Uber to pay $20 million settlement for making false promises to drivers

by Sean Riley


Score one for the drivers.

Uber has agreed to pay $20 million in a settlement in a lawsuit over claims the company misled drivers regarding how much they would earn and the terms of their car financing program.

The Federal Trade Commission (FTC) filed suit against the ride-hailing company for promising prospective drivers on its website about 30 percent more annual pay than they received. The agency claimed Uber advertised an average median salary for UberX drivers to be more than $90,000 in New York and $74,000 in San Francisco, when the actual median income was $61,000 and $53,000 respectively. Additionally, the FTC said fewer than 10 percent of drivers in those cities earned Uber’s advertised salaries.

Uber’s controversial car financing program was also included in the government’s complaint. The FTC found that Uber drivers who used the Vehicle Solutions Program were paying up to 60 percent more in weekly car lease payments compared to what Uber advertised. The company severed its relationship with the program’s lender, Banco Santander, which has been accused of predatory loan practices.

Uber didn’t admit or deny culpability to the claims, and waived rights to challenge the settlement, according to court filings. As a condition of the settlement, Uber has to submit a compliance report next year detailing its advertising, marketing, and sales activities with explanation of how it complied with the order.

A company spokesperson told the Verge, “We’ve made many improvements to the driver experience over the last year and will continue to focus on ensuring that Uber is the best option for anyone looking to earn money on their own schedule.”

The $20 million settlement is the latest legal challenge in Uber’s ongoing fight with its drivers. The ride-hailing company, along with its competitor Lyft, have been tangling with driver complaints that their employment status is misclassified as contractors rather than employees. In September, Uber tried to settle a class-action suit for those complaints but a judge rejected the company’s $100 million offer as insufficient.

Additionally, Uber drivers worldwide continue to protest its fare cuts, claiming that it eats into their earnings and makes it hard for full-time drivers to earn a living.

Uber has had to settle similar suits over its wording in advertisements to consumers. A judge rejected Uber’s $28.5 million settlements in September for two class-action suits over the company charging a fee for “safe rides,” which covered background checks, and mischaracterizing the company’s safety practices. Uber was also ordered to repay $47,000 customers a total of $374,000 for charging a 20 percent gratuity that was supposed to be included in the fare.

If its legal troubles aren’t enough, the company has also lost more than $2 billion in 2016, marked by slowed growth.

2016 DFHV Annual Report on Accessible Vehicle-For-Hire Service

by Sean Riley


Executive Summary

Under the DC Taxicab Service Improvement Amendment Act of 2012 (DC Taxi Act) the Accessibility Advisory Committee (the Committee) is tasked with transmitting to the Mayor, and to the Council, an annual report on the accessibility of taxicab service in the District and how it can be further improved. The Committee, responding to changes in the market and industry, is addressing accessibility issues for both taxi and transportation network companies referred to in this report as public and private vehicles-for-hire (VFH) respectively. This report serves as the Committee’s 2016 submission and builds on the recommendations and background provided in the comprehensive reports submitted October 15, 2015, September 30, 2014 and February 20, 2014.

A. The Need for Accessible Vehicle-for-Hire Service in the District

The number of public wheelchair accessible vehicles (WAVs) in the past year has increased from 141 to a little over 221 (roughly 2.7% of the District’s public VFH fleet). This is a significant increase, but there is still work to be done. Adults with disabilities are more than twice as likely to have inadequate transportation - leading to fewer opportunities for employment and increased poverty. In the District, only 30% of people with disabilities are working, 41% live in poverty, compared to 76% and 14% of those without disabilities. Provision of accessible on-demand transportation also bolsters the District’s compliance with the American’s with Disabilities Act (ADA) integration mandate laid out in the Supreme Court’s Olmstead v L.C. decision that allows people with disabilities to live in the community.

According to a DFHV survey of District residents roughly 30% of all public and private VFH trips not made were found to have been linked to the lack of accessible vehicles. Based on the survey responses, the DFHV recommended a total of 218 WAV public VFH and 1,428 private VFH. There are currently an unknown number of Uber WAVs, and no Lyft WAVs.

This summer the DFHV announced a series of drastic policy changes to the Transport DC program to address inadequate funding for increased demand. During the campaign to roll back the changes users talked often about using Transport DC to get to the grocery store, spend time with friends, go to restaurants and movies, see grandchildren, and travel to urgent care centers, dialysis appointments or hospitals in the evenings. Through actions and words Transport DC users made clear - accessible on-demand transportation had changed their lives for the better.

Finally, during the implementation of the SafeTrack program to improve the rail system, the Washington Metropolitan Area Transit Authority (WMATA) urged passengers to consider using alternative travel options. Unfortunately, many people with disabilities cannot use the District’s inaccessible bikeshare program, have limited access to the private VFH in the region, and do not own a vehicle. WMATA continues to debate late night service cuts that could affect disabled riders who work late hours, or who simply need to travel in the evenings. On-demand accessible public and private VFH are needed to ensure access to transportation and opportunities for all District residents.

B. The Legal Requirements for Providing Accessible Vehicle-for-Hire Service

The rights of District tourists, travelers, workers and residents with disabilities to access public and private VFH services are guaranteed under the ADA and corresponding regulations, the DC Taxi Act, the Vehicle-for-Hire 

Innovation Amendment Act of 2014, and the DC Human Rights Act (DCHRA). Laws and regulations include prohibitions against discrimination when providing service, training requirements, and, for public VFH companies, requirements to ensure a percentage of their fleet is wheelchair accessible (WA). The US Department of Justice (DOJ) filed a Statement of Interest in 2015, affirming that private VFH companies are providing transportation services, therefore fall under Title III, and must comply with the ADA. Although Uber settled in a case brought by the National Federation of the Blind to ensure provision of service for blind passengers and their service animals, discrimination continues. A lawsuit has been brought against Uber in Chicago seeking provision of equal service to wheelchair users.

C. Measuring Up: Other Jurisdictions’ Provision of Accessible Vehicle-for-Hire Service

Based on data collected in 2015 there are efforts being made across the country by local advocates, city agencies and regional transportation agencies to increase the number of WA VFH. A few jurisdictions that are working on improving their accessible taxi service include: Alexandria, VA; Baltimore, MD; Chicago, IL; Houston, TX; Montgomery County, MD; New York, NY; Prince George’s County, MD; Philadelphia, PA and San Francisco, CA. These jurisdictions are utilizing a combination of federal funds, tax credits, incentives, and governmental requirements to support and increase the number of accessible public VFH.

D. Private Vehicle-for-Hire Accessibility Update: Nationwide

Uber and Lyft have reported an increased interest from public officials in utilizing their services for subsidized public transit options, including: creating first/last mile programs that aim to provide transportation options to and from public transit sites, replacing low ridership bus routes with subsidized private VFH service, subsidized paratransit alternatives, and emergency response alternatives.

In October, the Federal Transit Administration (FTA) announced $8 million in funding through its Mobility on

Demand (MOD) Sandbox Program initiative for public transportation projects. The initial Notice of Funding

Opportunity (NOFO) outlined four guiding principles for transit agencies and other applicants, including an

expectation of service for people with disabilities through equity of service delivery. It is the hope of the

Committee that the MOD Sandbox guiding principles will set a precedent for future funding opportunities at a

local and federal level, and create an expectation for companies like Uber and Lyft to offer accessible service.

Case studies of Chicago, IL; Altamonte Springs, Fl; Boston, MA; and Washington, DC’s transit agency reflect a

need for equity moving forward.

After years of work the City of Chicago amended the Ordinance that governs the public VFH industry to increase accessibility. The Ordinance also established an accessibility fund to help defray the costs of modifications to vehicles. However, the entry of private VFH into Chicago is causing the public VFH fleet to shrink. Even so, in 2015, that shrinking industry filled 41,290 requests for rides in WAVs. Uber provided 14 WAV trips through August of 2015.

