This is not an uncommon pattern. Regulations hurt experimental young companies challenging a status quo. Evading regulations (not a taxi, not an employer, etc.) allowed uber to become a large incumbent. Regulations tend to lock the status quo in place, and the status quo now is that Uber is a large incumbent.
I'm fairly sure they meant evading regulations. One means to structure your business in such a way that current laws are not directly applicable. The other means to ignore them completely. Unless you were trying to make an argument that Uber did not evade regulations and in fact broke the law?
It doesn't take a triple digit IQ to understand that Uber has operated a fundamentally illegal business model that does not respect the localities in which they operate.
In the past (pre-Uber), if you made this amount of money by engaging in large-scale, coordinated law breaking, you were called a gangster and got a big old nice RICO charge.
Don't be confused or blinded by the valuation. That is a byproduct of breaking the rules. The rules were not broken because they were unfair - that's a meme - you don't get to pass arbitrary judgement of which laws you do and do not respect (in theory). As a business, if you do not like the legal environment (rules) of a certain location, the logical (and respectable) choice is to not operate in that region/location.
My view is 10x more harsh on companies breaking the law in a coordinated manner than compared to an individual person.
> The rules were not broken because they were unfair - that's a meme - you don't get to pass arbitrary judgement of which laws you do and do not respect (in theory).
Thank goodness it was only in theory. The taxi industry was and is terrible, the only thing propping it up is regulatory capture.
> As a business, if you do not like the legal environment (rules) of a certain location, the logical (and respectable) choice is to not operate in that region/location.
As a consumer, I'm glad that the rules were systematically broken in a way that benefitted everyone except the taxi industry.
I can definitely get aboard the taxi hate train, but do bear in mind that there has been a higher incident of sexual assaults tied to uber drivers over taxi drivers - it's not a free win for everyone, they broke both rules intended for regulatory capture and those intended for public safety.
This is counter to my experience. Every one of my female friends prefers Uber to taxi's because they feel much safer. They've all had at least one taxi incident where they were afraid for their well being but haven't had a single one with Uber despite using Uber far more.
This makes sense to me because it's far easier to track down the an Uber driver than a taxi driver.
I'd love to see the statistics. That aside, the taxi industry collects zero feedback from customers on their drivers, so taxi drivers had no incentive to be polite, keep their vehicles clean, etc. The worst uber driver I've had was about on par with the best cab drivers.
Not sure about other jurisdictions, but in Chicago, you can call 311 to report a taxi driver. Just need the cab number. I called a few times when cabs nearly struck me as a pedestrian in a crosswalk with a walk signal. Couple of them, I was close enough that I was able to smack a window. Don't know if anything ever happened from those complaints, you dont get feedback after a complaint.
> higher incident of sexual assaults tied to uber drivers over taxi drivers
citation with statistics? I don't know what world you lived in, but there was no lack of local news stories involving crimes by taxi drivers pre-ridesharing and there is a reason why taxi drivers were commonly suspects on crime drama shows like Law&Order.
The lack of meaningful comparison in every article on the topic always bugged me. I'd believe Uber was worse. I'd believe Uber was better. I'm reading your article partly because I want to know which.
Not necessarily true. Uber the company maybe operating at a loss but rides are not operating at a loss AFAIK. Kind of like Amazon in its earlier days, where they reinvested their revenue in growth.
There are no real magical accounting tricks. At the end of the day (quarter) you will be forced to account for your cashflow. Cashflow always gives the at the moment reality of the company. Before folks reply - Amazon doesn't count. Amazon is an enigma.
Not a big fan of Uber, but on the other hand a lot of cities were operating crony "taxi medallion" rackets that were enriching vested taxi interests and speculators, but hurting drivers and riders.
Ridesharing is more convenient, safer, cheaper, and more environmentally friendly. There's less idling, less aimless driving, less congestion, more carpooling, no clumsy exchange of cash or credit cards, the reputation of drivers is visible, and the ride is fully tracked so your whereabouts are known.
> The rules were not broken because they were unfair - that's a meme - you don't get to pass arbitrary judgement of which laws you do and do not respect (in theory).
This is really problematic for me. If you restrict the scope rightly to only democracies that are truly representative (which many regulatory capture environments are not) I might be able to agree. But many governments in the world are not nearly legitimate enough to deserve this respect.
I have no issue with individuals, businesses, revolutionaries and other for profit or not for profit companies trying to undermine the dictates, decrees, laws or rules or whatever you want to call them of oppressive or authoritarian governments.
Taken to a logical extreme, this justifies for profit companies supporting and entrenching dictatorships, under the excuse of “we were just following the law”.
This is an intensely slippery slope, allowing companies to pick and choose which laws to follow is dangerous - would you be okay with sweatshops existing in the US because it allowed the companies to make more profits? What about outright slavery?
