Should Uber be shut down?

Harvard business professor says the real problem in the tech industry is a "contagious" culture of lawbreaking that society shouldn't tolerate

Everyone’s talking about Uber’s latest problems with management style, sexual harassment, company culture … and CEO Travis Kalanick, who embodied all of that, has been forced out.

Big investors hope Kalanick’s resignation and a deep internal investigation will help position the company for an IPO. They want Uber to go public pretty soon, and all of these scandals are tamping down the stock price.

Uber driver blocks the bike lane on Valencia -- but who cares? The company was founded on a spirit of lawbreaking
Uber driver blocks the bike lane on Valencia — but who cares? The company was founded on a spirit of lawbreaking

But there’s another interesting perspective on Uber (and Lyft, and some of the other tech disrupters) that has appeared not in The Nation, or Mother Jones, or 48hills but in the Harvard Business Review, the voice of the eminently establishment Harvard Business School.

Harvard Associate Professor Benjamin Edelman presents what sounds like a radical hypothesis, but it actually makes perfect sense. He says that Uber can’t be fixed, that the corporate culture was poisoned from the start – and that the only solution is for regulators to shut it down.

The company’s cultural dysfunction, it seems to me, stems from the very nature of the company’s competitive advantage: Uber’s business model is predicated on lawbreaking. And having grown through intentional illegality, Uber can’t easily pivot toward following the rules.

His analysis also applies to Lyft – and to . These companies, he argues, are the equivalent of Napster – they’ve developed a useful new application of technology, but in the process violated a long list of existing laws. Now that the tech is out there, society needs to say: No, you can’t do this.

The end of Napster, which at this point most people agree was a rogue operation, didn’t mean the end of shared online music – we have itunes, and Spotify, and Pandora. The customer still gets the advantages – but the musicians get their royalties and the system that we have carefully evolved to protect the rights of artists hasn’t been completely destroyed.

Let me talk for a second about Napster.

Wow, that was cool: Just sign up and you’ll never pay for music again. The entire entertainment industry was torn up, which is what so many tech types want. Disruption.

And some good friends of mine, who were in bands that were what writers call “mid-list” – that is, not Kendrick Lamar or Bruce Springsteen, but popular enough that they could make a modest living selling records – were totally screwed.

Suddenly, record companies weren’t paying advances any more for mid-list bands to go into the studio and record (which takes time and money). Suddenly, unless you were a superstar who could sell out huge stadiums for live shows, you were out of luck. Suddenly, you couldn’t make new music anymore.

Yeah, startups got rich, and the already rich did fine – but ordinary working musicians saw a threat to their livelihoods. That has been the model for the tech industry: Disrupt and make quick cash for a few (already rich) investors and the lucky folks who found a cool app – but destroy the lives of tens of thousands of working people who had a decent middle-class life.

Napster was shut down; the entertainment industry has a lot of clout. The cab drivers of the world don’t.

Uber, Edelman notes, wasn’t the first to come up with the idea of offering rides through a smartphone app in private cars. That was Lyft. And Kalanick, who was doing a limo service at the time, was among the first to note that it was utterly illegal:

In a remarkable April 2013 posting, Kalanick all but admitted that casual drivers were unlawful, calling Lyft’s approach “quite aggressive” and “nonlicensed.” (After I first flagged his posting, in 2015, Uber removed the document from its site. But Archive.org kept a copy. I also preserved a screenshot of the first screen of the document, a PDF of the full document, and a print-friendly PDF of the full document.) And in oral remarks at the Fortune Brainstorm Tech conference in June 2013, Kalanick said every Lyft trip with a casual driver was “a criminal misdemeanor,” citing the lack of commercial licenses and commercial insurance.

More:

Given Kalanick’s statements, you might imagine that Uber would have filed a lawsuit or regulatory complaint, seeking to stop unfair competition from a firm whose advantage came from breaking the law. Instead, Uber adopted and extended Lyft’s approach. Others learned and followed: Knowing that Uber would use unlicensed vehicles, competitors did so too, lest they be left behind. In normalizing violations, therefore, Uber has shifted the entire urban transport business and set an example for other sectors.

 

No help from City Hall

When Uber and Lyft starting violating San Francisco’s law by running illegal taxis, I met with Chris Hayashi, who was the head of the city’s taxi commission. We sat in her office and she showed me a pink Lyft mustache that she’d bought online. Anyone could buy one, she said; anyone – including criminal predators – could pretend to be a cab driver.

There were reasons that the city had regulations about who could drive a taxi. Uber and Lyft were breaking those rules every single day, with impunity.

In an interview with the Examiner after she left her job, she noted:

Here I am, trying to steer the Titanic and someone hits me over the head with a baseball bat, is pretty much what the TNC issue is like,” Hayashi said. “We were about to clear, and all of a sudden here comes billions of dollars of venture capital for people who are willing to break every law in the book.”

She had no support in the Mayor’s Office, where and then Ed Lee were all about supporting tech innovations, no matter who got hurt.

I called Edelman, who has both a law degree and a Ph.D. in economics from Harvard, last week and we talked for about half an hour. He told me that the most common tech-industry response to his arguments is that the laws these companies are breaking were bad laws anyway, and that consumers were better off with Uber and .

