Posted on 01/04/2015 10:27:39 AM PST by Kaslin
If you've ever stood on a cold street late at night wishing desperately and hopelessly for a cab, Uber is the answer to your prayers. Its pricing model, which includes higher fares at times when demand peaks, is designed to make sure you get a ride whenever you need it.
But instead of seeing this option as heaven-sent, some riders damn the company as Satan's spawn. On New Year's Eve, Uber boosted its New York City fares nearly eightfold to ensure the supply of drivers needed to meet high demand. Some partygoers accepted the offer rather than take the subway, wave forlornly at occupied cabs or stagger home.
The New York Daily News reported that several angry customers posted receipts showing charges of well over $100, with some vowing to boycott Uber. "The most expensive 8 minutes of my life!" fumed one. She was not the first person ever to do something on New Year's Eve that she regretted afterward.
To critics, this episode illustrates the perils of under-regulation. "Surge pricing" is just one. Passengers have been raped by drivers and had their privacy compromised. Pedestrians have been hit by drivers whose insurance may or may not cover them.
"The public safety is at risk," said Illinois state Rep. Mike Zalewski, sponsor of a bill to impose statewide restrictions. "It makes sense to have a basic set of bottom-line regulations."
Does it really? The ride-sharing companies are creating a new market, which inevitably brings mistakes and failures on the way. But the only reason for their existence is the welfare of their customers. If they damage that, they endanger their own survival.
From the news coverage of customers allegedly attacked by Uber drivers, you might forget that rapists are also found driving taxis. In October, a Chicago cabby got a 35-year sentence for sexually assaulting two passengers.
Getting into a vehicle with a stranger can always lead to a bad outcome. But there are no compelling reasons to believe that ride-sharing is any riskier than taking a cab -- and some grounds to think it's safer.
Uber claims it undertakes background checks that are "often more rigorous than what is required to become a taxi driver." But it announced a tighter system only after the Chicago Tribune reported in February that it had failed to conduct these checks on thousands of its drivers.
Uber may learn slowly, but it does learn. The bad publicity it gets from criminal drivers gives it a powerful incentive to take strong measures to avoid them.
Passengers have another protection: records, on their smartphones, of who picks them up and where. That feature deters crimes by drivers by making it easy to identify and find them. If you hail a cab on the street, you get in without knowing who's behind the wheel -- and if you disappear, no one else may ever know.
Being able to summon a ride with a smartphone app does carry risks to your privacy that flagging down a taxi does not. Uber got so much blowback from a blog item about its data on customers who had used the app after one-night stands -- to avoid the morning "walk of shame" -- that it took down the post.
But in a competitive market, protecting privacy can be good business. The question is whether passengers really care about Uber's trove of information about them. If strictly safeguarding privacy is valuable enough to influence consumer choices, ride-sharing companies will do it.
The insurance picture is slightly hazy because drivers aren't necessarily covered by Uber's policy in an accident between fares. "It could be a long and complicated process for an injured person to determine how to get compensated," Janelle Orsi, an Oakland lawyer, told the San Jose Mercury News.
But that determination will eventually be made, individually and collectively. That's what courts are for. Insurance companies will respond. If drivers and companies disregard their potential exposure, they may pay a painful price.
Uber has made its share of mistakes. When an executive talked about investigating the personal lives of unfriendly journalists and using derogatory information against them, he deserved the ensuing avalanche of criticism. But such offenses have to be weighed against the millions of rides Uber provides each month.
Heavy government regulation produced a rigid, widely resented taxi industry, whose persistent inadequacies gave rise to a useful and popular alternative. Could be a lesson in that.
Uber jacked up their rates sky high for new years eve, it was on local Houston news. Plus all the robberies and rapes committed by the Uber drivers. Might need a wee bit of regulation....
I used UBER in Boston this past September. My trips ranged in price from $10 to $60 the later at rush hour on Friday. I could have waited and hung out with my seminar friends at happy hour but something told me I need to get back to my son’s house. Sure enough, Mr. Mercat had had an accident. He’s fine but I’m glad I was there. Anyway, very clean, polite, no hassle way to travel short distances. Since they had GPS on and I knew the price before I started I had no fear of being overcharged. I highly recommend it.
Don’t want to pay, take the damn subway. It’s called ‘Freedom of Choice.’
I have used it several times including in San Diego and Washington DC. Never had a problem and it was cheaper than a cab with nicer vehicles. Funny thing is that most are Arabs but very nice and polite. They all claim to make between $50-90K a year.
