Disclaimer: I’m an avid Lyft rider and have used Lyft various times over the last 3 months.
Uber is fucking evil.
I’m stating that now so you’re aware that, yes, I am going to have a bias in this article. That said, despite that, as always I’m going to present a fair assessment of the facts of the issues before I go into my opinion. I’ve done that in the past regarding Secretary Clinton and her emails, and I’ll do that again now.
But first, a history lesson:
In the early 1900’s, the car was a new invention that allowed people to travel distances in a short amount of time compared to the horse and buggy or just walking. That said, not everyone could afford a car, so taxi’s came into form as an alternative. There was a problem, though: By the 1930’s the taxi was so popular that there were too many of them. There were too many on the road, not enough passengers, and additionally there were problems with the drivers themselves.
In turn, the major cities that had taxi’s decided to fix the problem by instituting laws and regulations on the industry with the creation of the medallion system. The medallion systems sought to limit the number of taxi’s on the road at any given time thus allowing more fair competition. Medallions, in turn, can be purchased by an individual or company and allows them to operate a taxi cab.
Additionally, in order to get a license you need to do a whole number of things: You need a special license, special training, and to pass a state background check. The rules were created to make sure that the riding public was kept safe since taxis are, in fact, a form of public transportation.
Then come the disrupters.
Starting in 2009, drive share companies like Uber were finding a way to bypass cabs. At this point, hailing a cab could be difficult if you didn’t have any around in a major city, and due to the decrease in competition over the decades from other companies since everyone seemed to have their own territory, cabs had steadily gotten worse over time.
Uber, in turn, created what they called a “ride-share” app. The idea was simple: If you need a ride somewhere, why not have someone “share” their car for a fee? Its similar to getting a ride from a friend and then chipping in for gas. The app connected people directly and allowed people to both get a ride and become drivers. Drivers were paid through the app, and riders simply connect a card to their account to pay for the ride. Uber, in turn, got money from being the facilitator.
In 2012, Lyft got into the ride-share game as well, and between the two companies, they have completely reshaped the way people get a ride.
In the last 10 years, people have come to rely less and less on having their own cars in major cities, something that has accelerated in the last 5 years, and Uber and Lyft seem to be leading this charge.
Additionally, because of the rise of competition, the cost of medallions have begun to come down drastically. In 2014, the PPA tried to auction them at $475,000, nearly a half-million dollars. There were no takers, and the price now hovers between $40,000 and $65,000.
The PPA will not have this.
The Philadelphia Parking Authority, or the PPA, handles any and all cab and limo service in the City of Philadelphia, along with parking tickets and all things related to those issues. They issue medallions and make sure that cabs and limos are following the law. In Philadelphia, similar to most major cities, the law is, for the purpose of this article, fairly cut and dry: In order to operate a taxi service in Philadelphia, you MUST have a medallion and the appropriate licenses, otherwise you’re running an illegal operation.
The problem with companies like Uber and Lyft is that they don’t have these.
Requirement for Uber drivers are fairly lose: You must own a car and you must pass a brief background check. The background check done is not the same as the one for a cab company: It’s done by Hirease, and consists of only filling out your name, address, Driver’s License and Social Security Number online, and nothing else. There is no drug screening, no going to the police station to get your finger prints scanned. The industry standard is LiveScan, a fingerprint scanning system that also cross-checks to see if you have any sort of criminal record as well.
In order to drive a cab, you also need additional training. Uber doesn’t require this. In fact, they offer additional training but nothing regarding how to deal with things that most cab drivers have to: Angry and drunk passengers, violence, assault. The videos only cover things like how to become a better driver and get 5-star reviews.
Then there’s pricing. Cabs are regulated to have a flat base fare and only charge for millage and distance. Uber and Lyft, on the other hand, have “surge pricing” which can happen at any time for any reason. This means a ride that is normally $10 can balloon up to $20, $30, or more because they decide to. It isn’t shocking to see bars let out in an area and the price has a 25 – 100% “surge” pricing due to demand. Its worth noting that the CEO of Uber has even bragged about this practice.
Additionally, vehicles are not inspected to the same standards as those for a taxi service, nor do they have the same type of insurance.
I feel like I’m only scratching the service, and in essence I am. I’m not going into my personal commentary yet, but it is worth noting some anecdotal issues with Uber in regards to safety.
For example: Uber, at one point, charged additional money in order to have a “safer” ride. For an extra dollar, you could have your ride tracked. Its worth noting that Lyft offers that same service for free by default. There have been numerous accounts of people also sharing their ride-share accounts to drive and and one passed their background despite being a Level 2 sex offender.