“But a lot of laws weren’t written just to protect buyers and sellers, but to protect third parties,” he said. Car-safety and pollution regulations aren’t just in place because they’re more convenient for drivers, many of whom would never voluntarily pay for them.

“Suppose you go into a parking lot and there are six handicap spots, and nobody is using them, and you are only going to be there for five minutes,” he said. “As an individual, you might say it’s dumb for all those parking spaces to not be available to you. But you still can’t park there.

“There might be conditions – a perfect, flat highway – where it would be safe for me to drive 95, but I still can’t.”

Edelman has been researching hotel fires from the 1940s, when large fatalities weren’t uncommon. “There are reasons that we put in place laws to protect strangers,” he said. “There are reasons hotels have extra exits, sprinklers, bedding that’s more fire resistant. Those rules are basically wise. And would prefer to get rid of them.”

Nobody, Edelman says, “wants to pay extra for safety precautions. But if your taxi service doesn’t include a surcharge for wheelchair cabs, then there aren’t going to be any wheelchair cabs.”

A climate of lawbreaking

Edelman argues that allowing one or two companies to break that law is “contagious.” Which is exactly what’s happened in San Francisco.

In the past few years, under Mayor Lee, we have had a climate of consistent, repeated lawbreaking on a level that’s hard to imagine – and was almost never reported in the mainstream news media.

Landlords violated zoning laws to replace industrial jobs with tech officeswith impunity. convinced more than 6,000 people in San Francisco to violate the short-term rental laws, every single day – and nobody did anything about it.

Tech companies on the Peninsula chartered private buses that parked in public Muni stops, where ordinary mortals would get a $275 ticket – and City Hall under Ed Lee had a “handshake deal” to look the other way.

Is it any surprise that landlords evict tenants for bogus “owner move-in” claims? Why not? This city never enforces its laws anyway.

Napster wasn’t legislated out of existence – what it was doing was already illegal. When the lawsuits started piling up, though, the company’s assets were soon less than its liabilities.

Edelman suggests that every city where Uber has illegally run taxis (and the same could be applied to ) should file suit and seek $1,000 in damages for every unlawful ride. That would be enough to force the companies to shut down.

It wouldn’t be the end of the model they have developed; it would just leave room for a service that follows that same model to do it legally.

The result wouldn’t be a cheap as Uber (or Napster) – but he argues that all of us, society as a whole, would be better off.

But making society better off doesn’t seem to be a part of the — yeah, let’s just say it — uber-capitalism that has been driving public policy in this city. It’s not just generic lawbreaking; it’s this idea that the rules don’t apply to the tech masters, because they are better than the rest of us. And that’s what needs to get disrupted.

  • jcguy

    Have been reading Tim for a long time and frankly don’t ever agree with his brand of critical thinking much less his politics…..But this is spot on….The gig economy has undermined the quality of life, not to mention the livelihoods, of way too many San Franciscans ,

    • playland

      The gig economy has undermined the quality of life, not to mention the livelihoods, of way too many San Franciscans

      Really? I had been under the impression that Uber provideds a service that is incredibly popular. I see people using it all day long. Wasn’t aware that it was undermining our quality of life.

      48 Hills is really big on letting voters decide. Maybe we should have a referendum on allowing Uber to continue in our city. I wonder how that would turn out.

      • I would have liked a referendum first, not after Uber used corporate malfeasance and lawbreaking to gain market share.

        • playland

          Um, no. All the corporate malfeasance and lawbreaking in the world won’t get you a point in market share if you aren’t offering a service that people value and that improves their situation.

          But I see your point…now that so many people have found Uber to be of value we better not ask them if they want to keep it around. Good thinking.

          • jcguy

            Hard to believe I am backing up Tim Redmond here but for the last 30 years cities like SF have pushed for a public transit first approach. Now Uber and Lyft are undermining years of public policy by creating a two tier transit system…Uber Lyft for the haves that can afford it…and public transit for the have nots who can’t

          • Not A Native

            Why can’t public transit have several tiers of service? Why is “one size fits all” the only possible solution to providing public transit? Aren’t HOV lanes and motorcycle lane splitting tiers of service? Muni runs X buses that offer a more exclusive service(at no additional charge by order of the BOS) where buses are never as crowded or have offensive sights/sounds/smells often associated with muni buses.

          • jcguy

            Not an issue of one size should fit all…..For for better or worse many cities including SF visualize a future where public transit replaces the personal auto in the urban cores. Uber Lyft upend that goal by undermining the use and expansion of public transit and in theory making public transit less expensive via more users and less public dollar competition with other forms of transportation. People in higher income levels can afford ride shares, people less fortunate can’t on a regular basis. They get stuck with a under sourced and underfunded transit system that can’t reach its full potential because cars still dominate transportation.

          • SF Sunset Guy

            Good one! SF Muni and BART and CalTrain and SamTrans and the GG ferry services were just peachy before Uber and Lyft came along? They were functioning like a Swiss watch were they?

            These subsidized, incompetent agencies (all) were poorly run, deliberately under funded (SFPD charging Muni for calls and attention) but the reason they can’t “reach their full potential” as you put it, is because cars? Where is Muni expanding to? How exactly did they make public transit less expensive in theory? The fares keep going up, twice this calendar year on Muni alone.