Altamonte Springs, FL offers a 20% discount on Uber rides that begin and end within city limits, as well as a 25% discount on rides that lead to their public transportation stations. The subsidized program relies on the expectation of a smartphone and credit card, and has no regulations for accessibility. Many transit riders are being left behind.

The Massachusetts Bay Transit Authority (MBTA) has partnered with Uber and Lyft to offer Boston residents with disabilities an alternative to their paratransit program known as the Ride. Customers with strict and/or fixed incomes will not know the true fee of their ride until the ride is requested. This could suppress trips and create problems for the return trip. Both Uber and Lyft are required to provide WAVs when requested. While Lyft is offering dial-in service as an alternative for riders without smartphones, Uber is distributing smart phones to customers in need. Little is known about the conditions the customer assumes when accepting a smartphone from Uber.

WMATA issued an open solicitation that closes December 9, 2016 for Abilities Ride, a subsidized on-demand alternative to paratransit with private VFH or other service providers. The program requirements are similar to the MBTA program, though there are no requirements for vendors to ensure those without smartphones will have access. While WAV provision is required, there are currently no requirements for equivalent service provision that would ensure equal wait times and costs, and limited comprehensive training requirements. If the Abilities Ride program extends to the District, residents with disabilities should expect robust anti- discrimination and training requirements, as well as changes to private VFH services that extend beyond the parameters of the partnership.

E. DC Accessible Vehicle-for-Hire Update

Currently, DC public VFH companies own 221 WAVs out of the approximately 8,234 licensed public VFH. It is unknown how many wheelchair accessible VFHs are running on a regular basis. The Committee acknowledges that DFHV, WMATA, DC Office of Human Rights (OHR), and the Office of Disability Rights (ODR) have been diligently participating in or creating programs to address the need for greater availability of accessible transportation services for all users in the District.

Activities include:

  •   Continuation of the DFHV/WMATA Transport DC Program and Engagement with Riders

  •   Continuation of the DFHV/OHR Anti-Discrimination Initiative

    The Committee encourages:

  •   Continuation of the DCTC Anonymous Riders Program

  •   Continued enforcement of DC Taxicab Service Improvement Amendment Act of 2012 Requirements

  •   Enforcement of The Vehicle-for-Hire Innovation Amendment Act of 2014

    F. Committee Recommendations toward Improving Vehicle-for-Hire Service

    The Committee recommends working within an open entry or equitable system for both private and public VFH, with the long-term goal of obtaining a 100% universally accessible fleet that meets all residents’ needs. The Committee also recommends:

    Regulatory System Changes

  •   Require all private and public VHF operators to provide meaningful WAV service in the District.

  •   Retain the Transport DC program as a service to District residents. Provide trips to any destination within the District 24/7. Work with Transport DC Users and this committee to ensure sustainability of the program and address any funding or program challenges.

  •   Ensure the innovative DFHV Neighborhood Shuttle service is available to all District residents, including those who require a wheelchair accessible vehicle, at the same rates and with equivalent wait times.

  •   Enforce the requirement that 12% of public VFH fleets are comprised of WAVs by December 31, 2016.

  •   Provide a best practice WAV service manual or training for company owners to highlight lessons

    learned and ensure WAVs are in use, and VFH companies are providing best possible service.

  •   Collect data from public and private VFH companies to ensure equitable, integrated WAV service is being provided to District residents, workers, and visitors. Review data annually and institute policy changes if needed.

  •   Ensure riders are aware of the complaint procedures if service is denied. Include refusal to haul data in any reports compiled to review demand and adequate provision of accessible service.

  •   Require all public and private VFH digital dispatch applications with capabilities allowing passengers to request WAVs on the same platform, and in the same manner as all other passengers.

  •   Require equal access to passenger services within the vehicle, including videos and payment systems.

  • Require digital dispatch companies, public and private VHF companies and owners that do not currently provide accessible service to pay into a District Accessible Service Fund.

  •   Require District government response to the DFHV AAC Annual Report Recommendations, similar to response required from the DDOT Director to the Pedestrian, Bicycle and now Multi-Modal Advisory Councils. Require reporting of recommendations and the DFHV response to the Council during the annual agency performance review.

  •   Mandate a centralized dispatch program for all drivers of WAVs. Subsidize drivers’ cost of any accessible vehicle dispatch program through the Accessible Service Fund.

  •   Note: In the 2015 Committee annual report Yellow Cab proposed long-term city subsidies, less restrictive vehicle acquisition policies, expanded age limits, granting of WA tags to drivers who have never owned one through a lottery, and mandated centralized dispatch as the solution for a sustainable accessible vehicle program.

    Regulatory Incentives & Funding

  •   Allow accessible public VFH to go to a separate line at Union Station and area airports if a centralized dispatch program is mandated.

  •   Establish and fund a tax credit for accessible VFH owners.

  •   Waive license fees for accessible VFH owners providing service to wheelchair users. Continue to waive

    training fees.

  •   Give a monthly award to a taxi driver of a WAV who provides outstanding service.

  •   Use District Accessible Service Funds to continue vehicle acquisition, training, and rental assistance grants.

  •   Continue to utilize financing options identified in the February 2014 Comprehensive Report (eg, public- private partnerships, a public VFH company or dispatch-provider fee, federal matches) to purchase accessible VFH to lease or sell.

  •   Explore the USDOT Rides to Wellness program, job access grant opportunities, and public-private partnerships with health insurance, healthcare providers, and local and national business community members to support and fund accessible VFH rides to healthcare appointments, recreation, and employment.

    The Committee recommends that procedures and systems, along with responsible personnel, continue to enforce, monitor, support, and report on accessible VFH service, and efforts to alleviate discrimination in the District. The Committee also recommends training of all public and private VFH drivers as is required by law, and the implementation of a public awareness campaign to highlight the District’s WAV offerings to the general public.


    The Committee acknowledges the willingness of the DC Council and hard work of the DFHV staff to implement a handful of our previous recommendations. We urge the Council, Mayor, and DFHV to continue to make improvements and prioritize accessible transportation. We urge you to consider the recommendations made in this report and to ensure private VFH are expected to provide accessible service in the District. The District can and should lead the nation – ensuring that access to all transportation services is available to each and every District worker, visitor, and resident.


More than 8,000 Uber & Lyft drivers fail Massachusetts background check

by Sean Riley


More than 8,000 current and recent Uber and Lyft drivers in Massachusetts have been banned from driving in the state under new, stricter background check regulations.

In November, the ride-sharing companies agreed to let the state run its own background checks as part of a deal that would let Lyft and Uber drivers service Logan Airport.

More than 70,000 drivers applied for the checks. The results of the state's first screening were announced on Wednesday, and more than 10% of applicants did not pass.

The most common reason for rejecting drivers was a previous suspended license. More than 1,500 drivers were rejected for a violent crime charge. Other reasons for denial included various driving offenses, felony convictions, and sex, abuse and exploitation. The state also identified 51 sex offenders.

Not all the rejections were for legal reasons. Many drivers had not held a license long enough to qualify under the new rules. Others had an inactive license.

In a statement, governor Charlie Baker said Massachusetts has "set a national standard for driver safety."

Uber and Lyft typically rely on their own background checks, looking for disqualifying offenses in the past seven years. Massachusetts checks are different in a few key ways, according to Massachusetts criminal defense attorney Johanna Griffiths.

They look at a drivers' entire lifetime instead of just the past seven years. They also include people who had a "continuance without a finding" on their record. Also called a CWOF, it's a type of plea deal that lets defendants avoid a guilty conviction.

One of Griffith's clients is a pediatric nurse at a Boston hospital who drives for ride-hailing companies on the side. He did not pass the state background check because of a 25-year-old CWOF for assault and battery he received after a fight with a family member.

Lyft says the seven-year cap is why it did not find the same drivers in its own checks.

