I don't think being a startup should grant you immunity from the law or absolve the requirement to follow local regulations and licensing statutes. Lawyers, doctors, electricians they all have to follow the law too.
(i) The cities in which Uber operates usually have dysfunctional cab systems. San Francisco, for instance, is notoriously underserved.
(ii) Much of the regulatory overhead in running a cab/livery service really is an artifact of top-down market controls from the turn of the last century that have been exploited to lock the market to a privileged few operators.
Imagine for a moment you got into a taxi and instead of the meter, he had an hour-glass with tick marks on the side and a bike odometer. Would you feel secure about what you're being charged?
Most of the Uber drivers use iPhones, which (especially the older models) have notoriously bad GPS. If it skips off to the wrong street for a few blocks and adds 1/4 mile to my trip, and I don't notice by staring at his screen, how would I know? Normally, I trust the cab company because that little meter is tracked, registered, and supposedly regularly audited.
Phone-based GPS, really?! They probably should be taken to task by weights and measures.
But why is Uber even metering the trip distance? If they incorporated the destination address to the booking, they could calculate an exact price based on time of day/projected congestion/etc. Then they'd have even better consumer protection than a taxi cab (where the driver still has an incentive to go a more expensive route).
They know your start location because you call them there. They use GPS to determine your end location, to save time.
Uber doesn't really even publish a rate schedule for how much you pay, and it doesn't have stable prices. They go up during periods of high demand, for example. So it's unclear why you'd object to the GPS, except to mess with them; you don't know what you're going to pay in any case.
So make the destination address optional while booking, and if given you'll get an exact price ahead of time. This doesn't exactly conflict with demand pricing either - Uber just has to be a bit smarter ahead of time.
The fundamental problem is "you don't know what you're going to pay", and I'm not surprised they're being called out for that under consumer protection laws. The point of taxi regulation is to prevent people from being cheated on the spot. Uber is in a position to do even better than what regulations are capable of, with market pricing, and they should aim for that.
They meter the trip distance because the faster route may be a lot longer. Charging based on "crow flies" distance would align driver and rider interests, but for those "can't get there from here" destinations, the drivers would be underpaid and perhaps more reluctant to accept the fare.
Peruvian taxis don't run on meters, so you need to arrange a price with the driver before accepting the ride. Taxi drivers usually try to overcharge, especially when confronted by a foreign tourist. If you have no idea how much the fare should be, try reducing the driver's price by a small amount (if the driver says 12 nuevos soles, offer 10). It's always a good idea to ask someone beforehand, such as a hotel receptionist, how much a taxi to your destination should cost."
Laws don't change for the hell of it, certainly not because someone looks over the books and says "well thats silly". To get a law changed requires drawing mass attention to its silliness. Often times the best impetus is to get the public pissed off, taking away a service the public loves is a great way to piss them off.
Its a chicken and egg problem. There has to be igniting situation to get change to happen and a company can not operate 100% legally without the change occuring. As a result its sometimes in the company's best interest to ignite the fire themselves and eat any blow back.
I never said the law shouldn't be changed, it should. But just because a company is "first to market, cutting edge", does that make it exempt from regulation?
Given the New Years Eve pricing debacle, I'm glad regulation is being put in place. Taxi's are underserved and a horrible experience, but their pricing is both consistent and 100% transparent during and after the ride. Uber's pricing is a confusing mess. Time, demand, distance, and vehicle are all factors and you're only aware of the price after the ride.
Uber is not exempt, but they have the right to fight the laws with whatever legal means they can afford.
For any well developed market, radical innovations in productivity can almost assuredly be illegal. Standards of service must be set on a national level, not a mico one.
Imagine if every time you went to a different city, Uber's user experience changed drastically. You never knew what Uber would cost. Perhaps sometimes you had to do things that completely broke Uber's experience. Imagine if Boston's Uber app was just a button that said "call dispatcher" and then you had to pay cash at the end of the trip. Why bother?
Uber is not challenging the right of a municipality to issue rules or regulations. What they are challenging is an antiquated system of bureaucracy, for a specific market, which wastes both a city's budget and customer's time.
I think we will see the Uber strategy applied to a very wide rank of micro-regulated markets. And its going to work. The cities that "win" will lose, big time.
(iii) It's unclear Uber is actually in violation of the law. Boston may have sent a C&D, but this hasn't been tried in court yet and I would not be surprised if Uber was to win.
Ironic example given that every medicinal marijuana dispensary in the country is operating in spite of Federal law. They only get away with it because the US government has decided to, at least for now, turn a blind eye.
That's a little simplistic. They're also taking advantage of local and state laws that explicitly allow them to operate. There's no such arbitrage to be had in cab laws.
You were able to use marijuana as an example because legalization of it is considered a reasonable opinion. This is only possible due to its existing prevalence, which is only due to the brave/stupid people risking their lives to distribute it in spite of the fiat against it. Reality drives the model, not vice-versa.
The original Ubercab model (allow anybody to sign up as a driver without any vetting of anything) was absolutely atrocious. The new one is better, but uber drivers benefit from customers who feel like the product is as safe as the regulated product without actually doing things like ensuring that the cars are inspected.
That said, I pretty much lost respect for Uber when they pretended that expressing high-demand rates as a multiple was clear. Nobody with any UX experience would've agreed with them that it was clear... but they all would've agreed that it's a great way to camoflague massively inflated rates.
Zimride arranges carpools for long trips, but Lyft is pretty much just an Uber clone with private individuals operating their personal cars. There is some vetting but no insurance or anything as far as I know.
Why is Uber a special case?