          • Geek__Girl

            That is not the purpose of express buses. They provide a faster passage from home to work, and back, during limited times.

          • Not A Native

            Gee that’s what Chariot and Uber/Lyft do too.

          • Geek__Girl

            Chariot is one thing, Uber/Lyft are another. Uber/Lyft simply ignored existing laws, and began operating gypsy cabs, by hiding behind a fiction.

          • Geek__Girl

            Just because something has “value” or “improves the situation” does not make it legal, right, or moral. Predatory pricing is often popular, at least until the predator wipes out competition, and prices soar,

          • Not A Native

            It’s ridiculous to suggest Muni will be wiped out by Uber/Lyft.

          • Geek__Girl

            I was talking about taxi companies. Please refrain from the logical fallacy of straw man arguments.

          • Not A Native

            Whats wiping out taxi companies is the large cost and low number of medallions. Medallion holders are unwanted non-working partners of every cabbie. To have a sustainable cab fleet, SF should set minimum cab rates. Cab permits should be given to individuals at nominal cost, like other business licenses. Cab companies should provide only vehicles, insurance, and dispatch services but not be able to charge drivers for the right to drive a cab.

          • Geek__Girl

            Nothing is “wiping out taxis companies.” They are being hurt by unlawful companies that are ignoring laws, and are engaged in predatory pricing. San Francisco does set taxi rates, All cabs are the same price. Uber and Lyft charge what they want, and they are engage in a violation of Federal law. And how, pray tell, would cab companies make money?

          • Not A Native

            Your words: “Predatory pricing is often popular, at least until the predator wipes out competition…” “I was talking about taxi companies.”
            Please try to maintain a consistent point of view rather than simply emotionally outbursts.
            Cab companies(drivers) would make money by providing a service that customer’s want at a price customers are willing to pay. Artificial costs that increase the price to new entrants and enable “rent seeking activity” by incumbents only serve to establish groups of entitled and disentitled people.

          • Geek__Girl

            Cab companies are who the predatory pricing is aimed at. Uber has forced Lyft to lower prices, but again, taxis have rates set by the City. They cannot charge more, they cannot charge less. And taxis don’t have billionaire investors paying half the cost of fares. Please refrain from the condescending silliness. It only shows how weak your arguments actually are.

            And stop pulling straw man arguments. That is really irritating. You said, “Cab companies should provide only vehicles, insurance, and dispatch services but not be able to charge drivers for the right to drive a cab.” Cab companies make their money off of what the cab driver has to pay each night. If the driver works hard, and covers that charge, and then makes more, he comes out ahead. Customers will take advantage of predatory pricing. That is what Uber is counting on, but it can’t last. Uber will have to raise rates to double what they are not, in order to make money. Self-driving cars are a couple of decades away at least. That, or Uber will become worthless and wind up in bankruptcy.

          • Not A Native

            You’re stuck on what some cab companies do now and insistent that they not change. Same for the regulatory regine. Some cab companies, like Flywheel, have changed their business practices to better meet changing needs and technologies. Yellow cab didn’t. Business, like living organisms, must adapt to a changing environment or go extinct. You have a problem accepting environmental change and consequent adaptation. That’s on you, not me.

          • Geek__Girl

            When I have I said they should not change? Flywheel is an excellent program. Ironically, I had the idea not long after it became possible to develop apps for the iPhone. I talked to someone about it, but didn’t see a lot of interest. My idea was to have an app for a specific cab company, and operate their their dispatch. That was a major flaw at the time. Flywheel went through several versions, but they got it exactly right. And Yellow Cab had several lawsuits that brought them down. Not that they have really gone away, just changed hands. I don’t have a problem with legitimate companies innovating. I do have a problem with companies that ignore the rules, violate the law, and bribe and/or bully their way into markets.

          • Not A Native

            Read the history and learn that what you have “a problem with” is exactly the same way that current cab companies came into existence. Your problem is ideological rigidity and the arrogance of being ignorant of history.

          • SCCA

            Flywheel changed nothing but their name. They operate on a model exactly as they did when they were DeSoto. Cab companies that have their own app don’t make any more sense than have their own radio dispatch. The problem is simple. You can’t get the closest cab you can only get the closest cab that you “called.” Very, very inefficient and caused the destruction of the industry.

      • jcguy

        Guess u don’t walk, drive, or bike in SF much huh? Try it sometime and count how many times lyft/Uber drivers from places as far as Sacramento,who have been driving for 15 hrs straight, create total traffic chaos on every street at all hours of the day.

        • playland

          OK…I see people get in Ubers all the time. I’ll be sure to ask the driver if they are from Sacramento from now on.

          create total traffic chaos on every street at all hours of the day

          Wow!!! Every street at all hours of the day. I had no idea!!!

          • jcguy

            Be careful when you do. You will be risking life and limb from the 30 Ubers rolling right behind him

      • Y.

        Sure. Just make sure that the referendum also forces them to follow the rules like any other cab company.

        • playland

          Yeah…I do think that proper regulations are in order. I just don’t understand the zeal in shutting down a service that so many people benefit from.