Laws are the social contract that we've all agreed to - I am totally in agreement that a lot of laws were created through corrupt government action, but giving free reign to any private entity to ignore laws they find onerous pretty much removes lawful society.
>Laws are the social contract that we've all agreed to
We have? I may go through the actions of consenting because I fear the repercussions of not doing so, but no part of me consents to giving the average person the right to harm me because of their personal beliefs.
You have, yes. It's one of the oddities and tyrannies of human society but you are beholden to the laws of your locale without ever explicitly agreeing to them - as a dual citizen it was really interesting for me when I went through the process of agreeing to a new set of laws.
The tyranny of this process is that all of the activities you go through on a daily basis are only possible because of this contract and, having grown up within this contract, if you were to leave it it would require you to invest massively in self-sufficiency (the real kind, not "I can grow a garden"), a skill that is not only excluded from general education (both within a scholastic setting and within more traditional knowledge passing routes) nearly everywhere in the world - but is often actively discouraged by societal norms.
This, I think, is a pretty good thing, because all of us being hunter gatherers who fought over bountiful locales would be a lot less interesting than knowing things like agriculture, computers and boats exist.
I hope you can see the issue telling someone they consented when they tell you they have not.
>you are beholden to the laws of your locale without ever explicitly agreeing to them
And yet we are free to break them as long as we are not caught.
>if you were to leave it it would require you to invest massively in self-sufficiency
I doubt so, because I find avoiding society is not an option. I guess if you can build your own rocket and launch yourself into space it is possible, but anywhere else in the world and you are subject to the local laws generally set by whomever has the biggest stick. I'm not exactly sure when it happened, but there was one day, not too long ago on the historical scale, where the ability to really live away from people self sufficient became impossible.
I guess there are some places you might be able to move to, not pay taxes on, and be so remote that they don't bother enforcing the laws on you. But that still depends on the idea of breaking laws as long as you can avoid any punishment you find unbearable.
>This, I think, is a pretty good thing, because all of us being hunter gatherers who fought over bountiful locales would be a lot less interesting than knowing things like agriculture, computers and boats exist.
Society has it's benefits, and yet I do wonder if every law was fully enforced would it continue to function? Think of work to rule, at national scale. Laws seem to be a sort of selectively enforced tax that helps keep society from crumbling, but even that isn't guaranteed since it seems to also give us the ability to crumble society in a way that hunter gatherers could never imagine.
All you are saying is the laws are enforced (to some degree) not that we agreed to them, and the fact that I live within a system of rules doesn't mean I agree with all of those rules. Show me a social contract with my signature on it and I will agree with you. Otherwise, I will happily subvert those rules I disagree with where safely possible. Jaywalkers of the world unite!
>This is really problematic for me. If you restrict the scope rightly to only democracies that are truly representative (which many regulatory capture environments are not) I might be able to agree.
Even then I cannot. The majority can be wrong at times and a bad law, even one with majority support, is a bad law. In such cases the only value to following such a law is to reduce risk of enforcement (and there is plenty enough evidence that following the law is no defense against being harmed by those who enforce the law).
It is my understanding that many places distinguished between hailed services and on call services, but Uber was able to do on call at an unexpected scale?
I am sure you can dig up illegal acts, but the secret sauce was the new dynamic that bent what people thought was possible at scale.
>In the past (pre-Uber), if you made this amount of money by engaging in large-scale, coordinated law breaking, you were called a gangster and got a big old nice RICO charge.
I'm thinking this isn't actually true. In some cases you definitely were. In others, you become the dominant player and enjoyed becoming wealthy.
What exactly divided the former from the latter? I wish I understood that better.
If they had been operating an illegal business model then they would have long ago lost in court. That they've succeeded means that it's fundamentally legal...
They had a thing going for a while in Philly where UberX (the normal-car service, as opposed to the limo-type service) was disallowed by the city, but Uber promised to pay any fines if drivers were caught and tried to prevent cops from using the app.
I'd say that's firmly on the "breaking the law" side of things.
Evading a regulation is almost always a violation of the law (the exception being weird industry group things like voluntary audits that result in certifications).
I think most people consider onerous regulations to construct a barrier against entry aimed at any new market entrants[1] to be a different sort of law breaking than normal law breaking (more... morally and ethically acceptable). IMO Uber has flagrantly ignored a number of regulations regarding driver background checks that have allowed it to become less than safe to ride in, especially for single women, there have been a plethora of stories about women being stalked by uber drivers - even within the water-cooler talk at my office.
So technically they've broken a bunch of laws - and ethically they've acted in bad faith.
1. Please note, I think what regulations would be in this group varies extremely across HN, with the more freebretarian folks placing all regulations here, while others may consider labour regulations or environmental regulations to provide real value - and I really don't want to get into this discussion, I just think we can all mentally place a line _somewhere_
Breaking a regulation is not the same as breaking a law. We have two types of law in the US, civil and criminal law. Civil law is enforced through lawsuits by the aggrieved party using the legal concept of tort, criminal law is prosecuted by the state in a process we're all more familiar with due to media attention.
