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Government Transportation

Getting Over Getting Over Uber: Tim O'Reilly Does the Math 385

Susan Crawford yesterday published at Medium a critique of Uber and similar ride-coordinating services, in the form of a kind of paean to the American taxicab. Though she didn't start out with negative feelings for Uber, Crawford writes, her sentiment has swung away from objections to taxis (such as that they seek unfair protection from competition) to an extravagant defense, though it comes with a long list of "shoulds": "[Cities] should be focusing on making their taxi services better," she writes. "Taxis should be more accessible to everyone. Taxi fares should be low, predictable, and uniform. Taxi geographies should be wide. Taxis should be clean, fuel-efficient, driven by trustworthy, well-trained drivers, and available for frictionless electronic hailing." Even with the flaws that list implies, Crawford's description of how well taxis work now is more positive than I've found to be true: "Their rates are regulated and set; their pricing is transparent and can be double-checked (just look at the meter, which is itself regularly tested); they look like a uniform fleet; they are subject to very strict licensing and safety requirements. With rare exceptions, they don’t employ surge/congestion pricing schemes."

Tim O'Reilly has written a response, calling Crawford's arguments "puzzling and unconvincing." O'Reilly dissects some of the math behind the business of driving others for money, as it applies to both conventional taxi drivers and "gig economy" drivers, as well as some of the qualitative effects of ride-dispatch services; surely some readers will take issue with his figures and examples, but they provide a plausible case for doubting Crawford's rosy picture of taxis and dark view of modern app-dispatched rides. O'Reilly writes: "Regulation is not a good in itself. It is a means of achieving public goods. And so far, it is pretty clear that Uber and Lyft (and in particular, the competition between them) are improving the transportation options in American cities. Regulators should be using the opportunity to revisit the old way of doing things rather than trying to make the new conform to outdated rules that no longer serve their purpose."
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Getting Over Getting Over Uber: Tim O'Reilly Does the Math

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  • by russotto ( 537200 ) on Saturday October 17, 2015 @10:37PM (#50752029) Journal

    ...but then a taxi lobbyist dropped a big bag of Benjamins on my desk, and what's a blogger to do?

    • by Anonymous Coward on Saturday October 17, 2015 @10:47PM (#50752055)

      I didn't care about Uber till slashdot started posting stories about it for money. Now I am anti-Uber, anti-slashdot.

    • Here is her actual argument:

      This fight is about public values. When it comes to city-wide transport and communications networks, serving everyone at a high basic level fairly—including drivers—is more important than permitting a single company to make enormous profits from a substitute basic private service.

      To be honest, I'm not really sure what is trying to say here. Does anyone here get it?

  • by SuperKendall ( 25149 ) on Saturday October 17, 2015 @10:51PM (#50752069)

    Taxis should be more accessible to everyone. Taxi fares should be low, predictable, and uniform. Taxi geographies should be wide. Taxis should be clean, fuel-efficient, driven by trustworthy, well-trained drivers, and available for frictionless electronic hailing.

    Congratulations, you just described Uber, and now understand why it exists.

    The only thing limiting availability of Uber in fact, is governments and taxi cartels you seek to improve... if taxis could be any of those things, why aren't they already since they have had decades longer to do so? If you think the "city" can make the taxis into those things, look around at the barley kept -up infrastructure and crumbling streets and answer the hard question of how they could do that one thing well when so many other things have been done poorly.

    If wishes were horses I wouldn't need taxis OR Uber, but they aren't so I do

    • by preaction ( 1526109 ) on Saturday October 17, 2015 @11:27PM (#50752165)

      Surge pricing is exactly the opposite of low, predictable, and uniform.

      • It's a trade-off. While the price might not be known until it is booked what becomes predictable and uniform is the availability of a ride. Like all price controlled good taxi's become impossible to find when you really want them.

    • look around at the barley kept -up infrastructure

      I'm amaized it still works.