          • Ragazzu

            No, sir, proper regulations are not in order. It is illegal to defraud an insurance company, i.e., that you are giving rides to the public all day on personal insurance. That’s the Lyft model.

          • Y.

            (I think you misread them, and that they meant “proper regulations are called for”.)

          • Ragazzu

            I stand corrected, Y.

          • playland

            Yup! Luckily those highly vulnerable insurance companies have you to look out for them. Otherwise they are pretty much defenseless.

          • Ragazzu

            When you’re injured in an Uber or Lyft that has non-commercial insurance, you’re S.O.L. That company informs you that the driver has voided the policy, and the ride-hail company says it’s only a software platform. You’ve got nobody to sue except the kid with the totaled car. It has happened again and again. Don’t take my word for it, ask your insurance agent.

            Nobody loves an insurance company—until they pay out.

          • playland

            That company informs you that the driver has voided the policy, and the ride-hail company says it’s only a software platform.

            Yeah…totally untrue, sorry.

            Uber maintains insurance for any driver that is under-insured.

            https://www.uber.com/drive/insurance/

          • Ragazzu

            And if that driver has no license, registration, or is using his brother-in-law’s account? (See Boston’s recent ride-hail driver audit.)

            Man, P.T. Barnum was right. Good luck to you. Bye.

          • Geek__Girl

            And I quote: Coverage is at least $50,000 in injury liability per person with $100,000 in total liability per accident and $25,000 in property damage liability per accident. In another words, you kill someone, or totally out someone’s, oh say, Tesla, you are SOL. The person who’s care you totaled will own you.

          • Y.

            The benefit of cheap and abundant rides comes at the expense of safety, low pay and no benefits to the drivers, and congestion. All the things that taxi regulations are aimed at preventing. That’s where the zeal is at.

          • playland

            Yup. Those are certainly issues. It’s like… the premiums on Obama Care being too high so 30 million people need to lose coverage. Same logic.

          • Y.

            What?

          • playland

            There are problems with Obama Care so the Republicans want to shut it down without regard for the people who benefit from it.

            There are problems with Uber so Progressives want to shut it down without regard for the people who benefit from it.

            I know, I know. It’s only wrong when the other guys do it, when you do it it’s okay.

          • Geek__Girl

            That is the single most idiotic analogy I have seen in some time.

          • OafishBlowfish

            Really, 30 million have lost/are going to lose coverage because of Ocare? you’re a clown

          • playland

            Really, 30 million have lost/are going to lose coverage because of Ocare? you’re a clown

            Oh sorry. It is 32 million. According to the Congressional Budget Office.

            32 million people would lose coverage if Obamacare was repealed

            So it turns out that I’m not a clown, you’re just woefully uninformed. Who knew?

          • OafishBlowfish

            “if Obamacare was repealed”. so don’t repeal it

          • playland

            Sorry. People who read the news understood what I said. Republicans want to do away with Obama Care because the premiums are too high.

          • Y.

            Tip: when you try to make a point by analogy to another situation, and then you have to explain the other complicated situation, maybe that’s not the clearest way to make your point.

          • playland

            Well, yes, but…you guys are Progressives, where logic plays no role. So it is easy why you might need some things explained slowly to you.

          • Y.

            Well, you sure showed me.

          • Geek__Girl

            You’re statement had no logic. You wrote nonsense.

          • Geek__Girl

            No, Republicans want to do away with Obama Care because it was from Obama. They want to replace it with a plan that will do even more harm.

          • MKR

            Both major political parties are wrong about health care. Obama couldn’t pass a single payer health care system even when he had control of Congress the first two years of his Presidency. Now the Republicans have promised to wave a magic wand and solve all the problems with a cheaper easier plan which is …what exactly?
            Everyone is enslaved by health care in the United states at this point. We have four major health care systems, the employer based system which started in the 1940s, Medicare, Medicaid and the Affordable Care Act to attempt to fill in the gaps. The four systems can’t really be smoothly integrated but to change everything into single payer is opposed by the party in power in Washington for the time being. So everyone gets screwed by paying more for dysfunctional care.

          • Geek__Girl

            Yes, Obama Care benefited some people, but it harmed others. I worked for a few months providing phone support for a large chain of pharmacies. I took calls from all across the country, and I saw what people in various states were paying for health insurance. There were basically two choices. Extremely expensive plans that had relatively low deductibles, and very affordable plans that had such high deductibles that any need for serious health care would bankrupt the person.

          • SF Sunset Guy

            Taxi regulations were to keep the taxi companies profitable, not to benefit the drivers, or the public for that matter. Keep the numbers of cabs low, prices up, and the city can still collect a quarter mil per medallion. sweet scam wasn’t it?

      • jcguy

        Btw great that you are good with predatory businesses like Lyft and Uber that exploite their employees by conning them into being”independent contractors” that don’t provide even the basics like retirement, medical, workers comp, or any chance to organize and improve their working conditions but hey it’s popular so it must be o.k.

        • playland

          Oh, listen…I’m with you on that one. The fact that Uber forces people to drive for them, whether they want to or not. I think that is just plain wrong. People should be able to freely decide if they want to drive for Uber.

          • Y.