Cities try to cope
Because Uber and Lyft have had a more “its easier to ask forgiveness than permission” approach to the law in regards to their companies, they’ve created a fairly brilliant business model: Get the support of the people by being the “Every-man” and the “Hero of the working man” by offering low prices and serving areas that cabs normally don’t. That means that cities, in turn, can’t immediately shut them down for their illegal services without causing a massive disruption in their cities in one way or another.
At this point, I need to do some commentary, but please keep in mind all of this is based on facts.
Uber has pulled moves to stay legal similar to what you would imagine some 1900’s oil tycoon would do: They’ve mobilized support for their company by paying as many lobbyists as possible to shill for them to local city councils and other governing bodies to get their ride-sharing companies legalized in some form or another. They’ve spent millions and millions of dollars on advertising and campaigns to legalize their services. On top of that, there is a public that is more than happy to support them. If you don’t believe me, post this story on your Facebook page, Twitter, or anything else, and watch the anger come in supporting them.
They have effectively bullied their way into the marketplace, and have forced cities to deal with how they want to do business: With no regulations of any kind.
Back to sheer facts:
Uber has about 7000 employees. Every single one of their drivers isn’t an employee, they’re only an “independent contractor”. Because of that, that means these drivers are not subject to OSHA protection or even the rights people working at McDonald’s enjoy. They have no rules regarding their own personal health insurance, reimbursement for using their vehicles for work, etc.
Then there are all the state and local taxes that are missed because, again, these are local “independent contractors” working in a city, not employees. In the city of Philadelphia, because these aren’t employees, they are not required to pay the local City Wage Tax. Again, more money being lost.
And cities across the country have relented. San Francisco, New York City… the list goes on.
The PPA Strikes Back!
The PPA, though, has not relented… much.
In July of 2016, SEPTA lost 1/3rd of their entire Regional Rail fleet. In turn, the PPA legalized the use of Uber and Lyft inside the city of Philadelphia to help ease the congestion. It was during that time that I actually took my first Lyft.
A quick side story: I took my first Lyft after getting home from a 2-hour long bus ride from NYC. The bus had no Air Conditioning and it was the middle of July on a sunny day, so you can only imagine how rough that was. Once I got off, I went to to train station to get home, only to find out my train was canceled a the last minute. Another one wasn’t for an hour. I decided to give in and get a Lyft home since the average cost of a cab from Center City to my house was about $30. Lyft offered it for half. The driver showed up, was a little rude at first, but we wound up having a good talk instead. I was thankful, and I’ve taken it for long rides ever since.
I mention that because before then I was fully against apps like Lyft and Uber because of everything I mentioned. That said, I still have issues with both companies and I still want these regulations in place.
The PPA does, too.
Starting this month (October 2016), the PPA has demanded that both Uber and Lyft stop service in Philadelphia immediately since SEPTA is now back to full-service. Uber went to court and sued to get them to stop, and won. As of this writing, both services are currently allowed to operate.
Its worth noting that the Commonwealth of Pennsylvania has a whole host of laws regarding how cabs operate, and they all can be seen on their website.
The public wants this to stand since they prefer their services, and after using Lyft periodically since July, I can see why. They tend to be cleaner and cheaper than taxis.
The problem, though, is that they’re not regulated and while it may be fine now, do we really want this to continue as-is?
Uber sees the future of ride-sharing different than we do: They created a market where their service is nearly essential and they want to fill that market with a fleet of self-driving cars. That means their entire fleet of “independent contractors” will be replaced. No more petty humans driving around other humans, just machines that can work longer and easier than people… which means more money for them since they don’t have to worry about all the things I just mentioned. No pesky background checks, no training, no fear of robots doing deplorable things to passengers.
But even if that winds up not being the future, we would still have hundreds of thousands of people driving around with no background checks, lack of proper insurance, and lack of training. Its well known that being a taxi driver is one of the most dangerous jobs in the country, and we now have thousands of people willing to go into that line of work and just as many people willing to ride with them.
We created these regulations not to stifle business but to protect it and the public at large. While attacks have been few and far between, along with accidents, we should make sure that these issues are dealt with now and that the marketplace is fair in terms of competition.
Editors note: I got inspired to write this after I saw this video a year ago on Cracked about Uber, and motivated even more by Inside Man on CNN when Morgan Sperlock went to Silicon Valley to pitch his app and talked about the issues related to Uber and Lyft. I recommend seeing both.