Mo Money, Uber Problems (Robert Coon On Politics)

by Robert Coon  on Wednesday, Jul. 23, 2014 1:10 pm  

Robert Coon

(Editor's Note: This is an opinion column.)

In 1997, The Notorious B.I.G.'s "Mo Money, Mo Problems" was released posthumously and quickly rose to No. 1 on the Billboard charts. If the folks at Uber are looking for a corporate theme song, I think it would be an appropriate choice.

For those of you who aren’t familiar with Uber, it’s a self-described "technology company"[1] that uses a mobile smartphone application to connect for-hire drivers with consumers looking for ground transportation. I’ve been using Uber for several years now when traveling out of state and the app provides a definite upgrade from traditional taxi service in terms of quality, convenience and dependability.

To use Uber consumers start by downloading the Uber app to their smartphone[2] and then provide some basic personal information – including name, phone number, and credit card billing information. Through the app, users looking for a ride can request on-demand ground transportation (at varying levels of service[3]) by selecting a pickup location on the app’s map, and then can visually monitor their driver’s approach until he or she arrives at their location. In the event that the driver has difficulty finding the user at the designated pickup location[4], the app enables them to call the user’s cellphone in order to clear up any confusion.



In my view, Uber offers a significant step up from traditional taxicab service by providing consumers with a number of new conveniences:

  • Fare quotes based on start and end location that can be obtained before a user even decides whether they want to request an Uber ride.
  • Direct credit card billing through the info stored in the app (with no additional tipping required or expected).
  • The name, photo and contact information for each Uber driver, and perhaps most importantly, a record of who your driver was on each trip – handy in the event that you leave something behind accidentally and need to retrieve it.
  • A user-based review system in which customers provide feedback on drivers and vehicles that helps the company with quality control.
  • Emailed receipt that arrives minutes following completion of a ride.

Through their use of cutting-edge technology and a focus on delivering the services that consumers have demonstrated they want, the folks at Uber have created a truly consumer-oriented ground transportation experience. And as a result, they’ve experienced massive growth and rapidly increasing popularity across the globe.

Growing Presence and Growing Opposition

Uber, and competing ridesharing company Lyft, have become the apps of choice for tech-savvy travelers in cities across the country – and worldwide.  Uber, which launched in 2009, boasts a presence not only in large metropolitan areas like Chicago, Atlanta and New York, but also in mid-sized cities like Omaha, Tulsa, Albuquerque and Toledo.  In fact Uber is currently available in more than 145 cities and in 41 countries around the world.[5]

But the beneficiaries of Uber’s rapid success go well beyond the company’s subscribers who use the service to get around town. Uber has received significant financial backing from “institutional investors, mutual funds, private equity and venture capital partners” and recently completed a round of funding in June that valued the company at $18.2 billion.  It has also become a huge draw for job seekers, with an estimated 20,000 new drivers a month signing up worldwide to work with the company in 2014. 

But despite all the positives, Uber’s growth hasn’t been without controversy.

Mo Money, Mo Problems
The overwhelming success that Uber and other ride sharing companies have had as they’ve entered new markets has drawn significant opposition in a number of cities (and states) from regulators, local officials and – not surprisingly - the incumbent taxicab industry.

While Uber partners with existing commercial sedan companies for many of their services, it’s the UberX product – which allows for ride sharing in drivers’ personal vehicles – that has drawn the most opposition. In late June, Washington, D.C.-area taxi cab drivers staged a traffic jam protest against ride sharing services on Constitution Avenue, causing gridlock and delays throughout downtown. The state of Virginia recently slapped Uber and Lyft with more than $35,000 in civil penalties and ordered them to cease and desist until they received the proper authority.  (Both companies have indicated they believe they’re in compliance with existing laws and will continue operating.) Countless other cities have thrown up regulatory obstacles to the ride sharing companies, not to mention the host of lawsuits that have been filed by limo and taxi companies.  

In Little Rock, where Uber and Lyft recently started advertising for drivers to join their network, City Attorney Tom Carpenter notified the companies that they’re subject to taxicab regulations, permit requirements and the city’s transportation code, and that failure to comply would be a violation of city ordinances and punishable by fines. Moreover, Little Rock City Director Joan Adcock has become an ardent opponent of the ride-sharing companies, citing concerns over safety and accountability. According to a recent article in the Arkansas Democrat-Gazette, Adcock has been "working with City Attorney Tom Carpenter for months trying to find out what Little Rock could do to prevent such ride-sharing" based on the opinion that "we don’t want them here." 

Want to go to the River Market or Dickey-Stephens on a weekend night but don’t want to deal with the cost or hassle of parking? Out with friends at one of Little Rock’s great live music venues and need a designated driver to get home? Ever called for a cab and had it fail to show up? If you ask me, we do want Uber/Lyft here – and I don’t think I’m alone.

Finding A Workable Solution
In order to help alleviate some of the objections they’ve encountered across the country, ride sharing companies have pro-actively implemented a number of safety and accountability measures[6] – including extensive background checks on drivers and commercial insurance policies to cover drivers and passengers – which in some cases, exceeds coverage requirements placed on the taxicab industry.

Additionally, while the taxi industry has generally opposed their new competitors, in a small handful of cities, like Chicago and Boston, taxi drivers have actually partnered with Uber and become part of their network – making their services more readily available to the Uber subscriber base.[7]  Some have gone even further, leaving existing taxi driving jobs – with their higher operating costs and lower revenue – and starting their own business as Uber drivers in order to take advantage of the greater flexibility and higher earning potential[8] this new business model offers.

Any time technology evolves, it presents challenges for policymakers, but it also presents opportunities. Every city, including Little Rock, has a duty to ensure that its residents are protected and that businesses operating in the city can be held accountable. That’s one of the basic roles of government. What’s discouraging is that the initial reaction to the prospect of ride-sharing companies coming to Little Rock by some inside City Hall thus far has been to spend months trying to figure out how to keep them out, rather than spending that time working to develop a practical regulatory framework for this new technology that both meets the city’s objectives and enables the companies to provide services here – services that consumers have clearly embraced.

Little Rock has come a long way in recent years, and we have a lot to be proud of. To reject progress when it knocks on our door would only be a step backward. Let’s embrace the competition and innovation these companies provide to consumers and potential new business owners, and not be swayed by unfounded fears and industry protectionism. After all, the horse and buggy salesmen weren’t too happy with the first cars came along – but we all know how that turned out.
________

[1] Uber goes to great lengths to emphasize it is NOT a transportation company.

[2] Apple, Android, and Windows Phone versions available. For those of you still living in the 2000s, I hear there’s even a Blackberry version …

[3] Think Luxury car, SUV, Black sedan, or UberX – which is a ride-sharing service in which use their personal vehicles (reserved at a lower price point).

[4] Occasionally the GPS can be off a little.

[5] For a list of locations where Lyft is available, click here.

[6] Uber: http://blog.uber.com/driverscreening; Lyft: https://www.lyft.com/safety

[7] Uber says that it welcomes any taxi driver that wants to try the platform as a driver partner. 

[8] Uber drivers receive on average 80 percent of the fare charged.  

(Robert Coon is a partner at Impact Management Group, a public relations, public opinion and public affairs firm in Little Rock and Baton Rouge, Louisiana. You can follow him on Twitter at RobertWCoon. His opinion column appears every other Wednesday in the weekly Government & Politics e-newsletter. You can subscribe for free here.)

 

 

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