            If you eliminated the minimum wage, people would still be taking $3/hr jobs, because it’s better than nothing, and one can always hope for a better job. That’s what’s happening here. A lot of would-be drivers just try it out for a few months and find out that they can’t make enough, and they quit. These guys basically lose money to provide cheap rides (and profit to the companies).

          • Not A Native

            A lot of taxi cab medallion holders don’t drive at all. They rent their medallions and thus take a cut of each fare. That’s different from paying a Uber executive or programmer. The executive and programmer actually do things that might benefit the driver, like making her more efficient so she gets more fares. The medallion holder doesn’t nothing in exchange for collecting rent.

          • Geek__Girl

            The medallion holder provides the right to be a cab driver. No cab can operate without a medallion. Uber simply ignores that detail.

          • Bill Alvarado

            Absolutely

          • Not A Native

            Uber provides TNC service, not cab service.

          • Geek__Girl

            That is a fiction created by politicians to help cover for Uber. In fact, it was originally name “Uber Cab.”

          • Not A Native

            No, TNC is reality. A regulatory reality. Just like cab service is a regulatory reality. The same reason why cabs aren’t plentiful and it isn’t as inexpensive for a person to own a cab as it is to become a hot dog vendor in the Mission.

          • Geek__Girl

            It is a term that did not exist until 2013 when the CPUC dreamed it up so they could protect Uber and Lyft from local regulation. It is basically a legal fiction to allow them to operate illegal cab operations. It usurped the right of cities to regulate these companies.

          • Bill Alvarado

            The Medallion holder usually had to wait in line, sometimes years and pay a very large sum, plus buy the cab for the drivers that they lease it to along with the maintenance costs. They had an up-front cost earned from their driving wages.

          • Not A Native

            Making money off another person’s work, whether you’re a medallion holder or a Uber investor is the same thing. Waiting in line isn’t moral justification for lifelong right to not work. You’re not at all concerned about the welfare of people who waited in line but never made it to the front. Don’t they also deserve something for their wait? Both medallion holders and Uber investors take a risk. Sometimes risks are realized.

          • SCCA

            Medallion holders that don’t drive get almost nothing in rent these days cuz the drivers left to drive Uber etc. But now the streets are flooded with Uber etc . and those drivers and the cab drivers that are left can’t make much. That is why the numbers of Taxis has always been controlled. I used to own a small cab company in SF and was for all practice purposes bankrupted by the policies of CPUC whom does not believe in regulation.
            btw, who pays when a TNC driver is injured? The public cuz TNC’s don’t have Workers Comp.

          • curiousKulak

            FWIU, Uber is not ‘making a profit’ – it is burning thru VC$. That s part of why Kap was pushed out.

            True – the drivers don’t get enuf. And apparently the fares are cheap. Its a big marketing scheme to dominate and destroy – iow, a gamble by VC investors.

            Not to say taxi industry is turgid and moribund. And MUNI sux.

          • Geek__Girl

            And it is illegal.

          • sebra leaves

            What you get is a big cut to the SFMTA that charges taxis a lot more than Ubers to use the public streets, AND sets the rates the taxis must charge their riders. Uber sets their own rates. Here they are posted on the SFMTA web site, if you don’t know where to find them: https://www.sfmta.com/getting-around/taxi/taxi-rates

          • Geek__Girl

            Right now, Uber pays nothing to use the public streets. And taxi rates are posted in every cab.

          • Geek__Girl

            No, because Uber’s venture capital investors are paying for it. It is called predatory pricing.

          • Y.

            Another way to think about it: sweatshops and indentured servitude are systems which produce cheap stuff for a lot of people, which are set up by mutual agreement between employee and boss. Desperate people will take dangerous and poorly-paying jobs. We shouldn’t benefit from their misery.

          • playland

            Alright…I already said that I am against indentured servitude and think that Uber should discontinue that practice immediately.

            And BTW, for many drivers Uber isn’t their job. It’s something they do in their spare time to make some extra money.

          • Y.

            Some yes, some no. And if you only drive 3 hours a day, you should still make more than minimum wage.

          • Geek__Girl

            And to be taken advantage of.

          • SF Sunset Guy

            only if one is willing….

          • Geek__Girl

            That is a bit simplistic. But not surprising.

          • SCCA

            Right and if people don’t like working for $5 an hour they can go elsewhere. Glad you aren’t running the world.

      • Ragazzu

        Read the news links listed in the below website, and you’ll see exactly how quality of life has been undermined by Uber and Lyft:

        http://www.whosdrivingyou.org/rideshare-incidents

        • playland

          Look, you gotta give up on pushing the notion that people don’t value Uber. We wouldn’t be reading this article if not for the fact that Uber found a better way to serve the public.

          But if you want to exchange links:
          Woman Dragged Off Muni Bus, Assaulted, Robbed By 10 People

          OK…now I’m sure that you want to shut down Muni because it has problems also. Consistency is key!

          • Ragazzu

            A Muni anecdote doesn’t prove anything. I’ve been riding Muni for decades and I’ve yet to be dragged off and robbed.

            You didn’t click on that link, did you! (I’m sure you’re one of the good Uber drivers—one of 45,000 clogging SF streets.)

          • SF Sunset Guy

            just no. While emotional anecdotes are not okay for Muni, they’re instructive for Uber and or Lyft?