Regulations are enforced by regulatory bodies that operate under a different legal basis than civil / criminal law. Regulatory bodies are not legislative in nature but rather executive. Being sanctioned by a regulatory body is a very different thing than getting prosecuted.
For one, a regulatory body does not enjoy legitimate use of force, and cannot imprison individuals. They can only sanction according to their mandate. If you refuse to pay a sanction, this may escalate to a prosecutable criminal infraction. But simply breaking regs isn't a crime.
For instance, if you're operating an illegal home-based business, you may be subject to sanction by the zoning authority and the entity that you were supposed to register with. Like the local real estate board if you were providing realtor services without a license.
Only in rare situations is it a criminal offense to provide commercial services without the proper licenses, such as providing legal or medical services. It is not, as you say, the norm.
Even in the case of environmental regulations, rarely are they elevated to the status of crimes under criminal law. More usually you'll get contacted by the appropriate environmental protection administration and fined. I recall hearing about one company who would simply call up the authorities whenever they needed to dump into the river and pay the token fine.
First they evade regulations, then they propose a new policy that is enticing to potential employees (or whatever they call them) - but the policy is so generous that most competitors would have issues keeping up.
How many companies can afford to pay 21$/hr minimum for example?
So somehow it's both a great step forward and terribly anti-competitive at the same time.
I think another question no one is seriously asking is can Uber afford it? They're already hemorrhaging money. I understand they want to eliminate the competition but they might just accelerate the demise of the rideshare industry altogether.
Uber paying their employees $21 is very competitive. Uber lobbying for their competitors to have to pay their employees $21 is anticompetitive. The latter is what is happening here.
Uber paying their employees $21 doesn't make sense, they will get undercut on pricing by race for the bottom competitors. There really isn't anyway to grant a viable minimum wage except via legislation. Paying more to the driver isn't the same thing as paying more for top-tier engineer. It isn't like getting a nascar driver in the seat is going to justify higher wages. So what do you recommend?
>> they will get undercut on pricing by race for the bottom competitors
If Uber unilaterally increased minimum salary, then those competitors would have to do the same, otherwise they would lose all their drivers to Uber. So, if Uber really cared about drivers they would just do it. Instead they are making PR stunt by "demanding" government regulation.
I don't think that is true, they'd have a bunch of drivers sitting around not getting paid to give rides because they are being undercut by the competition. It is not skilled work so its always going to be a race to the bottom, the bottom has to be set by some governmental body. Without some reasonable minimum drivers are being sucked into quicksand.
> It is not skilled work so its always going to be a race to the bottom, the bottom has to be set by some governmental body.
It's not actually a race to the bottom because it's still a competitive market. Even unskilled people have a choice between being Uber drivers or janitors or stock clerks or fast food workers, or anything else that someone will pay them to do. If Uber pays less than Walmart then people can quit Uber and go work for Walmart. That creates a floor for the pay of Uber drivers independent of anything the government does.
And if the government is going to do something, it's much better to raise that floor, which minimum wages can actually do the opposite of because people have non-monetary job preferences. If a $21/hour minimum wage appears then you have to pay Uber drivers $21/hour, but suppose they have $15/hour in expenses (fuel, wear and tear), so that's really only $6/hour. Meanwhile a work from home job might have paid $10/hour -- a real $10/hour -- but now that's well below $21, so is no longer available. So now you're paying $15/hour to make $21 instead of paying $0 to make $10, which means you make less, and Uber gets to pay $21 when they would have otherwise needed to pay $25 to actually be competitive. And the same thing (to various degrees) with ordinary commute-to-work jobs vs. stay at home jobs, or jobs with longer vs. shorter commutes or in higher cost of living parts of the city or that require some training or other expense that ultimately has to be paid for out of wages, or the job is just downright less of a grind and people are willing to accept less money in exchange for easier work. By removing options people used to have, you only make them more desperate for the remaining ones and require them to accept worse options even if they're better on paper.
I don't necessarily disagree. This could be a net good for drivers, I'm just trying to point out the validity of the anticompetitive angle here. Regardless I certainly don't think you could argue that Uber is being more competitive by doing this unless they are willing to take the initiative themselves first.
Yes. That's how a disruptive companies operate in outdated regulatory environments, and that can be a win for all. Call it corporate civil disobedience?
Case and point: Uber was basically a (hugely popular) mediator for illegal cabs in my country. They had to shut down, but as a response the government introduced new vastly relaxed regulations to the whole taxi industry, setting the rules under which services like Uber could operate. I am not yet sure if it will actually result in lower rates, but at least they catalyzed a historical change.
>Call it corporate civil disobedience
No thanks, I'll call it corporate law breaking.
It's offensive that anyone would equate a corporation breaking the laws of society for MONEY with the emancipation of oppressed human beings.