"Under Massachusetts law, Lyft's commercial background check provider, like all consumer reporting agencies, is legally prevented from looking back further than seven years into driver applicants' histories. The state does not face the same limitation, which likely explains why a small percentage of our drivers failed the state's background check while passing ours," said Lyft in a statement.

Even though it previously agreed to the background checks, Uber is not happy with the results.

"The new screening includes an unfair and unjust indefinite lookback period that has caused thousands of people in Massachusetts to lose access to economic opportunities," said Uber in a statement. "We have a chance to repair the current system in the rules process so that people who deserve to work are not denied the opportunity."

Massachusetts passed legislation last summer that included a number of new rules for companies like Uber, such as inspection and insurance requirements. Ride-hailing companies have until 2018 to comply with the law, so there may still time to change the rules. Public hearings are scheduled for May.

Turns out, Uber is clogging the streets

by Sean Riley

NY Daily News

As Uber and Lyft burst onto our streets and smartphones, they promised benefits to all. Passengers would get a quick, convenient alternative to the hide-bound taxi industry. Shared rides would replace solo drivers. Uber promised to take “1 million cars off the road in New York City.”

Today in New York, we finally have the data to see how these promises are working out. It’s not a pretty picture. On-demand companies are fueling a cycle of increasing congestion and declining transit use, and it demands immediate attention by Mayor de Blasio and Gov. Cuomo.

Initially, on-demand companies grew mostly by attracting yellow cab passengers. A January 2016 report from Mayor de Blasio, which I helped prepare, concluded that growing Uber and trips were not the primary cause of worsening congestion.

But growth didn’t stop with the mayor’s study. Since June 2015, on-demand companies’ passenger volumes have tripled, to 500,000 per day. That has far outpaced the drop in yellow cab rides. And most trips are still exclusive rides, not the long-envisioned shared trips with passengers traveling on overlapping routes.

I’ve analyzed Taxi & Limousine Commission trip and vehicle odometer records to see how this translates to the streets of New York. The results: On-demand ride companies drove 600 million miles on New York City streets in 2016 — more than the same year’s total yellow cab mileage in Manhatta n. Most of the added driving is in Manhattan and congested parts of Brooklyn and Queens near the East River, piling more cars onto already crowded streets.

On-demand trips that aggravate already-slow traffic speeds undercut the essential role of mass transit in absorbing growth in residents, workers and visitors. In 2016, subway ridership fell for the first time in years. Bus ridership dropped for the third consecutive year. Uber, Lyft and the other companies are making up the difference. They — together with bikes — are now serving the new travel demands generated by our growing city.

That’s not a sustainable way to grow the city.

But we shouldn’t blame the companies or their customers for adding to traffic woes. Riders are voting with their feet for what they value most: prompt, responsive, reliable and comfortable transportation.

Mayor de Blasio has recognized the need for the city to act, promising an anti-congestion plan in his State of the City speech. His plan will need to more efficiently use scarce street space by tackling transit delays, slow speeds, and crowding so that buses and subways are a viable choice when up against deep-pocketed, nimble and aggressively customer-focused private sector companies.

He should aim to speed up bus service by rapidly expanding the number of bus lanes and vigorously enforcing bus lane and double-parking rules. And time traffic signals on avenues with high-ridership bus service so that buses get from stop to stop without wasting time at red lights.

Cuomo must act, too. He should direct the Metropolitan Transportation Authority to expand off-the-bus fare collection, enabling people to board through all doors on high-ridership routes where long delays for getting on and off buses are an everyday, every-stop fact of life.

He should also insist that the MTA implement all-door boarding on all high-ridership routes when the MetroCard fare payment system is replaced in a few years.

Dozens of Uber employees describe sexist, hostile work culture

Finally, the MTA and state Legislature should revamp contracting procedures so that system-wide improvements like new subway signal systems can be built more quickly and cheaply. New signals can make possible higher frequency and more reliable subway service.

These initiatives are far more critical than splashy but low-ridership distractions like the LaGuardia AirTrain and BQX streetcar. Without system-wide improvements, the on-demand companies will keep attracting transit riders at an ever-increasing pace.

That will mean slower travel for everyone, from motorists to bus passengers to truck drivers, and higher costs for goods and services. It’s not the future we were promised. Nor is it one we can live with. Fortunately, it’s one that city and state officials can avoid, but only by acting now.

Schaller is the former deputy commissioner of traffic and planning at the New York City Department of Transportation and author of “Unsustainable? The Growth of App-Based Ride Services and Traffic, Travel and the Future of New York City.”

Uber Claims It May Pull Out Of Maryland Over Driver Background Checks Policy

by Sean Riley

WAMU and Baltimore Sun

Uber is threatening to pull out of Maryland if state regulators require it to revamp its driver screening system, forcing it to use FBI fingerprint background checks that the ride-hailing company has opposed in most markets across the country, an Uber spokesman said Wednesday.

Maryland’s Public Service Commission (PSC) is scheduled to begin three days of hearings Thursday that will determine if ride-hailing companies such as Uber and Lyft will have to use fingerprinting in criminal background checks on drivers. A decision is expected by Dec. 15. Maryland lawmakers created a legal framework for ride-hailing companies last year, allowing regulators to revisit the background check issue by the end of 2016.

In a 50-page petition, Uber, which says it has provided 10 million rides in Maryland over the past two years, argues its background check process is more “comprehensive and accurate” than the fingerprint background check the PSC is allowed to “impose.”

Uber says it “identifies and reviews courthouse records — the best source for determining whether an individual has been convicted of a crime — to screen” drivers, “aiming to keep riders safe while preserving opportunities for good would-be drivers.”

But there have been a number of disturbing cases involving drivers who slipped through Uber’s system. In May, Uber driver Jonathan Hemming of Gaithersburg was arrested after allegedly trying to gun down Montgomery County police officers. He had an extensive criminal record.

And a website funded by the taxi industry, WhosDrivingYou.org, maintains a running list of incidents.

Despite those cases, Uber in its petition contends the fingerprinting system is flawed because it “is built around reviewing rap sheets” which “do not capture the many arrests that are initiated without a fingerprint.”

In a statement, Lyft said fingerprinting checks are outdated and limited, and disproportionately disadvantage potential drivers from minority communities.

"In contrast, the modern background check process we use in Maryland is comprehensive and rigorous, pulling data directly from national and local court databases that are up-to-date, while still encouraging part-time drivers, who make up the vast majority of our Maryland community, to drive with Lyft," the statement said.

Is Uber bluffing?

The taxi industry also will get to present arguments before the PSC. Dave Sutton, a spokesman for the Taxicab, Limousine, & Paratransit Association, said he believes Uber is bluffing because the company would not want to give up the lucrative Maryland market, which includes the Montgomery and Prince George’s County suburbs that are heavily trafficked by D.C.- and Virginia-based drivers, too.


“They would never leave this market. They are perfectly willing to adhere to fingerprint background checks in New York City,” Sutton said. [MORE]

Speed-camera revenue continues to drop in some Maryland communities

by Sean Riley

Washington Post

Cheverly, one of the first jurisdictions in Maryland to deploy speed cameras, has year after year reported losses from the automated enforcement program.

Still, town officials are reluctant to get rid of the cameras, crediting them with helping deter speeding that was pervasive before installation six years ago.

“Every year we lose a few dollars and we have a conversation about whether or not we should continue the program,” Mayor Michael Callahan said. “But the conclusion is always that we put the cameras in place to promote safety inside the town — and they have done that.

“People know the cameras are there,” Callahan said. “It slows them down as they go through town. . . . It really is that simple.”

As more drivers have become aware of the cameras, the number of camera-generated speeding tickets issued has declined in Cheverly and many communities across the state. Supporters and law enforcement officials say the shift validates the effectiveness of automated enforcement programs. But the programs have become a burden to some communities that benefited from the significant revenue they generated in the early years and are now struggling to maintain them.

