobs? Nothing you said is specific to Uber. But there's a reason companies can't ask if you have children, etc.
Yes. Yes, I do.
I'm female, and on top of that, I'm part of a group that is exceptionally vulnerable to hate crimes. I'm glad I work at an company where I don't have to worry about a co-worker being a known rapist.
I'm all ears, but don't expect me to accept your conclusion.
So, excluding those offenders from isn't extra-legal punishment, its simply legal punishment.
This is, of course, different in critical ways from the general case of excluding convicts from hiring pools.
That's really what's at stake here for Uber. Taking on a risky driver isn't in their best interest, but they off-load that risk onto the driver and the public at large (externalizing the cost of those drivers habits onto the larger public while internalizing all the profits for their shareholders) which means we're the ones who have to pay the cost of the risky drivers that operate under Uber. If they paid for the risk involved, then I'd have no problem with them operating anywhere. But as I see it, if they're going to play around the legal system which has similar requirements for other industries, this seems to me that they should be subjected to the same legal requirements or that the same legal requirements be nullified for every firm in every industry in the United States (I doubt that will ever happen).
Because refusing to be friends with a rapist is also "extra-legal justice" according to your logic.
Friendship is unrelated, and you wouldn't even know if they were a felon.
And non-felons are capable of horrible crimes too. They weren't born felons.
But how much is insurance for that period going to cost? Is Uber even going to notice the difference?
Or is the problem that a 'work vehicle' is going to have no insurance the entire time it's being driven around? Even when it's not actually being used for Uber? Now that sounds unfair to make Uber pay for.
As somebody above pointed out, such accident already happened http://m.sfgate.com/news/article/Family-of-SF-girl-killed-by... although I don't know if it carries any statistical significance when you count all the Uber rides in SF.
Rushing to a hot spot seems like a flawed argument, you can do that while totally off the grid. App closed, phone off. That's probably going to get you more money, too.
You could have four of these apps open at once, do you need quadruple insurance?
The app requires no interaction, and you perform no actions for the app until it notifies you about a pickup and Uber's insurance kicks in.
> Rushing to a hot spot seems like a flawed argument, you can do that while totally off the grid.
Maybe my original example was misleading, but Uber app points an idle driver towards the areas of increased demand (and surge pricing) by color-coding them http://disinfo.s3.amazonaws.com/wp-content/uploads/2014/12/s...
> App closed, phone off.
This part I agree with, if the driver has arrived at a pick up point due to inside knowledge of relevant details, and was not guided there by the app, it's a personal ride.
I think any time the app is open, though, you can make a reasonable argument that the driver is guided where to go. However, in the US it only matters what the judge/jury says if/when such case hits the court.
How is this a bad thing?
So, in other states, drivers are not covered when they are driving to make a pickup?
Get ready for updated regulations in many areas where Uber is doing business now.
Basically it seems to me that regulation has the effect of forcing lifestyles upon people. You can't just sell people things, you have to be a Thing Seller and devote yourself to that regulatory environment and then you can sell some of the people some of the things.
Bonkers.
Once there's money involved, we are no longer talking about an agreement between gentlemen, but about a commercial transaction, and those require regulations because the incentives are different, and money does weird things to people. A driver maximizing profits has no incentive in, say, checking his brakes regularly (money spent + car immobilized for some time), while a random driver does ("yeah, I'll take a cab for a couple days, no biggie").
It would be more correct to say that the incentive problem here lies in uncompensated danger to other drivers, which for-profit drivers may be willing to ignore when tempted by money.
With Uber, as soon as you get out of the car, it's possible that the driver suddenly has no insurance in effect, until the next passenger gets in.
The answer is simple. You pay a little more for commercial/livery coverage and your passengers are covered against perils.
The background check thing is even easier. Do you want your wife picked up and driven around by a convicted rapist? For the want of Uber spending the massive sum of like $20?
I realise fully that insurance and laws and various other things make this situation different. What I'm saying is that this is an odd and nonsensical situation.
If I hitch at the side of the road I can get into a completely random car with a random driver with no trace, digital or paper, and this is not illegal (UK) and shouldn't be IMO.
But if I do the same and pay for the privilege suddenly apparently we have to start worrying about the risk of rape and badly maintained cars and so forth.
One poster asked whether I'd want my wife to get in a car with a convicted rapist.
My wife is an autonomous human being... she can hitch, or hitch and offer to pay, or hold signs up offering a few pounds for a lift, or use Uber, or a licenced taxi company. "Safety" is a variable she can consider whilst doing so.
I don't want my basic interactions with others governed by 'background checks' carried out by the state. If you do, fine. Why do you need to force me?
(I should say that I don't really respect Uber as a business because I feel OSS should be able to do this peer to peer, but that's rather beside the point).
It frustrates me because the safety argument is basically a variant on 'think of the children'. It's difficult to argue against without considering what you lose in the process.
Background checks and licensing and road worthy tests and other regulation tilt the playing field away from me and you and towards wealthy business owners.
What is so wrong with me deciding to jump in my car now and drive people home for a fee? Not a rapist, not a pedophile, just plain jane boring old me? I would like to hear the argument against that, the one that doesn't involve appealing to scare stories of the 1 in 10000 bad cookie.
Additional safeguards to common carriers make common sense to me, since you are now holding yourself out to the public, and not taking one-off or by arrangement only rides.
Kind of like the difference in regulations for airplane charter vs an airline.
The hitchhiker example and just paying one-off car rides is different than someone that advertises and holds themselves out to the public.
When you hitch hike (or pick someone up) you and the other party are taking a mutual risk together.
But if money is exchanging hands I, and I'm going to bet most people, would want the risk factor removed.