            There aren’t 45,000 uber drivers clogging SF’s potholed streets. The max on any given (even a busy Friday) is about 6500 cars.

          • MKR

            Safety isn’t really the issue. You are never safe in the United States. And its not about uber drivers having insurance coverage. It’s about the fuck you mentality so prevalent in American business.
            When you download a uber app you automatically release the company from liability should something happen. If you get killed by a terrorist driving a uber car your estate or relatives can’t sue uber. Whatever happened to The customer is always right motto? They are saying to their customers ” Anyone who is stupid enough to do business with us gets what they deserve, they get screwed. Fuck you our customer”
            Do you really want to patronize a company that doesn’t stand by its word and wants you to release them from liability before you even get started? Isn’t that like a car company saying “We are not going to give you a warranty because if our air bags kill you its your own damn fault because you are so stupid to trust us. ”
            Is it legal? Possibly. It hasn’t really been challenged on a large basis for example a city suing Uber . Groups of employees have sued them because they treat their employees like shit, another reason to avoid them . Remember a few years ago when a suicidal pilot flew a plane into a mountaintop killing all the passengers? The Airline had some responsibility and liability in that situation. Could San Francisco or another city like London sue them if a Uber driver-terrorist drove a car into a crowd of people ? Lets hope it doesn’t come to that.
            Never give up your right to sue, sometimes its all you have.

          • playland

            Those disclaimers never hold up if there is true negligence. You sign one before you go hang gliding and if you fly yourself into a cliff the company is probably not responsible.

            But if you could prove that the equipment they gave you was defective and they knew, or should have known, then the disclaimer that you signed doesn’t mean anything in court.

            And in terms of ‘do we really want to patronize’ a company like Uber? Apparently the answer is overwhelmingly yes.

          • MKR

            It seems unlikely that the authorities will shut down Uber unless something really terrible happens. If you chose to use their service go ahead. I am lucky enough to be able to walk to work and I don’t have to use Uber . I don’t like patronizing companies with a fuck the customer attitude.
            Disclaimers sometimes hold up sometimes they don’t. The fact that they want you to sign over their rights says something about the company in my opinion

          • Geek__Girl

            And in terms of ‘do we really want to patronize’ drug dealers? Apparently the answer is overwhelmingly yes. But funny, dealing drugs is still illegal. Just because something is priced so low, because of venture capital, does not make it right.

          • Geek__Girl

            Let’s see…one isolate incident, versus an ongoing pattern of malfeasant behavior by Uber drivers. You’re grasping at straws here.

      • Geek__Girl

        They are causing traffic problems, they are exploiting their drivers, they are engaged in predatory pricing against a regulated industry that cannot legally fight back, they are actually breaking the law in numerous ways, and they have engaged in other outrageous behaviors. Yes, they should be shut down.

  • Y.

    Before Lyft and Uber, if you had dared to start running pirate cabs, you’d likely get shut down very quickly, if not jailed. Once the billionaires did it on a large scale, they had to be accommodated.
    Similar thing with food trucks. The Mission St. hot dog trucks had to look over their shoulders for the cops, because the city was not interested in legalizing those. Once the rich kids got interested, it turned out that permitting and regulating street food worked just fine.

    • This is exactly the point — the big guys can violate the law with impunity. It’s the Leona Helmsley approach (“only the little people pay taxes.”) I park for five minutes too long at a meter, I get a stiff ticket. I run a Google bus and park in Muni zones for two years without permission, and I never get a single ticket. I do an illegal sublet, I get evicted; I use Airbnb and nothing happens. One rule for the rich VC-supported tech lords, and another for the rest of us.

      • playland

        I park for five minutes too long at a meter, I get a stiff ticket. I run a Google bus and park in Muni zones for two years without permission, and I never get a single ticket

        This might be difficult to explain, but the Google buses used the bus stop to benefit thousands of people. When you park in the bus stop you just benefit yourself. Also, Google coughed up $3.9 million a year so that youths could ride muni for free in exchange for the use of the bus stops. Not sure who you offered to benefit.

        I do an illegal sublet, I get evicted; I use Airbnb and nothing happens

        What???? Try renting out your place on Airbnb if you have a no sublease clause. See how that works.

        Yes..society does give people some leeway if it looks like they are coming up with a better way to do things.

        • Y.

          Google coughed up the benefit after the heat went up.
          If Joe’s Airport Shuttle, or Mom and Pop’s Senior Transport tried parking in bus zones, they wouldn’t be able to get away with it. The tech shuttles basically pulled “Don’t You Know Who I Am” until pissed off people forced the city to have them pay for the right to use the bus stops. Whether what they pay balances off indirect costs of the buses is yet another question.

          • playland

            If Joe’s Airport Shuttle, or Mom and Pop’s Senior Transport tried parking in bus zones, they wouldn’t be able to get away with it.

            Huh??? The Art Academy and other private shuttles never used bus stops???

            And senior transport shuttles get kicked out if they use a bus stop? Do you have any idea how ridiculous that sounds????

          • Y.

            Before the tech shuttles started breaking the law, I believe bus stops were strictly for Muni/SamTrans, no exceptions.