The 45 Maryland jurisdictions with speed-camera programs collected nearly $57 million in fines in fiscal 2015, according to the most recent data provided to the Maryland comptroller. That represents about $3.1 million more than was collected the previous year but $13 million less than fiscal 2013, according to annual reports filed with the state.

There was a rapid expansion of speed-camera programs across Maryland after their use was approved in 2009, but that appears to have peaked, reflecting trends nationwide. The number of camera programs across the country remains steady at 143, according to the Insurance Institute for Highway Safety.

The declines in revenue have been particularly hard on small towns that were able to use the extra money to buy traffic and police equipment after the recession, officials said.

In Cheverly, a town of about 6,500 residents in Prince George’s County, the two speed cameras on Cheverly Avenue generated nearly $19,500 in fiscal 2015, a significant drop from fiscal 2013 when the program generated $188,077.

[Montgomery County gets the most cash from speed cameras in Maryland]


Last year’s revenue wasn’t enough to cover the $102,500 in administrative costs to run the program, but the town used funds from a much more prolific red-light-camera program to make up the difference, town administrator David Warrington said.

The town launched its speed-camera program in 2010 to deter drivers from speeding on a roadway used as a cut-through between Routes 50 and 202. Warrington said along with other traffic-calming initiatives, such as speed bumps, the town has tracked declines in speeding and a significant reduction in complaints from residents.

About four miles away, in Mount Rainier, a city with 8,500 residents and an annual budget of about $5 million, revenue from speed cameras plummeted from $1.7 million in 2011 to $4,030 last year — far short of the $41,236 administrative cost of running the program. City officials said they built a reserve during the earlier years and will continue to tap that to pay for the program until the money runs out.

But the news isn’t the same everywhere. Montgomery County, which generates the most money from speed cameras in the state, collected $18.7 million in fiscal 2015 — about $2.1 million more than in the previous year, state data shows. After hefty implementation and administrative costs, the county cleared $10 million.

Montgomery’s program, which started in 2007, has been so successful that it has become a model for jurisdictions across the country, officials said. A study by the Insurance Institute for Highway Safety found that crashes resulting in fatal or serious injuries on county roads where there are speed cameras declined 49 percent by 2013. The report also found that the county’s cameras have reduced the urge to drive more than 10 mph over the posted speed limit by 59 percent, when compared with Fairfax County, Va., which doesn’t use speed cameras.

“We are not seeing a whole lot of movement one way or the other as far as new communities adding,” said Jonathan Adkins, executive director of the Governors Highway Safety Association. “Over time revenues tend to go down because the public hears about these cameras. That is a sign of success because driver behavior is being changed.” [MORE]

San Antonio City Council reviews financial impact of deregulating taxis like Uber & Lyft

by Sean Riley


San Antonio City Council members are wrestling with how to reduce fees for taxis — as part of an overall effort to ease regulations on that industry — while still generating enough money to pay for what regulation remains.

City staff this week shared with council members financial projections that show the bottom-line impact of cutting some taxi fees while also raising other fees paid by taxis and transportation network companies, or TNCs, the industry term for ride-hailing app providers such as Uber Technologies Inc. The changes would impact the budgets of both the city’s ground transportation unit, which is charged with enforcing rules governing vehicles for hire, and San Antonio International Airport.

The city is in negotiations with the taxi industry and TNCs about such changes, the results of which will shape how people are able to move around the city without their own cars. Those negotiations are being shared with council members.

Under the scenario proposed to the council, the ground transportation unit’s net income would drop from $270,281 to $55,581. Its revenue would fall from the $648,600 that it generated this year to about $433,900. The bulk of that revenue is from fees paid by the taxi industry, which equaled $389,840 this year but would drop to $221,500 if the plan is approved.

"Those are only the basic operational costs. It only pays the staff salaries and business expenses for that unit," said Steve Baum, assistant police director of the San Antonio Police Department. "We would be just above break even."

Unlike the city’s ground transportation unit, airport officials said they are already operating in the red when it comes to regulating taxis and TNCs at the airport. This year, the airport reported a $112,237 loss with respect to that function when capital expenses are factored in.

The hottest submarkets in San Antonio included the area surrounding the airport and in the urban core, especially what appeared to be the hotel district, according to data shared with the City Council during the meeting.

NY Department of Labor says New York Uber drivers are employees, not independent contractors

by Sean Riley

NY Post

Two former New York Uber drivers are to be considered employees and not independent contractors as a result of a state Department of Labor ruling making them eligible for unemployment benefits, it was revealed Wednesday.

A lawsuit by the the New York Taxi Workers Alliance had spurred the department to make a ruling.

Uber had argued the drivers were independent contractors and thus the company did not have to contribute to unemployment or worker-compensation insurance funds, or guarantee a minimum wage, the alliance said Wednesday.

The alliance has scheduled a press conference for Thursday outside the Department of Labor’s Manhattan office to call for a comprehensive audit of Uber.

New Report says Uber and Lyft’s Growth Is Slowing in Most Major U.S. Cities

by Sean Riley


Some 13 to 15 million Americans will actively use ride-sharing services by the end of this year and that’s close to the ceiling of the total U.S. market that Uber and Lyft, the two largest U.S. ride-sharing companies, can capture.

That’s according to a report from 7Park Data, an NYC-based data intelligence company, which found that 20 to 25 percent of U.S. smartphone users have the Uber app installed and about three percent of them use it every week to order rides. The average ride is less than 15 miles. Ridership between Uber and Lyft has fallen about nine percent from the second quarter 2015 to the second quarter 2016, though.

While installs on only 20 to 25 percent of devices sounds like Uber has a lot of room to grow, a lot is likely an overstatement. Uber’s largest markets are major U.S. cities where ride-sharing is more useful than using personal vehicles or public transportation. The rest of the U.S. market lives in areas where most people own their own vehicles and the hurdles for ride-sharing are higher. “While the ride-sharing industry is expected to continue growing, the rate of growth is expected to slow,” the report states. “Uber, particularly, may be close to saturating at least its major U.S. markets, especially given lower fares and increased competition.”

The report’s data was drawn from panels that cover more than 50 million mobile devices across more than 75 countries. 7 Park analyzed anonymous mobile app usage statistics, device and network data and receipt data from millions of active U.S. and global consumers that use Uber and Lyft, including those of their competitors. It focused on active activity per user, or users who regularly use the Uber app each month rather than having it installed without ordering any rides.

The data doesn’t segregate travelers living in one U.S. city and using Uber and Lyft in another. If, for example, a traveler lives in a suburb of Kansas City, Missouri where they don’t use ride-sharing but travel to New York City for business or leisure where they do — that’s not considered in the report. While Uber and Lyft may be close to saturating their largest U.S. markets with residents, they both have potential to gain market share among travelers.

Byrne Hobart, an analyst for 7 Park, said the data show that rental car companies have been impacted in the largest U.S. ride-sharing markets that are some of the most visited U.S. destinations. “Uber and Lyft really need to go after commuters to increase their market shares and that’s exactly what they’ve been doing this year,” said Hobart. “But it’s still too early to know how that push has played out and if they’ve had success.”


In 2014 there was a significant spending gap with new users between Uber and Lyft but now that’s converged a bit, said Hobart. “At this time we don’t really know what the lifetime value of an Uber user is…Uber’s expected revenue per user is higher for a year after a new user starts they start than right after they start,” said Hobart.

During the past two years the average cost of an Uber or Lyft ride has gradually gone down as both companies are spending more per user this year than they were in 2014. “When we look at first-time users from 2014, they would typically spend a bit more than new users would spend right now in 2016,” said Hobart. “In 2014 a new Uber user would typically spend about $70 in their first month and then spend more than that per month in their first year. But now the average Uber user spends about $55 during their first month which is pretty similar to what the average Lyft user spends.” [MORE]

Taxicab Commission says Its Latest New regulations will bring the D.C. taxi industry into digital age

by Sean Riley


Four years after the District revamped guidelines for the city’s taxis in an effort to modernize the fleet, officials have again issued rules aimed at keeping up with rapidly changing technology.

