Narrative: Uber Flouts Regulation
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Narrative: Uber Flouts Regulation (Jan 28, 2017)
Written: January 28, 2017
It appears to have been a major plank of Uber’s strategy from the beginning to ask for forgiveness rather than permission to operate in various cities around the world. Where there have been official bans or opposition to Uber and services like it, the company has often entered a market anyway, built up a critical mass of drivers and passengers and then used those stakeholders to put pressure on local lawmakers and others to give it official permission to operate.
This strategy has mostly worked out for Uber – it’s been able to argue that it provides significant benefits in terms of job creation, safer rides, lower costs, increased taxi capacity, and more for the citizenry. And both drivers and users have backed up these claims, putting pressure on municipalities and those who run them on the basis that they’re holding back progress.
This strategy hasn’t been without its speed bumps – Uber doesn’t always get what it wants (as in the case of Austin, which required fingerprinting drivers and eventually drove out both Uber and Lyft), and in some cases Uber has made exaggerated claims about how good it is for the local economy and been caught out.
Though there are relatively low risks to the strategy when it comes to ride sharing alone, the stakes rise considerably higher when it comes to autonomous driving, as Uber recently discovered in San Francisco. There, Uber attempted to launch a trial of self-driving cars without official permission from the California DMV, perhaps hoping that its general approach to regulation would win out here too. But its trial was quickly shut down, and Uber left San Francisco for Arizona. The fact that one of Uber’s autonomous vehicles ran a red light on the first day of the trial (though allegedly with a human driver) is an apt symbol of the greater risks of flouting such regulations relative to those governing taxi use. Most of its extra-legal activities have risked fines, but rogue autonomous cars risk passenger, driver, and pedestrian safety.
Uber appears to have reined in the worst excesses of its anti-regulation stance in recent years, becoming more accommodating of local rules and finding alternative ways into markets where necessary, now that its business is mature enough and it no longer needs to expand quite as aggressively. But its reputation for flouting regulation is well deserved and will likely stick around for some time to come even if Uber takes its foot off the gas a bit.
★ Uber Loses License to Operate in London Over Bad Behavior (Sep 22, 2017)
Transport for London, the entity that oversees public transportation and taxi services in the UK capital, has refused to renew Uber’s license to operate a private ride for hire service in the city, citing several examples of bad behavior. It’s perhaps the most tangible sign yet that Uber’s toxic culture, disregard for regulation, and general willingness to do what it takes to win in the market have come home to roost. The timing is unfortunate given the ouster of Travis Kalanick and the recent appointment of Dara Khosrowshahi as CEO, but clearly stems from behavior that took place long before those recent changes. Uber has said it plans to appeal and Khosrowshahi has said both in communications to employees and in public on Twitter that the decision is in part Uber’s own fault, which is heartening. It’s important to note that this decision isn’t about ride sharing services in general but specifically about Uber’s bad acts, so Uber needs to address those specific concerns even as it makes its usual arguments about the benefits to society a service like Uber provides. This is an unusual situation for Uber to be in – being banned in a city where it’s well established and generally well regarded, without a broader ban on ride sharing services. If I were Dara Khosrowshahi, I’d be on the next plane to London to talk to TfL, understand exactly what the issues are, fix what still needs fixing, and promise to do much better in future. Losing its presence in a city like London could be enormously damaging to its business in the UK and Europe more broadly because so many people travel through London.
This isn’t a particularly new idea, and in fact it’s one that ride sharing companies have used for some time now in trying to convince regulators to allow them to operate. But it’s always good to see real data behind an idea, and in this case it seems to back it up pretty well, at least in New York City. The data isn’t consistent across the boroughs, but there’s certainly a clear trend suggesting the introduction of Uber in the City did indeed reduce drink driving, which is obviously a good thing. That’s a nice counterpoint to all the negative news stories recently about Uber in particular and ride sharing in general (including the one I just shared about driver vetting).
via The Economist
I think there may have been one day in the past week when there wasn’t some new negative story about Uber, and that’s just based on what I’ve written about here. The latest is reporting from the New York Times that Uber has a program called Greyball which identifies app users who may not be who they seem and serves up fake cars or otherwise obfuscates the real activity going on with drivers in the area. Although there are some legitimate reasons for Uber to do something like this – for a time, competitors were frequently ordering and canceling cars – it was deliberately used to evade law enforcement in places where Uber was breaking local laws. Its statement in the article suggests it sees nothing wrong with this behavior, but characterizes this last scenario as “opponents who collude with officials on secret ‘stings’ meant to entrap drivers”. One might, I suppose, make a similar argument about police running speed traps, but radar detectors are illegal in some places anyway. The legality of what Uber did here isn’t 100% clear, but it’s yet another example of Uber’s disregard for regulations and willingness to do almost anything to flout or circumvent them. On the other hand, it appears Uber’s PR department has lost the will to fight on yet another front and isn’t even disputing this story.
via New York Times
Well, well: a rare case of Uber caving to regulators and doing as they ask. It had seemed as though Uber had given up on San Francisco and California in general when it moved its self-driving Volvos to Arizona late last year, but it now appears that it is actually going to go through the steps necessary to gain DMV approval for testing self-driving cars in California after all. This all feels like a totally unnecessary rigamarole for all concerned – Uber has likely gained nothing and lost quite a bit of trust as a result of all this, and now it’s back where it started.
During the very brief period when Uber’s self-driving cars were operating in San Francisco, one of them ran a red light. However, the company at the time engaged in some audacious spin and claimed the car was being driven by a human at the time and that the incident just highlighted the benefits of autonomy. Now, however, the Times is reporting that the car was supposed to be driving itself at that time and the human driver merely failed to intervene in a timely fashion. If validation were needed that the California DMV made the right decision when it stopped Uber from testing its cars without a license, here it is. But this is also yet another case of Uber acting like the rules that apply to everyone else don’t apply to it, and outright lying when it gets caught. And that in turn makes it very hard to believe it when it claims it’s in compliance with rules, and it only has itself to blame. What a terrible few weeks for Uber, pretty much all of its own making.
A good reminder that even when an announcement is made, it often takes weeks if not months for it to actually take effect – Uber announced its move from San Francisco to the Phoenix area in December, but only now is it launching self-driving rides for paying customers in Tempe, a Phoenix suburb. In addition, we still have the disingenuous claims from the governor of Arizona that California was somehow not “open to business” for self-driving cars, despite being the home of the biggest trials in the country. The reality is that Uber wouldn’t comply with applicable regulation and made the decision to leave the San Francisco area rather than comply as others have done. For now, that must feel like good news for Uber – it gets to test its cars without the scrutiny or reporting requirements which would have been imposed in San Francisco. But whether this ends up being a good thing for the drivers and pedestrians of Arizona remains to be seen.
Consumer Watchdog asks California to take Uber’s self-driving trucks off the road – Recode (Feb 9, 2017)
This is what you get when you build a reputation for flouting regulation: people don’t believe you when you claim you’re operating within the bounds of the law. Uber ignored the regulations around its self-driving cars in San Francisco until its DMV registrations were revoked, and now Consumer Watchdog says Uber subsidiary Otto can’t be trusted either when it comes to its self-driving trucks. As I’ve said repeatedly, Uber’s flouting of taxi regulations was a very different animal from its disregard for regulations concerning autonomous vehicles – in the former case, it had consumers on its side and could make a strong argument for increased safety, but that’s certainly not the case when it comes to autonomous vehicles. And yet both its past anti-regulation stances and the San Francisco case will come back to bite it, as they are here. This is when unchecked narratives – especially ones grounded in reality – really become dangerous.