    • In the US only (Score:5, Informative)

      by aepervius ( 535155 ) on Sunday October 18, 2015 @02:39AM (#50752481)
      In western europe for example, taxi are geographically widespread (for example in germany they are forced to take negative value fare in remote area), their price is regulated but uber is not and uber DO surge pricing. So taxi fare is uniform and predictable (low is a question of perspective). Taxi are driven by trustworthy driver , german regulation make sure of insurance (commercial) is there and there is a test in many country. Uber not so much. Taxi are accessible to everyone as over a zone some country imposes a minimum number of accessible handicapped taxi. All of those Uber does not really do. We even have in germany an apps on smartphone to hail taxi (at least in my region). Uber DO LIE on pretending there is driver nearby. Uber bombed with fake request their rival. Both of which would be a fraud in germany for example. take off the pink glasses in many countries in western europe Uber is not so great , it is only a newcomer which want to break laws to its disadvantage, laws mostly protecting consumer NOT taxi.

      Now we know that US law are often corporate blowjobs (dealership, taxi medaillion etc..). But Uber is not so great either. What do you think will happen if taxi get deregulated ? Well i will tell you : the most common minimum denominator that's what will happen.
      • by swb ( 14022 )

        If taxis are so great in Germany, then Uber should fail massively.

        If Uber hasn't failed, then despite your utopian view of taxis, the market believes otherwise and is willing to accept whatever tradeoffs Uber offers in exchange for whatever benefits Uber provides over taxis.

        • Re: (Score:2, Insightful)

          Once again, Uber is not following the laws so they have the advantage over taxi's whether they provide a good service or not. Why do people have such a hard time understanding this? I could have paid 50% less for my house too if the house builder didn't have to follow regulations that keep me and my family safe in the end.
          • Building regulations are also largely bullshit, houses that have stood 100 years are supposedly unsafe by these standards. (OK, there is some survivorship bias, but people can actually figure out how to live without the government, and Uber is not hiring children driving cars with no windshields)
          • by swb ( 14022 )

            Risk analysis is part of the market dynamic.

            You say that taxis have essential regulations necessary for their service, that the regulations reduce the risks associated with the rides.

            The market says differently -- the perception that most people have is that Uber rides aren't risky, and for its customers they are willing to forgo the presumed risk amelioration of the regulations in exchange for an Uber ride vs. a taxi. If Uber rides actually turned out to be higher risk than taxis, then people wouldn't tak

      • I see a lot of people concerned about what will happen when Uber overturns regulations and kills traditional taxis. Don't be.

        Uber is a commodity. They have to grow as fast as possible if they want to remain the top brand. But they're spending tens of millions of dollars of investor money to overturn laws not just for themselves, but for the dozens of competitors waiting in the wings. Once the laws are overturned, it's not like the barrier to entry is that high. I ride Uber 5-10 times per month on business t

    • What the author doesn't understand is that what she says taxis need to be is not accurate. Everything comes at a price. The beauty of a free market is it will tell you how much people are willing to pay for accessibility, predictability, uniformity, cleanliness, fuel efficiency, trustworthiness, and availability. There is absolutely no way for a monopoly taxi service to know these things. There is no feedback to help them adjust. Even Uber can't know these things. It is a process of discovery that needs to

  • by jmd ( 14060 ) on Saturday October 17, 2015 @10:52PM (#50752073)

    Last May when my auto insurance policy renewed there were a few pages enclosed. Adding / detracting language from the previous policy. While not stating Uber or Lyft by name it was clear that the insurance company was writing them completely out of the picture.

    • by Frosty Piss ( 770223 ) * on Saturday October 17, 2015 @10:56PM (#50752083)

      Last May when my auto insurance policy renewed there were a few pages enclosed. Adding / detracting language from the previous policy. While not stating Uber or Lyft by name it was clear that the insurance company was writing them completely out of the picture.