By the end of summer 2017, the District’s 7,500 taxicabs must have digital meters and offer passengers the convenience of “tap and go” payment using such options as Apple Pay, in addition to credit cards and cash.

Digital platforms are new territory for the U.S. taxi industry, which historically has relied on mechanical meters that require maintenance and frequent calibration.

But as technology-based transportation services become more popular, cities across the United States are switching to smartphone-based systems that integrate GPS-reliant meters and electronic dispatch, payments and navigation.

San Francisco taxis have successfully tested the technology, and a small share of New York taxis are experimenting with “innovative solutions” to modernize that city’s fleet.

The District’s plan to fully transition to digital by Aug. 31, 2017, is an ambitious approach by regulators who say immediate and bold changes are necessary to keep the ailing industry viable, help reduce costs for struggling drivers and improve the rider experience.

The D.C. Department of For-Hire Vehicles has been testing a digital meter system it developed in-house and plans to distribute it to drivers free this fall.

Chairman Ernest Chrappah said the new regulations will significantly cut expenses for drivers who invest roughly $2,400 to outfit their cabs to meet the current requirements, in addition to frequent meter calibrations that cost $50 each. [MORE]

With No Input from Drivers, Taxicab Commission Moves Forward with "Emergency" Measures to "Overhaul" Industry

by Sean Riley


Changes are coming to all of Washington’s taxicabs under sweeping new regulations overhauling the meter and payment systems used by the assortment of cab companies and independent drivers who account for some 7,500 taxis.

The regulations, issued by the Department of For-Hire Vehicles in an emergency rule-making, strip away many costly regulations while giving consumers the kinds of amenities now taken for granted in a vehicle-for-hire industry increasingly dominated by popular ride-hailing apps Uber and Lyft. 

“There has been a continuous decline in total monthly taxicab rides — month after month for the past 12 months — without interruption. Driver revenue continues to fall. At the current rate, the Department projects that 2016 will show a 13 percent decline in annual taxicab rides,” according to a 22-page report on the state of the industry. Washington taxis pick up about 16 million passengers annually.

The transition to the all-digital meter system must be completed by Aug. 31, 2017. Although the physical meters now affixed to dashboards are going away, the current pricing structure will remain the same: $3.25 base fare, $.25 surcharge, and $2.16/mile. But cab companies for the first time will be allowed to charge lower rates in the form of discounts on the existing street hail rates. No surge pricing at times of high demand will be allowed.

“The taxi market needs a jolt. It needs to be revamped, and we are going to help make that happen,” says Ernest Chrappah, the department’s acting director.

Another overhaul on the way

Oct. 1 will mark three years since all Washington taxicabs were required to offer a credit card payment option to customers, one of several changes that was included in legislation designed to “modernize” the city’s fleet and repair its poor reputation.

“In 2012, the District’s taxicab fleet had a well-deserved reputation for poor service, dirty vehicles, a lack of payment options, and a disregard for regulatory requirements,” the department’s report says.

But the modernization effort was deeply unpopular with both companies and independent drivers who were forced to purchase expensive meters, dome lights, and adopt the fleet’s new color scheme, red and gray.  

And chaos befell the transition to credit card payments, with disparate tech companies competing for a finite number of backseat consoles. The result has been a lack of competition (only six companies are left processing credit card swipes across the entire fleet), with long contracts and high fees for taxi companies and their drivers, the report says.

“Through an attached card reader, a smartphone app can perform [meter] functions at a fraction of the cost per swipe, while creating open-ended space for innovation,” the report says. 

Even today, the quality of credit card payment machines varies from cab to cab. The new regulations issued by Chrappah will do away with the current hardware systems in favor of an all-digital platform.

“There’s no future for antiquated equipment in the District of Columbia,” Chrappah says.

Passengers will still be able to hail a cab on the street and pay cash, but by the time the new regulations take full effect, passengers will also be able to e-hail a taxi through a number of cheap apps, pay their fares with a saved credit card number or other digital device, and have the receipt texted or emailed.

“You would be able to pay using Apple Pay, Samsung Pay, whatever digital payment method works for you, you will get into a licensed taxicab and it is guaranteed to work,” says Chrappah.

Lessening the burden on drivers

Umoh Ekott has been driving a cab in Washington for 20 years, but he is thinking of giving it up.

“Sometimes you just have to make a change if something is not working out as you thought it would,” says the father of three during a ride up Connecticut Avenue NW. 

Ekott blames competition from Uber and Lyft for draining away “40 to 50 percent” of his income, but his costs remain just as high.

His meter and credit card system cost $500, he says. The dome light — patented by the District and manufactured by just two businesses — cost $700. His weekly vehicle rental fee is about $200, and he pays multiple fees for credit card processing.

“Ubers are not regulated. So a lot of cab drivers, they jump up to Uber,” he says in a dejected voice.

Under the new rules, the patented dome lights that cost from $400 to $700 will be replaced by a $20 version. “The Department believes it should be able exercise its administrative authority to approve any cruising light that meets the legislative requirements,” the report says.

Drivers will welcome a reduction in costs, says Royale Simms, an attorney with the Teamsters Union which represents more than 2,000 independent cabbies.

“So it is more like getting back to regular business where taxi drivers can determine what equipment they have and how they generate income, more than having regulations prescribed on them that in a lot of cases were unnecessary,” Simms says.

Chrappah’s report cites research by free market economists at George Mason University. In a report published in July, the economists said the regulatory burden hurts both drivers and passengers, preventing the industry from competing with Uber and Lyft.

“Under the new rules, taxis can use cheap, smartphone-powered apps instead of these antiquated meter systems,” says economist Matthew Mitchell, a proponent of deregulation.

“The department is giving away its own app but also in order to spur innovation in the app market, they are allowing drivers to use other apps that can be developed as well,” Mitchell says.

The new regulations may give a boost to the D.C. Taxi app, which has seen limited use and remains in public beta. 

Not everyone is pleased

David Miller, the chief executive of the D.C.-based software firm Hitch, stands to lose a lot under the new rules.

“My primary concern is this is a typical example of governmental overreach,” Miller says.

Hitch software can be found in the backseats of about 2,000 taxicabs, but his company does not fit into the Department of For-Hire Vehicles’ plans to do away with the current payment structure in favor of “digital taxicab solutions (DTS)… an open architecture system combining a state-of-the-art digital taximeter with the DC TaxiApp and as many other e-hail apps as the DTS provider chooses to integrate,” the report says.

In short, outside tech firms such as Hitch are being pushed out as the department shifts “the responsibility for providing systems to taxicab companies, taxicab associations, and, once it is fully operational,” a co-op of local cab companies. 

“This is government trying to manipulate the market,” says Miller, who disagrees with the department’s contention that the new rules will make things easier.

“In the end it is going to result in higher costs for drivers as well as complicated efforts of visitors and residents of the city simply trying to pay for cab rides,” he says.

Others are raising questions about process. The “emergency” nature of the new regulations meant they were issued with minimal public input, says D.C. Council member Mary Cheh, who chairs the transportation committee.

“I would prefer a system that was more open and inclusive of the people who are being regulated,” says Cheh, who was behind the 2012 legislation to modernize the taxi fleet after her office produced a survey showing widespread public dissatisfaction with cabs.

“Some of the ideas Mr. Chrappah has are very good ideas and probable ones we would want to embrace fully, but there is also something to having a process and getting buy-in from people,” Cheh says.

Simms, the Teamsters lawyer, echoes those concerns. “There is a need for more input from taxi drivers,” he says. 

Fake Uber Drivers Scammed Tourists at US Open: Report

by Sean Riley


Phony Uber drivers are picking up tourists outside the US Open in Queens and charging them illegally high fares, the New York Post reported

The drivers stand next to their cars and lure tourists with printed signs of the Uber logo, according to the report. They then offer a ride for more than double what it normally costs. 