Private industry has glitches and it must be eliminated by an all powerful government to “protect” us.
All Powerful government has glitches, and we must raise taxes and solve the problems with more government.
but we all know what the opposition to uber is based on. Protecting the taxi seals for the politically connected.
Let's see.. Some corrections..
Uber ensured that there would be more vehicles available on New Year's Eve by raising fares. Many people had the opportunity to get safely home rather than standing around for hours for a taxi.
I can't count the number of taxi drivers convicted of rape and robberies - pretty sure the percentage is well Uber's side for rider safety.
And regulation simply means giving the government a bigger cut of the pie; free markets are what results in your goals.
For example, you've the impression that using Uber increases your risk of rape and robbery - Uber is responding by doing more intensive background checks of all their drivers, something which very very few taxi companies even bother with.
Government is almost always the problem, not the solution. Government's solution in the case of Uber is either to tax it enough that it makes taxi cab drivers happy by eliminating the competition, or to regulate it out of existence, so that taxi cabs are happy. Neither goal serves the interest of the consumer.
I disagreed when that was news, and I disagree now.
I say nail the bastards.
There are a number of valid arguments on both sides of this issue, but my take is that this business model isn’t a very sound one and won’t last long. The problem is that it relies on a steady pool of “workers” who are engaging in something that is often prohibited explicitly under the terms of their insurance policies. At some point this risk is going to be priced into the business model at different points in the transaction chain (the price that drivers are willing to accept to pick up a ride, the supply of drivers, etc.), and I’m not sure a company like Uber will survive once that happens.
Uber = Profiteering syndicate succeeding on the basis of peoples’ emotional needs simplistically being met by a lawless and irresponsible corporate entity because they’re all too damned lazy to change their own local taxi services...
...the conservative argument supporting Uber is specious.
I think the only activity that is prohibited under the insurance policy is the time of the paid ride. And from what I understand, Uber's own insurance takes over at the start of the fare and ends when the customer is delivered to the destination, whereupon the driver's own insurance coverage returns to force.
Pretty sure that by taking a fare, the driver's insurance won't cover an accident while transporting and delivering that fare. But it doesn't invalidate the policy - and if I was an insurance company, I'd have been knocking down their door to offer coverage for during the fare - likely get a very disproportional return on my money for very low risk.
If there's enough market demand, it wouldn't surprise me that by the next holiday season, they'll be yet another alternative that ‘cuts Uber’s surge pricing in half.’
The conservative argument should be to roll back the regulation of taxis - that's what created Uber and other ridesharing programs. Cutting back government should restore the marketplace to being fully market driven.
I'm sure most insurance companies would be willing to extend the policy to cover the driver and any passengers. The problem for most drivers is that this would be a commercial insurance policy rather than a personal one, and would likely be very expensive. Some carriers may even require drivers to have a commercial registration for the vehicle.
Might need a wee bit of regulation....
Not all problems need govt regulations, at least that is the way conservatives used to look at things.
I'd fight any denial of claim - what, my insurance no longer covers my commute to and from work? I bet however that the claims were expanded to include Uber by the victims' lawyers, assuming that Uber has deeper pockets and would be willing to pay out to make problems go away. If I were Uber, I'd of course fight those claims tooth and nail - not to mention that this would put every business on the planet on the hook for their employee's commutes to and from work.
Trying for a claim, and actually winning, of course, are two completely different things. I'm not sure that it'd survive through the full court process.
I should probably also note I have never used Uber, nor plan on offering any Uber rides either.
"Surge pricing," or "floating prices," or "supply and demand." Sheesh.
If demand rises the short-term price will... drum roll please... rise! Shocking, huh? If the government enforces price controls, then... drum roll please... there are shortages in supply. Surprise!
I have heard $300 fares in Austin TX after the SXSW (South by Southwest) music festival.
Does anyone put a gun to their heads and force them to pay $300 for the rides?
One big difference is that my insurance policy does not exclude coverage while I am traveling on company business, but it does specifically exclude coverage if I operate as a de facto cab service.
It's definitely a gray area, but Uber took it upon itself to expand their coverage because they knew they were likely to be on the losing end of a lot of claims.
From what I understand, you don’t really know what the fare is until after the fact.
The drivers make some percentage of the fare so they are motivated to work the bar closing times.
Hey, what’s a floor full of vomit?
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