      And this is a good point. While Uber claims to have bazillions to insure payments in case of accidents, much of the liability will be negated when the driver's actual insurance company denies your claim for injury. And as well, your own insurence company will bail out as well.

      Uber / Lift is an unregulated taxi service staffed by drivers that have met a non-existent bar for entry.

      Myself? I always hire a towncar.

      • Re: (Score:2, Interesting)

        by hawguy ( 1600213 )

        Last May when my auto insurance policy renewed there were a few pages enclosed. Adding / detracting language from the previous policy. While not stating Uber or Lyft by name it was clear that the insurance company was writing them completely out of the picture.

        And this is a good point. While Uber claims to have bazillions to insure payments in case of accidents, much of the liability will be negated when the driver's actual insurance company denies your claim for injury. And as well, your own insurence company will bail out as well.

        Uber / Lift is an unregulated taxi service staffed by drivers that have met a non-existent bar for entry.

        Myself? I always hire a towncar.

        Isn't Uber's liability insurance exactly for the situation that you describe? It seems like it would be pretty useless if it were secondary insurance that only covered accidents over and above what is paid out by the driver's insurance.

        They even say that it's primary insurance:

        http://newsroom.uber.com/2014/... [uber.com]

        $1 million of liability coverage per incident. Uber holds a commercial insurance policy with $1 million of coverage per incident. Drivers’ liability to third parties is covered from the moment a driver accepts a trip to its conclusion. This policy is expressly primary to any personal auto coverage (However it will not take precedence over any commercial auto insurance for the vehicle). We have provided a $1 million liability policy since commencing ridesharing in early 2013.

        They have their Certificate of Insurance docs online [uber.com] for each state.

      • by taustin ( 171655 )

        The problem with Uber's insurance is that it only covers their driver. In an accident where the other driver is at fault, Uber's insurance won't cover the damage, or injuries to their driver or the passenger. If the other driver is uninsured, you're just hosed, because the Uber driver's own insurance won't cover them while they're driving for money. There have been lawsuits over this, and it's not pretty.

        • The problem with Uber's insurance is that it only covers their driver. In an accident where the other driver is at fault, Uber's insurance won't cover the damage, or injuries to their driver or the passenger. If the other driver is uninsured, you're just hosed, because the Uber driver's own insurance won't cover them while they're driving for money. There have been lawsuits over this, and it's not pretty.

          Interesting. I did not realize that was the case, and that is a big problem. That leads me to ask....what about disability if you are a driver and hit by uninsured?

      • by KGIII ( 973947 )

        Me? If I want a driver then I hire one for a set period of time. It's usually in 4, 8, or 16 hour slots - sometimes with a change in drivers. I typically only hire a car service when I'm at my place in Henderson because I hate Vegas traffic. It's really not that expensive unless you get something stretched. An added bonus is that if I'm going to gamble a bunch then my driver is usually also a security professional. I treat them like humans, invite them in with me, and entertain them as well as myself.

        If Ube

      • That's not how self insurance works. Insurance companies go after the money that is all. If the driver's insurance bails out then the default will fall back onto Uber, and failing that onto the driver itself.

        You don't magically end up with nothing if an insurance company is missing. A friend of mine was recently hit by an unlicensed uninsured person driving a stolen car. His insurance company is covering himself, and they have then taken the other driver to court and his wages are now being garnished to pay

  • Said it before (Score:4, Interesting)

    by rsilvergun ( 571051 ) on Saturday October 17, 2015 @10:55PM (#50752081)
    say it again. It's not the service, it's how they treat their employees, e.g. by calling them contractors to get out of paying for their Health Care, Unemployment, tax and other benefits (as well as their commercial insurance and proper background checks). Right now Uber is externalizing all those costs. Either onto the driver or eventually society (since we more or less don't just let people die in a gutter in this country, yet...). Their entire business model falls apart as soon as those costs aren't externalized. Look at all the 'Uber for...' companies and how quickly they shut down when their told that they have to treat people who are a core part of their buiness as employees...