  • After the report, an Uber spokesperson said the New York City Parks Department is to blame for the scammers.

The spokesperson said Uber was blocked from using a parking lot adjacent to Arthur Ashe Stadium, which would have stopped illegal drivers from luring tourists. [MORE]

Denver Taxi Drivers Seek Cooperative Ownership to Compete with Uber

by Sean Riley

The Nation

The largest taxi company in the Denver metro area is still mostly secret. On Sunday morning, the parking lot behind the Communication Workers of America Local 7777 office filled up with cars. Some already had the black or green paint of Green Taxi Cooperative, its name inscribed in Wild West-style type. But many were still unmarked, or bore the branding of one of Denver’s other cab companies, for whom drivers were working even after putting down the $2,000 investment to become a member-owner of Green Taxi. Some were still doing Uber. All 800 slots for Green Taxi members are full, and there’s demand for more. But nearly 150 drivers are out on the road so far. The rest are waiting, keeping their status as business owners quiet, biding their time to see if this will really work.

“I’ve never heard of a meeting on the Sunday before Labor Day,” Shiela Leider, the local’s political director, told the assembly of about 90 co-owners, nearly all of whom were born and raised in places where Labor Day does not exist.

Green Taxi drivers come from 37 countries, I’m told, especially East African ones. In a moment when the taxi industry here and virtually everywhere faces an existential disruption from Silicon Valley apps, these immigrant workers are self-funding a business model that puts them in control, turning Uber’s model on its head. They hope that without bosses skimming profits they’ll be able to take home enough to make driving a decent livelihood in the age of apps—with an app of their own. They’re wagering they can fight automation with democracy and shared ownership. “When we talk about the company, that’s you,” Abdi Buni, the board president, reminded his co-owners, “and when we talk about the drivers, that’s also you.”

With the backing of CWA, including an office Green Taxi rents in the local’s basement, Buni and his fellow founders have been clearing regulatory hurdles since 2014. The company’s slow, quiet start began when the office opened on July 1 this year; the first cars hit the streets later that month. It’s part of an international surge of taxi co-ops that are trying to turn the industry’s disruption-by-app into an opportunity for worker ownership—in suburban Virginia, in Portland, in Grand Rapids, as well as throughout Europe and beyond. Green Taxi’s scale, however, is especially ambitious. For the local taxi scene, it’s game-changing. For members, it’s a necessity.

“I paid extra to use the owners’ license before,” said Kidist Belayneh, who has been driving taxis about half of the six years since she moved to Denver from Ethiopia. “Now I’m an owner. We don’t pay extra.” She was one of just a handful of women in the room. She’d never felt tempted by Uber.

The trouble, however, is the airport. In a car-culture city, the backbone of the taxi industry is the $55.57 flat-rate fare between the airport—nestled in the high prairie, far from everything—and downtown. It’s $88.57 to Boulder. And according to how the airport has typically granted permits, proportionate to market share, Green Taxi’s 800 members should entitle the company to about a third of the 301 available slots. But so far, the company has only received 20—admittedly, still generous considering the number of Green Taxis on the road. But with 800 drivers, according to Buni, 20 airport permits wouldn’t be enough to keep the business afloat. What’s more, the airport is planning to change the whole system, just as Green Taxi organizes to claim its market share. The airport’s Web site now includes a notice about an impending contract bid for taxi companies, replacing the permits. An airport spokesman told me, “That would result in a higher level of service, vehicle consistency, branding, operating standards etc.” It could also reshape the city’s taxi business, and make or break Green Taxi’s plan to cooperativize—and unionize, with CWA—a third of the market. Rumors are flying about an insider deal, and nobody at Green Taxi seems to be in on it.

“I have really deep concerns about how this is being done,” Leider told the drivers. She said she’d been trying to reach people all over government about it and not hearing back. “Something stinks about this.” [MORE]

Yellow Cabs in NYC to install Touchscreen tablets, phone chargers, biometric readers, and Wi-Fi

by Sean Riley


Riding in a yellow taxi used to be a miserable experience, which helps explain why Uber and Lyft were able to swoop in and so thoroughly disrupt the industry. Fed up with unreliable and dirty taxi rides, passengers migrated en masse to ride-hail apps that promised cleaner rides, friendlier drivers, and seamless payments. Taxi operators tried to stave off the bleeding by rolling out their own apps — but most were just pale copies of Uber. Now, the traditional taxi industry is launching a new counter-offensive against the ride-hail menace: gadgets.

Starting this year and ramping up in 2017, Verifone Systems — one of the largest payment processing companies in the world — will install new technology in tens of thousands of cabs nationwide, in a massive effort to improve the cab-riding experience for not only riders, but drivers as well. Verifone owns taxi meters, credit card machines, and entertainment systems in dozens of markets in the US, including New York City, where it controls around half of the city’s fleet of yellow and green cabs.

The experience of riding in a yellow taxi is about to get high-tech. Gone are the bulky touchscreen TVs blaring clips from Good Morning America and the analog meters with their retro-red numerical displays. (Regulators in New York City announced last year its plan to phase out the annoying Taxi TVs.) By next year, many of TVs will be replaced with sleek, 10-inch touchscreen tablets with third-party app support. That means riders will soon have the option of streaming Spotify or booking a reservation with Open Table during their cab rides.

There will be a USB charger, because we live in an era when our smartphones always need charging, and Wi-Fi, because data plans are expensive. Credit card readers will also accept mobile payment options like Apple Pay and Samsung Pay. (Four years ago, Verifone tried its hand at mobile payments with its Square-like Sail card reader, only to pull out of the market months later.)

Taxicab Commission Proposes More Regulation for Taxis: Forcing Cabs Along Fixed Routes - $5 a ride max

by Sean Riley


Washington, D.C., is trying to plug a transportation gap for neighborhoods that are underserved by taxis — with a grant-funded van shuttle. A new pilot program, designed to make up for a dearth of cab service, operates like a small bus system. Eight-seat vans run along fixed routes in Wards 4, 7 and 8 every 40 minutes to an hour. Passengers pay a flat fee by cash or credit card; cost tops out at $5 a ride.

According to WAMU, the concept for the “Neighborhood Ride Service by Taxis” (NRS) was initially floated in 2014 by officials at the D.C. Taxicab Commission, now the Department of For-Hire Vehicles, as a way to provide transportation to the outer wards where it can be hard to hail a taxi.

Drivers say they tend to circulate in more central areas like downtown or Capitol Hill because that is where they earn the most money, but some residents of outer wards say drivers avoid pickups and drop-offs in their neighborhoods because of stereotypes that their streets are more dangerous. D.C. has Uber and other ride-hailing apps, but those private services are only available to people with smartphones, and officials say a number of communities, predominantly African-American neighborhoods, still remain underserved.

WAMU points out that between August 14 and September 13, taxis did 1,443,669 pickups in downtown and the National Mall, while in Ward 7 and Ward 8, taxis only did 11,970 pickups. Taxi drivers explain the simple fact that there are more passengers to be picked up in downtown, shopping and tourist areas, and that they are not discriminating against black residents by avoiding their neighborhoods. Over 95% of the drivers are non-white.

California Governor signs Uber, Lyft background check bill into law - no fingerprint requirement

by Sean Riley


Uber and Lyft will have to start conducting stricter driver background checks next year under a new law signed Wednesday by Gov. Jerry Brown.

Ride-hailing companies in California will have to bar any potential driver who has ever been convicted of a violent felony or a terrorism-related offense, or is a registered sex offender. Under current law, the companies only have to go back seven years when looking for criminal convictions.

The new law also prohibits companies from signing on drivers who in the past seven years have been convicted of misdemeanor assault or battery, domestic violence or driving under the influence.

The bill, AB 1298, passed in the legislature last month, on the last full day of the session, as The Mercury News previously reported. It was backed by Assemblyman Jim Cooper, D-Elk Grove.

