Posted on 06/07/2015 7:29:17 AM PDT by Kaslin
The revenge of the status quo is brutish. "If you attack the establishment long enough and hard enough, they will make you a member of it," humorist Art Buchwald once observed. Those words never seemed truer than at the "Uber Turns Five" celebration at its San Francisco digs Wednesday. In the disruption economy, five years can carry a ride-service giant from disruptor to establishment.
Uber CEO Travis Kalanick certainly has matured. Last year, the startup went on a "charm offensive" in an attempt to quell stories about Uber's testosterone culture. That didn't go swimmingly. A male exec told a New York editor that Uber should hire top opposition researchers to dig up dirt on media critics -- in particular PandoDaily Editor Sarah Lacy, to retaliate against her protest of the company's "sexism and misogyny." It was a nasty ride.
Still, as Kalanick likes to say, Uber is "passionate about learning" from its mistakes. This year, Kalanick brought his mother. He teared up when he talked about her.
And who introduced him? Not some oozing-money venture-capital jockey but a military wife who became an Uber "driver partner" this year. Theresa Ferguson got all choked up as she talked about how being a driver has allowed her to not only spend more time with her three kids but also volunteer one day at her son's school. "Uber has allowed me to be my own boss," she proclaimed in a touching "I am woman" moment.
Uber has raised close to $6 billion, and its valuation exceeds $50 billion. Nonetheless, Kalanick and company like to talk about the ride-service corporation as a "public service." Money? Don't be crass. Uber is all about helping people and "allowing people to serve their cities."
Uber expects to add another million to its stable of 1 million driver partners like Ferguson. Artists, consultants and stay-at-home moms use it to supplement family income, pay off student loans, etc.
Uber is good for cities, Kalanick argued. When consumers simply can push a button to get a ride, they don't need to drive their cars downtown. With fewer cars, cities don't need to build garages. There's no need for all those ugly parking meters. Uber means cities don't have to spend capital to lay down rails or buy buses. Be it noted, Kalanick offered -- and who in the room would care to argue? -- "public transportation alone isn't enough."
Uber and competitor Lyft claim they promote public safety by reducing drunken driving; why get behind the wheel when celebrants can push a button? When workers use its commuter service, Kalanick added, that reduces tailpipe emissions.
In short, Uber has the perfect business model. It doesn't have to buy cars, and it makes money letting people drive their own rides. If consumers don't like the setup, they can drive or take cabs. In San Francisco, it seems, competition has spurred cabbies to step up their game.
After five years, Uber has numbers on its side -- and that spells lobbying prowess. It wasn't that long ago that taxi companies and limousine services were trying to use their clout to put ride-service startups out of business. They had a good argument, too. They wanted to level the playing field and subject Uber and Lyft drivers to insurance standards akin to those for professional drivers.
Last year, California Assemblywoman Susan Bonilla carried a bill toward that end. It sailed through the Assembly in a 71-0 vote. Republicans, who are supposed to oppose niggling regulations, did not oppose it. Then Uber, Lyft and other ride-service startups organized their drivers and consumers. An avalanche of email outrage prompted the Legislature to tame the Bonilla bill.
This year, ride services are a giant that can crush critics. Last week, the Assembly postponed a bill by Assemblyman Adrin Nazarian to require random drug testing for freelance drivers. Uber, Lyft and Sidecar opposed the measure on the grounds that their background checks protect consumers and that making drivers show up for drug tests undercuts their business model, which relies on flexibility. Uber spokeswoman Eva Behrend told the Los Angeles Times that the bill really was about "protecting entrenched Sacramento special interests from competition." The measure tanked before it came to a floor vote. Sacramento lawmakers now fear the wrath of the ride-service world.
When Uber and like-minded businesses started, they popped up under the radar of regulators. Next, they built up a worker and consumer base that served to help them fight old-school regulation that gets in the way of individual choice and initiative. Now, Kalanick said, Uber can come into a new city and tell the mayor that ride services will reduce traffic congestion, smog and drunken driving. Right now, Uber is a low-cost transportation utopia.
What happens when Uber moves to driverless cars, as it surely will? The disruption drivers in turn will be disrupted. The ride-service giant will lose its league of freelance drivers/lobbyists and its pretext of existing mainly as a "public service" for freelance go-getters. Quoth Kalanick, "Our driver partners are the heart and soul of this company." By then, Uber will be part of the entrenched establishment -- where an organ can be replaced by a machine and soul is optional.