    Uber is a race to the bottom and a sign capitalism is starting to break down...
    • Re:Said it before (Score:5, Informative)

      by phantomfive ( 622387 ) on Saturday October 17, 2015 @11:04PM (#50752105) Journal
      You shouldn't say that anymore, because taxi drivers aren't necessarily any better off [washingtonpost.com]. The guy in that story was on Medicaid, you were paying for the taxi driver's healthcare.

      Personally, I don't think healthcare coverage should be related to employment at all. It really doesn't make sense for them to be tied together, and makes people afraid of quitting a lousy job that they hate.
      • Just because the Taxi cab drivers are being abused doesn't mean Uber isn't abusing their drivers. Here's a crazy idea: Why don't we protect _both_ groups of workers? Crazy? I know, right?
        • by AK Marc ( 707885 )

          Why don't we protect _both_ groups of workers? Crazy? I know, right?

          Sounds like a complete change from your first post. The reason you don't like Uber (compared to a taxi service) is that Uber doesn't treat its workers well.

          Now, you are saying your first post was 100% in error, and that all hire-car services should be regulated to a standard greater than taxis currently face.

          Though, I'd question the result when comparing a freelance uber driver who drives 10 hours a week at changing and unpredictable times for extra pocket money. When you require greater regulations to

        • Here's a crazy idea: Why don't we protect _both_ groups of workers?

          Because employees are not "better protected" than contractors. They are just differently protected. Employees generally receive health, retirement, and vacation benefits. Those are paid for by lowering their pay. Employees also have less control over their working hours and conditions. Plenty of people prefer to work as contractors.

      • Personally, I don't think healthcare coverage should be related to employment at all. It really doesn't make sense for them to be tied together, and makes people afraid of quitting a lousy job that they hate.

        On a (nearly) unrelated note, the linkage of health insurance to jobs is a lingering side-effect of WW2. During WW2, wage and price controls limited the ability of employers to lure talent to their companies since they couldn't offer higher wages as an incentive. But they COULD offer health insurance

    • Re:Said it before (Score:5, Insightful)

      by Moridineas ( 213502 ) on Saturday October 17, 2015 @11:12PM (#50752129) Journal

      Wait, you think most taxi drivers are employees with full benefits? Not so at all. So are the evil taxi companies just selfishly "externalizing" all their costs?

      See, e.g.:

      http://www.washingtonpost.com/news/wonkblog/wp/2014/04/16/new-york-court-guts-a-groundbreaking-health-care-fund-that-would-have-changed-taxi-drivers-lives/ [washingtonpost.com]

      I took two Ubers a month ago in Minneapolis. The first driver was a young woman, an undergrad, studying computer science. She drives Uber about 15-20 hours a week to help cover college and living expenses. At 20 hours a week, she would not be eligible for full benefits anywhere.

      The second driver was a retired lawyer who drives Uber whenever he feels like it, to keep active and talk to people (we shared some law stories, so I'm quite sure he was telling the truth about being a lawyer--not that *I'm* a lawyer!). He's retired and doesn't drive enough hours--or regularly enough--that any business in the country would consider him an employee.

      Small sample size, but pretty interesting.

      Uber drivers do not work set hours, have no obligation to Uber (other than completing a drive if they agree to start one), do not give two weeks notice when they quit, can work for the competition any time (simultaneously even!), etc. It baffles me that anyone would consider them employees.

      • by Uberbah ( 647458 )

        Small sample size, but pretty interesting.

        Also pretty irrelevant in the grand scheme of things, as anecdotes tend to be.

        • Not true at all. In most cities neither of these drivers would be able to become taxi drivers even if they wanted to. They have freedom to do as they choose. That seems to matter a lot to me.

      • by KGIII ( 973947 )

        You found one that doesn't. That's good. You can probably find more. What you can't find is Uber drivers to counter his example (as far as I know). However, to be honest, that's not even remotely my complaint with Uber. I'm just pointing out that you're likely being down-modded because that's not a very good argument.