“As a father of four daughters, I don’t want my children being picked up by a driver convicted of murder or rape,” he wrote in a news release when the bill passed.

Ride-hailing companies that violate the new law are subject to fines of $1,000 to $5,000 and up to three months of jail time.

The new law comes as Uber and Lyft are under fire over claims that they don’t do enough to protect the safety of their passengers. Multiple women have sued the companies claiming they were sexually assaulted by their drivers, and an Uber driver was charged earlier this year in a mass shooting in Michigan. Critics have demanded Uber and Lyft put their drivers through government fingerprint background checks, which the companies are against and have successfully avoided in most states so far. Now the ride-hailing startups conduct driver background checks, without fingerprints, using private companies.

The new law avoids the controversial fingerprint issue altogether — a win for Uber and Lyft.

Tampa: Temporary Operating Agreement Would Apply the Same Rules for Uber and Taxi, Limousine Companies

by Sean Riley


Tampa’s largest taxi company will consider supporting provisions of a temporary operating agreement approved by Uber for consideration in Hillsborough County if the same rules apply also to taxi companies.

“We also believe that a level playing field helps to ensure both fair competition on equal terms and also promotes choices when it comes to public transportation,” wrote Yellow Cab of Tampa CEO Louie Minardi.

"Although we have not had an opportunity to review the proposed agreement between Uber and Commissioner Crist, in the spirit of cooperation and fairness, we are amenable to considering the same or similar temporary rules and regulations for all Transportation Network Companies and the taxi industry," Minardi added.

Uber's agreement with Public Transportation Commission board chair Victor Crist has provisions that include level one background checks with searches in six databases, but does not include fingerprint-based level two checks. That has been a sticking point in negotiations for the PTC since it began its rulemaking process three years ago.

The taxi and limo industries have put heavy pressure on PTC board members to adopt rules for companies like Uber and Lyft. They argue the rules Uber suggests give the company an unfair advantage in the market.

During a press conference on Wednesday, Crist said he would be amenable to adopting the same set of rules for taxi companies.

Critics of the PTC instead argue the taxi industry is muscling the PTC into protecting the interests of legacy companies and that if taxis want to compete in the market, they should improve their product.

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Minardi’s statement maintained his insistence that the issue boils down to public safety and still believes strongly that a level two background check should be included in rules.

"Shorting Uber," Transportation Expert Steven Hill Says Uber Will Go Bust

by Sean Riley


Steven Hill thinks Uber has shaken up the taxi industry — or Big Taxi, as Hill calls it – in a way that’s been beneficial to many consumers.

And that’s about the nicest thing Hill has to say about the San Francisco-based ride-sharing company.

Otherwise, Hill— who has worked at the think tank New America Foundation and written a book about the so-called sharing economy — sees Uber as a rule-breaking, tax-dodging, labor-exploiting, market-manipulating, law-unto-itself capitalist behemoth.

Uber began as a tech firm using smartphones to connect people who needed a ride with other people willing to use their own cars to take them there, for a price. Since its founding in 2009, Uber has become a verb and one of the most prominent companies to rely almost exclusively on an army of freelance workers instead of employees.

But to get as far as it’s gotten, Hill argues in his book, Uber has evaded livery laws that previously governed taxi service in many markets; flooded the street with nonprofessional, unregulated and under-insured drivers; misled customers on the adequacy of background checks for its drivers and battled efforts for more rigorous screening of them, such as through fingerprinting; overstated the pay that drivers could earn working for Uber; and avoided paying some of the taxes and related fees that other taxi and limousine services must pay to local governments.

He doesn’t mince words about its billionaire co-founder and chief executive, Travis Kalanick, either. In his book, he describes Kalanick as “the reigning bad boy of ‘wild west’ capitalism,” an Ayn Rand wannabe who once used “The Fountainhead” as his Twitter avatar, and a 21st century P.T. Barnum who has grafted his outsize ego onto the company itself.

In emails and a recent interview, Hill discussed Kalanick’s company the way people once talked about other high-flying companies that rose spectacularly and then crashed. Hill predicts that it’s just a matter of time before Uber goes smash, too.

If anything, Uber’s headline-grabbing announcement of driverless service in Pittsburgh is yet another overhyped stunt to distract from bad news, such as the company’s defeat in China.

Hill has documented his skeptical view of Uber in Raw Deal: How the “Uber Economy” and Runaway Capitalism are Screwing American Workers. For his book, Hill reviewed news accounts, conducted interviews, and examined court records. The chapter on Uber has 133 footnotes.

Hill believes ride-sharing may be here to stay, but Uber is not. Tripping talked with Hill about his book and Uber’s place in new economy. Here’s the Q&A, which has been edited and organized for concision and clarity:

Q: People talk about Uber the way its chief executive does — as a revolutionary company. But you say not so much. Why?

A: My view on it is that what Uber is going for it, is that taxi service in the U.S., in most cities, is pretty horrible. In San Francisco …where I live, it would take 35 minutes to get a taxi. . .  So, yeah,  it’s great: you hit the app, and the car shows up now in 10 minutes instead of a 35-minute wait. But now the traffic congestion is so bad that you’re sitting in that car for 20 minutes longer to get anywhere.

And that’s another thing that Uber doesn’t want to face, but that cities now are starting to discuss and deal with: traffic congestion. The traffic congestion is so much worse. Now, is it all because of Uber? Not it’s not.  .  .[But]. . . you suddenly have a new service that’s committed to just flooding the streets with cars, putting thousands of more cars on the street. Is it any surprise that now the streets are more congested? . . .And yet people don’t want to deal with that. A lot of the sort of progressive-type people I know who really like their Uber, I say what about carbon-emissions, and congestion, and pollution?”

Q: As you know, this month Uber launched a test project using self-driving cars for public use on the streets of Pittsburgh. The demo treated journalists to an uneventful spin through the Iron City (along with full-time employee “safety drivers.”) What do you make of the news from Pittsburgh?

A: [T]he recent announcement about having a few self-driving cars on the public streets of Pittsburgh looks to me like an act of desperation — come on, what a joke: a few cars driving around Pittsburgh, and the human “non-drivers” still have to be sitting in the drivers seat? This is supposed to be a sign of progress? — trying to create an alternative news meme to distract from the other bad news.

Here’s how the self driving system works in Pittsburgh. First, an Uber employee must remain behind the steering wheel at all times, just as alert as an actual driver, ready to intervene if the car’s self-driving system makes a mistake. Indeed, operators are required to loosely grip the steering wheel and must be ready to intervene immediately at any time.

In short, the conditions for these cars are not even close to “real world.” This is more like getting in Pirates of the Caribbean at Disney World, or the bumper car ride at an amusement park.

They have a few friendly journalists out there who will report the “good news” no matter what Uber says. When are journalists going to start viewing this company with a healthy dose of skepticism?

I tend to mistrust and disbelieve everything this company says, initially, and then wait to see if any substance actually emerges. Usually it does not. .  .[T]trusting Uber’s numbers or press releases is like trusting the tobacco companies to do their own studies.

Q: In China, Kalanick made market dominance a priority and touted his company’s $1 billion-a-year investment as “sustainable” — until it wasn’t. Didi Chuxing, Uber’s archrival in China, bought out the San Francisco company in August. Why do you think China is a turning point for Uber?

A: That was a big shock because everyone thought Uber was this big, huge company, pretty much the 800-pound gorilla that can’t be stopped and, suddenly:  Wow – [it] looks like they’re not doing as well as people thought they were because they had to pull out of China, which they had really bet the bank on.

Q: But isn’t that because China is a difficult market to crack for almost any western company, given the difficulties of doing business there and the Chinese government’s heavy hand favoring its own?

A: That’s what made it all the more surprising that Uber was making such a big bet in China. They invested so much money there because they just saw a huge market. . . .