          • playland

            bus stops were strictly for Muni/SamTrans, no exceptions

            Oh yes…of course. Thanks for helping to refresh my memory. Nobody ever stopped in a bus stop before 2012.

          • Y.

            Not legally. Not that they got away with it with a cop watching. Sure, everyone plays a risky move, knowing that every once in a while they’ll be punished. But the small operators knew that they had a choice between obeying the law or risk a big fine. The buses knew they were breaking the law, and the city rolled over to let them get away with it.
            My point is, you say, “Google buses used the bus stop to benefit thousands of people.” I say, other services did so too, but for the most part they didn’t break the law doing it, and the city wasn’t going to change the law for them, or let them get away with breaking the law when they got caught.

          • curiousKulak

            If you remember back to the 70s, there used to be private jitneys running all the way along Mission St to DC. They were quicker, more frequent, and (well, I don’t think even MUNI was as dirty then as it is now) competitively priced.

            They went away – with the heavy hand of govmint (and backing from the Transit Union). But that was still the time of “Big Business – Big Labor – Big Govmint”. We’ve got about one and a half left.

            I wouldn’t be in favor of just eliminating the disrupters. Not unless – like Napster – new venues were brought in to replace the 2000 taxis that idle at SFO and the major hotels.

  • Brian T

    Slight difference. The fines for copyright violations in the case of Napster were already on the books. Tim’s retroactive law for a $1000 fine per ride isn’t legal or moral.

    In 10 years, most car and truck drivers will be out of work due to self driving tech. Let’s focus on the future which is retraining those millions of workers.

    • Ragazzu

      Let’s not base policy on predictions ten years down the road. Let’s base them on the measurable here-and-now.

    • bedelman

      In many jurisdictions, including most of those that I have studied, there are preexisting laws on the books about using noncommercial vehicles (without commercial registration, commercial plates, commercial drivers licenses, etc.) to provide for-hire service. Usually these laws include a high penalty on, yes, a per-ride basis. $1000 is not uncommon.

      My suggestion in the underlying article, which Tim conveyed here, isn’t a *new* law (which I agree would be hard or impossible, and arguably immoral or worse, to enforce retroactively). Rather, my suggestion is strict enforcement of the existing laws already dully enacted and codified but, for whatever reason, to date usually not diligently enforced against Uber, Lyft, and kin.

  • Not A Native

    The exact same arguments can be(and were) made about marijuana growing and marketing(trafficking). But here we are legalizing outlaw activities and worried that the individuals most involved in the illegal production and distribution may not be allowed to continue their enterprises.

    The die was cast when the CPUC asserted authority over what they called TNCs. And the reason is because everyone saw that maintaining the value of a taxi medallion in SF at $250,000 while allowing them to be rented out was simply a subsidy for the few creating a permanent scarcity of taxi services to the many. It was the same “pay to play” game that SF has engineered to support City land prices for the benefit of landowners..

  • Not A Native

    The real economic issue with Uber is that its fare structure isn’t sustainable. Investors are now subsidizing every Uber ride(by 1/2 of the charged fare according to some estimates), despite the fact that drivers may not be earning minimum wage. So Uber, as it is now, will “go away” on its own. A conversion to self driving cars is the only solution I’ve heard so far…..

  • chris12bb

    “The law is an ass”, as times change as a society we get smarter (hopefully) and we need to examine current law and update. This is such a time.

  • Bryan Costales

    The capitalist model is to maximize value for share holders. If the cost for breaking the law results in more increased value than the costs of following the law des, the sound business decision is to break the law. The problem is the model. We can seek to change the model, or we can revisit this problem repeatedly year after year.

    One solution is to elect people that will protect us from that model (which is more difficult than you might think). Another solution is to increase the cost using fines and law suits (swatting flies after they have infected the house). Another solution is to find ways to change the model so that these problems become rare and are less harmful when they do occur. I favor this later solution, despite it being the most fundamentally difficult one to achieve.

  • Dirty Burrito

    There’s a few things that bother me about this article.

    1. The idea that “anyone – including criminal predators – could pretend to be a cab driver” is ridiculous, because the cab is hailed though the app. As if you’d see a car with a pink mustache and stick out your arm like olden times, and then get picked up by someone who has no relationship with lyft. Seriously?

    The worst you could say is Uber/Lyft are not vetting their drivers well enough, which leads me to my second point: I have a family member who is a drug addled, diagnosed paranoid schizophrenic who would never make it as an Uber driver, yet managed to drive a Yellow Cab in Oakland for the better part of a decade, without medication. Apparently he can drive a car and not get in an accident (?), but it’s easy to see he’s completely and utterly out of his mind if you talk to him for more than 30 seconds.

    2. Uber opponents continually allege TNCs somehow have a safety issue. Have these people ever been in a yellow cab? Some of the most harrowing rides I have ever taken have been in yellow cabs. I’ve only taken Uber maybe a dozen times, but the drivers have been way less crazy, which I assume has something to do with Uber’s ability to track speed and acceleration, and passenger feedback.

    3. “if your taxi service doesn’t include a surcharge for wheelchair cabs, then there aren’t going to be any wheelchair cabs.”

    Bullshit. There’s a demand for wheelchair accessible cabs, and the market can serve that.

