Tuesday, December 16, 2014

Reining in Uber

The unregulated taxi-cab market has exploded over the last few years. The most prominent, Uber, has been since engulfed in controversy. Initially the controversy was over the legality of these unregulated app-based cab services. I remember the harsh penalties imposed on unlicensed cabbies driving university students home while I was a student, and while some municipalities have tried to stamp out these companies none have had any meaningful success.

As opposed to the people trying to earn a few dollars by shuttling intoxicated undergrads home companies such as Uber are protected as multi-billion dollar companies who can hide behind their apps and cater to a more affluent crowd than those in the unlicensed cab space. I’ll let the class implications of that one speak for itself.

While Uber is joined increasingly by competitors such as Lift it remains the frontrunner, but its status might soon be threatened by a number of internal scandals and public relations disasters.

The most extreme case is at least two incidents where Uber drivers have been accused of raping female passengers, one in Chicago and another in New Delhi. Uber has been blamed for improperly screening its drivers and given the nature of Uber’s service makes these crimes more possible compared to traditional cabs. As an app Uber has a great deal of personal information about its clients. At a private party Uber executives “joked” about using their data to embarrass journalists opposed to their business practices. This is the terrifying part of the privacy-less tech revolution - that someone might use it against us.

Couple with this that Uber’s employment strategies might cast the company in an even worse light. First Uber has been taking a greater share of its drivers’ revenue. According to a recent episode of “This is Only a Test”, the podcast of Tested.com, it was stated that Uber now charges drivers 35% of their fare. Worst still, Uber is aggressively marketing predatory loans, subprime loans to its drivers. Not long after news surfaced of a student loan program seemingly designed to fleece students/drivers. Uber seems to have quickly bridged the gap between feisty upstart and predatory corporation in record time.

Uber and its cohort proved that major innovation was and is desired in the taxi-cab market. However, Uber’s behaviour justifies the existence of these regulations. Clearly municipal governments should examine the pricing structures used by taxi companies to ensure greater flexibility in the market. On the other hand the immoral and unethical behaviour of Uber demonstrates that the state has a role in protecting its citizens as employees and customers.

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