Is it all over for Uber?!
Automologist, MAC, reports on the latest development in the growing Uber controversy.
Only a few weeks ago, the Smart Phone Taxi service was valued at US$40 billion but it now looks like the game is all but finished for the taxi service that pretends to be a ride-sharing scheme as authorities from California to Thailand are gunning for them.
A perfect storm of actions seems to be creeping up on the San Francisco-based company after the authorities in the Indian capital of Delhi banned the service after an allegation of rape committed by a driver on a customer (they don’t call them passengers). This wasn’t the first action against the tech upstart from the USA though; from as far afield as Uber’s home state of California to New York and Toronto and London and Hamburg and Bangkok and Manila, licensed taxi drivers the world over demonstrated against the introduction of the service and licensing authorities have wrestled with the concept of calling a fee paid ride anything but a taxi service.
The latest city to take action is Portland, Oregon in the Northwest of the USA. This city has been a stubborn stronghold of resistance to the service even after surrounding cities allowed it, which meant Uber’s customers could get rides into the city but had to use conventional licensed cabs for the return journey.
Uber X was launched last week and immediately the city code enforcers launched a sting operation in which they called drivers on the app and then slapped them with a heavy fine when they showed up. Of course, Portland is not the only city to have tried this; Las Vegas successfully forced Uber to suspend service. However, it is the only city in the US thus far to issue a cease and desist and then followed up with a lawsuit to sue Uber for a breach of the city’s taxi rules.
Los Angeles and San Francisco are next in line on the suing of Uber. They have just filed a consumer protection lawsuit against the company alleging that the popular ride-hailing company misleads consumers about the service’s safety, overcharges them and flouts the law.
The District Attorney for San Francisco, George Gascon, said, “Uber says it uses an ‘industry-leading background check process,’ but does not fingerprint its drivers. The company’s criminal checks are thus completely worthless. The company repeats this misleading statement, giving consumers a false sense of security when deciding whether to get into a stranger’s car.”
Gascon claims that his intention is not to shut the company down and the company can still operate while the suit is being heard. However, the financial penalties could be as high as US$2500 per violation and in this case, a violation is when someone books a ride and thus there could be tens of thousands of these.
So, why is there so much opposition to the ride-sharing service that Uber offers? After all, the good folks over at Uber are trying to convince us that the introduction of the service should be viewed as a safe and convenient alternative to other forms of surface transportation and in as much should be included in any city’s plans for urban infrastructure.
For sure when I get into a ‘stranger’s’ car for a ride, I’d want to know that the vehicle is road-worthy, insured and manned by a competent driver, and this is what the regulations in every city are designed to guarantee. I have, of course, had too many trips in obviously unsafe cars driven by idiots who then try to rip me off by going the long route or having a bogus meter.
There are two issues at stake here that perhaps all of us should consider: firstly, Uber cars are NOT regulated by any local authority and their drivers are not vetted either. Thus, perhaps getting into one is much more of a lottery.
The second consideration really is much more financial. Nearly all local municipalities derive an income from the licensing of taxi’s in some way, shape or form. Allowing Uber will deprive them of this income. Further to this, Uber keeps 20% of every fare as their ‘cut’ for providing the service. This money is, in effect, laundered outside of the country and avoids local taxation, again depriving the local authority from revenue generated within their authority.
So, is this the end for Uber? Well, I for one doubt it, but there are going to be what will seem like a never-ending stream of lawsuits coming their way.