    4. I could go on, but if you read between the lines, the real issue here is traffic. Uber opponents want to go back to a world where they can drive their private car on the street and not have to share it with the unwashed masses riding Uber.

    • Geek__Girl

      1. It is really simple. You put an Uber sticker, or Lyft sticker on your car (Readily available on Amazon, including Uber/Lyft combo signs) and you drive around looking for someone on a curb looking at their phone and looking for their driver. Pull up, they hop in, and off you go.

      2. Yes, I have taken cabs here for almost 15 years, and I have never felt unsafe. I have never taken Uber or Lyft, and never will.

      3. Uber has too few such cabs, and has repeatedly been sued for failing to properly serve those with disabilities, in particularly those with service animals.

      4. I don’t have a private car. And interesting that you use the term “unwashed masses.” That is part of Uber’s rhetoric.

  • Bob Koelle

    I don’t know if this exists in San Francisco, but In Philadelphia (and presumably elsewhere) the legit cab companies have developed their own app which works quite well – 215-getacab. Unfortunate that they didn’t develop it sooner. I guess it takes a Napster to spark innovation sometimes.
    I have been totally baffled by Uber and Lyft’s valuations. An app that directs what used to be called gypsy cabs is somehow worth billions?
    I’m also concerned about a consumer culture that says getting something as cheaply as possible regardless of consequence should be lauded.

    • Y.

      There’s Flywheel in SF. Yellow Taxi have their separate app, too.

    • Geek__Girl

      It is called Flywheel. There are also some others, but Flywheel is excellent.

      • Bob Koelle

        I had heard the name flywheel, but didn’t know what it was. Thank you!

        • Geek__Girl

          You’re welcome…

  • Bobinsf

    To get rid of uber/lyft, San Francisco voters have to get rid of the corporate democrats that run the City and Progressive platforms have to stop calling them “moderates”. Call them what they are: corporate sellout puppets.

    • SF Sunset Guy

      won’t happen. too much money at stake.

  • Jonathan Bonato

    Thank you, Tim Redmond, for writing this…. I shared it with the Singapore Straits Times today – as they had an article about UBER in Singapore. I don’t want a global taxi monopoly, and I share the same concern that this company is founded upon breaking the law, to me, its more akin to a mafia operation than a respectable and socially responsible business enterprise, and its not sustainable – it makes no sense to create traffic gridlock by bringing in drivers from as far as Fresno, Bakersfield and Redding, to drive a few days in SF, sleeping in their cars. We don’t let bus drivers or ariline pilots do this, but we are letting UBER get away with putting distracted and sleepy drivers on the streets. We need government protections and oversight of our transit needs.

  • Alex

    Fucking imbecilic premise. What rational capitalist would shut down a company conservatively valued at $70 billion with healthy cash flow?

    • Geek__Girl

      What healthy case flow. They are running on other people’s money, and that will run out very soon. The only cash flow is money pouring out/

  • sebra leaves

    What a coincidence that a Harvard scholar picks the “Summer of Government Overreach”, to acknowledge “Corporate Overreach” and lawless disruptive behaviors. When corporate “shared-property” schemes proved popular with the public, politicians helped pave the way. Now, they are trying to clean up the mess they created by disrupting communities and displacing millions of law-abiding citizens to make way for visions of a perfect future in 2040. It must be easier to fix the future than the present.

  • sebra leaves

    Let’s just take control of the taxis away from the SFMTA, let them set their own rates and see who becomes more popular. That way, the public has an opportunity to chose a system with built-in protections without having to pay twice as much for the opportunity to do so. How is a taxi not a
    “shared ride” service? You can order them online now same as the TICs. The only difference is that they are stuff under the control of the SFMTA. Release them and give them the same deal.

  • Sue

    Chariot is one of the latest scofflaw operations in San Francisco. I have been taking photographs of this company’s vehicles stopping illegally in public bus stops (like the tech shuttle buses: it remains a violation of the California Vehicle Code 22500.5 for private carriers to operate in public bus stops), and double parking to pick up and discharge passengers. I even once saw a Chariot vehicle stop at a red light (behind another vehicle) and discharge a passenger, without pulling over at all — that was on Geary Boulevard at 5th Avenue. The SFMTA scrapped its last jitney regulations in 2011, and is now in the process of writing new regulations to accommodate Chariot (however, apparently once 2 percent of Chariot’s business expands outside of San Francisco, its regulation will fall under the CPUC). There could be another useful tool in the regulation of TNCs, Chariot, and the tech shuttles — Proposition 26, which has carved out exemptions in which cost-recovery fees do no apply. Under Proposition 26, passed in 2010, private operations that make use of government property (curbs and streets, for example) and/or operations that are voluntary (which would apply to the Commuter Shuttle Program) are not restricted to cost-recovery fees. When the taxi industry sued the SFMTA over the price of the medallions in 2012 or 2013, the SFMTA argued that Proposition 26 allowed the agency to charge whatever it wanted to charge — and won.

  • Juneaux

    Why is it nobody, including Redmond, ever mentions Ed Lee’s familial relationship to Lyft? Lee had a vested interest in dragging City Hall’s feet so that the taxi industry could be irrevocably ‘disrupted’.