    • Re:Said it before (Score:5, Informative)

      by jcr ( 53032 ) <<jcr> <at> <mac.com>> on Sunday October 18, 2015 @01:06AM (#50752347) Journal

      it's how they treat their employees, e.g. by calling them contractors

      They ARE contractors, you moron. They set their own hours, they go where they want to go, they don't have to rent a medallion, they're working when they turn on the app, and they're not working when they turn off the app. Uber is a booking agent, not an employer. Nobody puts a gun to anyone's head to get them to drive for Uber, and I've seen plenty of drivers who work with Uber, Sidecar and Lyft, and they're perfectly free to do that.

      -jcr

  • Uber actually comes (Score:5, Interesting)

    by phantomfive ( 622387 ) on Saturday October 17, 2015 @11:01PM (#50752097) Journal
    I generally avoided Uber, but last year I needed a taxi to get to the airport. I called two different taxi companies, and neither one had any taxis available to pick me up. Uber came right away, and was cheaper than a taxi.

    Generally it's easier to get an Uber than a taxi, unless you're right in the middle of a big city. And it will be a long time before traditional taxi companies get their game together enough to equal that.
    • by Moridineas ( 213502 ) on Saturday October 17, 2015 @11:17PM (#50752137) Journal

      I generally avoided Uber, but last year I needed a taxi to get to the airport. I called two different taxi companies, and neither one had any taxis available to pick me up. Uber came right away, and was cheaper than a taxi.

      I had the exact same experience. I've ridden Uber exactly three times. The first was after I tried getting a taxi to the airport in a medium-sized city around 3pm on a weekday. 45 minutes before a taxi would show, plus some kind of surcharge for the hour--was going to be like $35, pre-tip. Uber arrived in about 45 seconds and was $18. I even tipped the guy a $5 because he carried 3 of us and he picked up our suitcases...

    • by Malc ( 1751 )

      The last two times I've tried to get an Uber I've ended up taking public transport. Just last night I tried to get one outside a Tube station in west London. The app said 3 mins until pick-up, until I actually tried to hail one, at which point it jumped to 11 mins and suddenly all the vehicles nearby vanished from the map. When I tried to reserve it it sat there for a bloody age before flashing up a driver. Somehow it got cancelled. This is the second time I've seen this. Given that I've only used it

    • I would have reserved a taxi the day before, personally.
  • by phantomfive ( 622387 ) on Saturday October 17, 2015 @11:23PM (#50752151) Journal

    "Regulation is not a good in itself."

    I wish more people realized that. How many times have you seen people arguing, one side saying, "Regulation is bad!" and the other "Regulation is good!" It's one of the dumbest arguments ever, because both sides are wrong.

    Some regulation is good, and some regulation is bad. If you want to know which is which, you need to actually look at the regulation itself.

  • by jmd ( 14060 ) on Sunday October 18, 2015 @03:22AM (#50752547)

    I live in Chiang Mai Thailand. I suggest if you really really like the idea of a 'gig economy' then move here for a few months and see how that idea works out in real life. I don't think you'll care for it much as only a few live a decent lifestyle.

    • You're missing the point. A gig economy is fine as long as someone else is doing it. If that was applied to their jobs, I doubt they'd be quite so keen.

      • by jmd ( 14060 )

        Umm that was my point. It doesn't work out well for the masses.

        • Re: Gig Economy (Score:4, Insightful)

          by cyber-vandal ( 148830 ) on Sunday October 18, 2015 @08:03AM (#50753083) Homepage

          And my point is that they won't be able to see that. Our great-grandparents fought and suffered to get rid of that kind of exploitation and our society improved immensely as a result. These idiots are desperate to bring it back because they don't understand that consumer capitalism needs people with disposable income.

    • by GuB-42 ( 2483988 )

      Interestingly, in Thailand (at least in Bangkok), if you want to take a ride, you better make sure it is in a regulated taxi. Otherwise you are likely to pay at least double price, or worse.