Uber provides a service that is almost unique in providing market setting where consumer can contract supplier on a just in time basis. If/when they get into a business they don't understand (maintaining a fleet that uses public streets) they will find themselves becoming a traditional transportation company subject to regulations they can ignore right now.
The current business model requires that the independent Uber drivers put up the capital cost of owning the car. Will Uber change to a capital intensive model where it owns the driverless cars or will it be some type of franchise model with franchisees owning one or more cars?
I must be missing something, here.
The taxi business used to be intensely regulated.
Most cities had two or possibly three officially sanctioned cab companies, and frequently the actual number of cabs was limited to a certain number.
Anyone who tried to compete against the incumbent players was, literally, violating the law.
How did Uber and Lyft get around this?
I haven't used a cab in 40 years, except from airports, so maybe the whole legal regime has changed?
outside of a small percentage of city dwellers, who in their right mind would find value in this service? the only situation i can imagine would be one where it's cheaper than getting a taxi, and since the government has an economic interest in regulating taxi drivers, it's just a matter of time until they put onerous restrictions on Uber's services.
to me, there's just no "there" there... however, if somebody has a persuasive differing perspective i'd be willing to reconsider my opinion.
So might a customer service rep in Germany answer the phone as “Deutchland Uber, Alice!”
“How did Uber and Lyft get around this?”
By presenting themselves as a tech application, putting drivers of private cars together with people who want a ride.
They skirted all taxi laws.
It’s in litigation.
“who in their right mind would find value in this service? “
Uber correctly realized that the huge pool of tech boys and hangers on want to do EVERYTHING with an app.
It’s an app.
There’s taxi apps, now, but they were a day late.
People like that it’s 1) an app 2) cash free 3) super convenient 4) they can see the car coming with a countdown, 4 minutes, 3 minutes, 2 minutes. . . instead of wondering when or if a cab is going to show up.
The taxi apps do all of the above now, though, too.
There's one other thing that hasn't gotten a lot of attention, and it may end up being the biggest threat to these companies of all: In cases where they manage to get legislative or regulatory recognition for the legitimacy of their business model, they have effectively eliminated the same legislative and regulatory barriers for their cheapest competitors. These would include unregulated "dollar cabs" and van pool services that have become commonplace in many urban areas, especially among rapidly growing immigrant groups.
They ran a background check on me. They even ran my MVR to make sure I wasn’t a risky driver. Background checks don’t mean a damned thing, anyway. Look at Bradley Manning. He had to go through a background check to handle intel and he still became a perpetrator.
http://valleywag.gawker.com/uber-driver-heres-how-we-get-around-background-checks-1596982249
Customers love Uber. Conservatives should applaud their innovation, their risk taking, their reliance on individualism, their freedom, etc.
They fight convention. They have succeeded against “the olde business model of crony capitalism.”
If your only criticism is they come from San Francisco, you are the one stuck in olde thinking, while this company succeeds all over the world.
Re: “By presenting themselves as a tech application...”
Thanks...
Now I understand.
The driverless cars won’t take off because there are too many unemployed people who will work for less in order to pay their living expenses.
Bradley Manning stayed because being homosexual and now transgendered isn’t a basis for failing a security clearance any more.
Some of the most foul smelling and disgusting hygiene I have ever come across have been from Taxi drivers.
I have not tried uber. But how can they be valued at 50 billion dollars? He better take some of those dollars and hire a very good security squad. Knuckles and Vinnie are going to come visiting from the damage he’s doing to the Medallion owners.
*Some of the most foul smelling and disgusting hygiene I have ever come across have been from Taxi drivers.*
I just used Uber for the first time. Was running late for an appointment and driving my car wasn’t an option, so Idecided to give it a try.
Was flawless, much better than a traditional taxi for sure.
What nationality was your driver?
I know in Seattle, the vast majority of drivers of services like Uber and Lyft are foreigners.
Many are muslim.
Just sayin’.
Seems like every time I get a traditional taxi the driver is an off the boat African of some sort or Middle Easterner.
My driver was born in the US, in the town where he was driving. He told me he was working as an electrician for a well known firm and got laid off. He couldn’t find work so he decided to drive for Uber. Related that he was making $20K more a year now than he ever did as an electrician.
Good for him.
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