[Kalanick]’s a rather arrogant, Silicon Valley . . .Ayn Rand, libertarian-type ceo —  [a]  get-government-out-of-my-way type of fellow. He just sometimes doesn’t listen to commonsense. And people would tell him, “It’s a big risk you’re taking here.” And the reportage on it, going back for a few years was, “Wow, this guy is really ballsy. He really is going for it. This is the type of ceo America needs, you know?” And other people were saying, “Uh uh — it’s just a matter of time before he gets his head bitten off there.”‘ . . .and Uber [was] always insisting, “This is a big part of our strategy — things are going extremely well there,” and then suddenly — Boom! They’re gone, you know? And how much money did they waste there trying to get a foothold?

[Uber burned about $1 billion a year on China]

Q: You say you saw a similar move when Uber, after expressing confidence the company would prevail in its legal fight with drivers in California, reversed course and agreed to a settlement. Why?

A: The sense is, at least from my viewpoint looking at this, these are signs of weakness. I mean, here in Silicon Valley, you can watch company after company do what they call a pivot, where suddenly they change their business model. And they only do it for one reason, and it’s because what they were doing wasn’t working.

With a lot of these startups, you don’t know —  it’s all privately held so you don’t have any numbers to know how well they’re doing except for what they release. And, so you don’t know if these companies are actually making a profit.

So, as much as Uber is valued at $63 billion — that’s more than GM [or] Ford even though they don’t make a single car, they don’t own anything, they don’t even have any drivers because they say they’re contractors. . . — it just speaks to the froth that there is out here. And everything is kind of smoke and mirrors, you know?

And so when you start to see these other things you say, “Hmm, this looks like a pivot. This looks like a company that is still trying to figure out its business model to make money.” That’s what I see with Uber.

[Judge: $1,000 not enough to settle Uber lawsuit]

Q: In your book, you accuse Uber of flouting regulations that other companies must follow. Can you be more specific?

A:  This is a company that, even after it lobbies for particular legislation, still refuses to follow those parts of the law that it doesn’t like. So, for example, in 2013 California became the first US state to pass a law legalizing ride-sharing – a law that Uber had a significant hand in shaping. The state public utilities commission created a new class of “transportation network companies”  (TNCs) which established some rules, including for auto insurance, vehicle inspections, criminal background checks and more.

In addition, the new law smartly required Uber to share some of its data with public officials, including information on the number of trips by zip code, how much riders are paid, information about accidents and how many wheelchair-accessible vehicles had been requested. But the latter requirement did little good because Uber promptly ignored it. A couple of years later, regulators finally caught up with Uber’s truant ways and in 2016 Uber was forced to pay a $7.6 million fine for violating the part of the state law requiring company data.

And the district attorneys of San Francisco and Los Angeles sued Uber for misleading consumers over the thoroughness of their background checks, specifically its failure to use fingerprinting as part of those background checks. The district attorney of San Francisco claimed that the company’s criminal checks are “completely worthless,” which at the time who were vociferously disputed. Now, just recently, Uber agreed to a $25 million settlement for overhyping the safety and security of its product.

Q: You also accuse Uber of evading taxes and safety regulations just because the company is doing business over the Internet, and that its business model will be eventually prove to be unsustainable. Why?

A: I’ll tell you I’ve been in meetings with some of these venture capital people. . . and I’ve sort of cautiously mentioned this thesis . . . and they’re, like, “Oh no — look, I’ve looked at the numbers. This thing is off the charts! It’s going incredible!”… And this what they were saying a year and a half, maybe two years ago. They’re saying Uber — their internal numbers show it’s going off the charts, this thing is bigger than anybody realizes. . .Uber’s going to be delivering your food. They’re going to be delivering anything you want. They’ll be delivering the mail before you know it. . . And, instead, what we’ve seen since then is Uber pulling out of China, Uber settling that lawsuit everyone said they’ll never settle because it will completely overturn their business model.

Q: Do you really think Uber is going to collapse or be bought up by another company?

A: Look , I don’t have the internal numbers to – I’m not like . . . the hedge fund guy, Jim Chanos, who shorted Enron. He had lots of research and researched this stuff. But I’m just watching company behavior, and I’ve been watching enough of these companies in the past saying, like, ‘Everything is great,” “We are going full [tilt],” “This is the most amazing thing ever,”  and then the media hyping that and creating this bubble around these companies. Then, the next thing you know, ‘Boom!’ — that company is out of business. . . . Let’s put it this way: I’m shorting Uber.

[Lyft envisions future with self-driving “bar cars"]

Q: So a lot of people still can’t decide: is Uber, on the whole, good for us or bad for us? Or somewhere in the middle? 

A:  Uber has added a service that people like, and it’s helpful to them. So I think that’s sort of the bottom-line consideration. But if you go to a place like Berlin, where I just was, where taxi service is actually pretty good — there’s no space there for Uber to gain a foothold. . .  So here in the U.S., where we don’t have good taxi service, what Uber has shown us is that there weren’tenough taxis on the road because of the medallion system, which limited the supply. . . So now you have a company that has come along and put a ton more cars out there and service is better. It’s not rocket science that there needs to be more cars.  .   .The innovation from Uber is really simple: they put more cars on the road. That’s it.

Q: Final thoughts?

A: I think we have to say, ride-sharing is here to stay. It has added something valuable, especially in those places where there are not taxis to begin with. How do we incorporate it in way that deals with all these other public policy concerns?

'Unregulated Uber can do exactly what I do for a tenth of the cost' - Uber Now Offering "Scheduled Rides"

by Sean Riley


Uber is unveiled a new feature in the Washington metropolitan region last Thursday that expands its on-demand ride-hailing service onto terrain once held by traditional limousine and taxicab companies.

Customers using the UberX app will be able to schedule rides from 30 minutes to 30 days in advance, the kind of service cab and limo companies using central dispatch have offered for decades. UberX is Uber's "low-cost option" for rides as opposed to UberBlack, which is Uber's luxury car service. 

“It is something that people have been asking for, especially our business travelers,” said Tom Hayes, Uber’s D.C. general manager. In an official announcement expected on Thursday morning, Uber says customers will be able to “select uberX and tap ‘Schedule a Ride,’ set your pickup date, time, location, and destination, confirm the details of your upcoming trip and tap ‘Schedule uberX.’”

Customers will receive an estimated fare when booking the ride, but if it increases by the time of the pickup due to surge pricing, they will be able to cancel without penalty.

“Right as the ride is coming, you will get another fare estimate based on current conditions but you will be able to cancel within five minutes for no fee if you are not happy with it,” said Uber’s Hayes.

Unburdened by the regulations placed on licensed taxicabs and using technology further advanced than what is available to cabbies (the D.C. taxi app remains an afterthought in public beta), Uber continues to build on its dominance in the region’s e-hail market. Legacy taxi companies, already reporting steep losses since the rise of Uber and its ride-hailing competitors, now have one more thing to compete against – although the playing field still is not level.

“We will see a further erosion if we are going to be forced to operate under a very strictly regulated situation,” said Roy Spooner, the general manager of Yellow Cab Co., the largest centralized dispatch taxi company in Washington.

“Uber can step into my business without any regulations and execute it right off the top, but meanwhile I have to install dome lights, paint cars a specific color, can’t carry my brand name any longer, put expensive systems in my cars, can’t reduce costs to my drivers, and operate under every regulation you can possibly think of to remain a legitimate taxicab company, but Uber can do exactly what I do for a tenth of the cost,” Spooner added.

It is not clear whether Uber will eventually expand its schedule ride option to Uber Black - such a service would directly compete with the region's limousine and sedan businesses. 

D.C. taxi regulators have been working on proposals to allegedly "deregulate" the industry, including a plan to let people use their personal cars as licensed cabs (X Class), similar to UberX (nearly any car with 4 doors will suffice as there are currently no proposed age or mileage requirements). In other words, regulators are looking to create and then regulate an entirely new business. This new City run business will further diminish the value of taxi and limousine licenses.