  • by O('_')O_Bush ( 1162487 ) on Sunday October 18, 2015 @06:27AM (#50752827)
    "Their rates are regulated and set; their pricing is transparent and can be double-checked (just look at the meter, which is itself regularly tested)"

    Oh how naive. The way taxis rip people off is by taking long routes and adding distance/time. That is specifically the scam that Uber avoids by route planning. If she thinks they are trustworthy just because they have a visible meter, she is an idiot.

    I bet she wholeheartedly agrees to see all the recommended specialists every time she goes to the doctor's office, and makes sure to get as many undercarriage coatings as she can from the car dealer because their pricing is transparent too.
  • by fluffernutter ( 1411889 ) on Sunday October 18, 2015 @08:13AM (#50753131)
    Uber basically wants to do the same thing as H1Bs except with local people. Basically we have a mass of people who are making a livable salary but as consumers we think they cost too much so we usher in Uber despite what the laws say. Sorry but that is no different then crying foul on Disney for spinning the H1B laws and having their domestic employees training the easier foreign once as they get kicked out the door. So before you say H1Bs are a bad thing again, look in the freaking mirror.
    • How are those two things related at all? The H1B program brings non-citizens into the US to work temporarily. Uber doesn't bring non-citizen drivers to the US, and uber drivers (in most cases) make better money than cab drivers. Your argument makes no sense.
  • Kale should taste like bacon. That would solve the kale surplus problem. Next!
  • by Applehu Akbar ( 2968043 ) on Sunday October 18, 2015 @09:25AM (#50753379)

    Is that each user JOINS a ride sharing service. Every time a conventional cabbie picks up a fare, he rolls the dice: will this ride be the one that leaves his riddled, bloody body in an alley? Giving rides to people who have subscribed to your service is a huge security advantage.

  • by John Jorsett ( 171560 ) on Sunday October 18, 2015 @11:49AM (#50753889)

    though it comes with a long list of "shoulds": "[Cities] should be focusing on making their taxi services better," she writes. "Taxis should be more accessible to everyone. Taxi fares should be low, predictable, and uniform. Taxi geographies should be wide. Taxis should be clean, fuel-efficient, driven by trustworthy, well-trained drivers, and available for frictionless electronic hailing."

    And competition is the way to achieve those ends. All those "shoulds" have existed for decades with no action taken. Suddenly Uber arrives on the scene and people are talking about how to address them.

  • by Anonymous Coward on Sunday October 18, 2015 @01:36PM (#50754349)

    In NYC I don't have any of these Uber-fixed problems. The problem I have repeatedly:
      - I cannot communicate the destination to the driver.
          - I attempt to, but the driver gives me no feedback.
          - The driver types the address into a GPS from the 90s, distractely while driving, incorrectly, for example confusing S 4th St with 4th St, or 23rd Pl with 23rd Dr. Handing the driver a printout from Google Maps doesn't solve it. Cutting off the address, so the driver has to read the map and can't just type like a monkey, still doesn't solve it.
      - The driver cannot find the destination.
          - I name a landmark, "Bronx Zoo," and the driver unreasonably says "where's that?"
          - The driver attempts to find his own way to the destination by memory and makes many wrong turns. He even turns off the meter apologetically, so he's not trying to scam me, but I'm still late, and it would be avoided by being forced to use a navigation app.
          - The driver makes poor decisions about traffic that Waze or even Google Maps would have avoided.

    It means, to take a cab and have it actually work, I have to use maps on my phone and give the driver directions. About half the time I can get where I'm going without doing this, but the other half the time there is a major fuckup like wrong turns or going to the wrong place or not knowing where the place is period until I tell him. This is a pain in the ass to do with your friends, because they take everything personally and get hysterical. Doing it with a stranger who is not in German efficiency-mode but is in insecure face-saving third world asia mode quickly becomes the most stressful part of my day.

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