Unpacking Uber’s role in the transportation system and policy

Earlier this year, I wrote a brief piece looking at existing and on the horizon taxi and taxi-like transportation services in Vancouver from the user perspective. A month or two after this, I was very glad to see Luke Brocki at The Dependent tackle the structure of taxicab licensing in Vancouver — an area rich in questions and history that deserved (and still deserves) a lot more attention than it usually gets.

An image of a taxicab on Vancouver's Granville Street at night

Photo by Alejandro Mejía Greene from Flickr, CC.

The story is ever-evolving, with the new smartphone-savvy sedan service Uber making a splash. The gist (from Uber’s FAQ):

Uber is an on-demand car service that allows everyone to have a private driver experience through iPhone, SMS, and web based requests. We are a technology startup that has created a more efficient means of transportation, making your city more useful and more pleasurable to move around in. Uber connects clients and our network of professional town car and limo drivers in the simplest most elegant way possible, and we do it at a fraction of the cost.

(If you’re curious, here is a detailed account of using Uber in Vancouver).

Over at Boing Boing, Xeni Jardin shared her personal experience with Uber. Xeni offered the story as a reaction to the news that Washington D.C. is considering reviewing its bylaws in order to protect the existing taxi industry in light of the competition Uber is presenting. From Xeni’s post:

I absolutely love the smartphone app Uber, which allows you to order car service on demand, instead of trying to hail or call a cab or order a black car. It became an essential tool during my radiation treatment for cancer in LA, when treatment made me too weak to drive, public transportation didn’t serve the route I needed to get to the hospital, and I was just too flaked out to arrange rides in other ways. When my friends Tara Brown and Sean Bonner “gifted” me some Uber credits, I tried it once and was hooked. Uber wasn’t a luxury for me, but a truly practical service.

It is also the very definition of a disruptive technology: as Napster was to the recording industry, Uber is to taxi unions. And, not coincidentally, the guy behind it is Travis Kalanick, who was once sued for $250 billion by the MPAA, RIAA, and NMPA over his now-defunct P2P search engine Scour.

In his latest round of pissing off legacy industries by building great internet-based services, Kalanick has managed to upset the forces that represent Washington, DC area cab drivers. And the DC city council is now considering regulation that would mandate much more government oversight over Uber’s operations, and severely cramp its style.

Uber is along the lines of the kind of thing that I wrote about in my previous article — a service that only works when individuals on both the supply and the demand side have access to real-time location-aware information about each other’s supply and demand respectively. One of the challenges with Uber is that it doesn’t create new transportation supply in a form we are more accustomed with — such as new moving infrastructure (like new transit vehicles) or new or re-allocated static infrastructure (such as a new water crossing or bike-lane). This is, in fact, improved allocation of moving infrastructure — coordinating excess supply that always existed (in the form of off-duty limosines) with demand that either would have been previously fulfilled up by taxicabs, transit, people begging favours from friends, (in some cities) car-sharing, or, in the worse case, resulting in trips not taken.

What I’ve done above is describe Uber’s contribution using my modest toolbox of transportation economic terms. What prompted me to do so is the face I pulled when I saw the word Xeni chose to describe Uber in her post: disruptive. That word carries a lot of baggage that and disguises a lot of problems, in my view. Disruptive can certainly be descriptive in the sense that it disrupts the situation as it currently exists, the status quo. But the occasional tone with which people use the word disruptive — the glowing, revalatory air — overly attributes positive social change with private business entrepreneurs 1. Disruptive implies that a change is positive and desirable by virtue of the fact that it upends existing systems. It reeks of a kind of economic determinism: that by virtue of something being more efficient, it is unquestionably better for everyone involved. As you can pick up from the tone of the first quote, this is undeniably a large part of Uber’s self-image.

That assumption makes me cringe really, really hard, because it makes it seem like the winners and losers in the re-configuring of a system somehow each deserve their respective successes and failures; or, that all else being given, those involved will always, unwaveringly back a bad system as long as they personally see benefit. That is profoundly reductionistic for all the players involved, and a really bad faith way to characterize policy decision-making. Don’t misinterpret me as taking an extreme position by this; I’m not a pollyanna believing everyone will put aside their differences in selfless support of the common good. The realities of the politics surrounding such decisions are not lost on me. But a neoliberal approach that automatically says we should let Uber re-configure our transportation system however it will simply because it can just because it’s amazing fantastic technology, strikes me as a pretty myopic position biased towards people with smartphones and saying taxi drivers should either adapt (which some will find easier than others) or fail and have only themselves to blame for their fate.

To me, what is worse is that it purports to have some kind of moral certainty that the existing system is worth overthrowing. Here’s a completely hypothetical situation that illustrates how problematic this can be. Earlier this year, TransLink was considering cutting the Taxi Savers program, which provides seniors with taxi vouchers to use for unexpected trips when using transit or the HandyDart door-to-door service wasn’t feasible. This program was costing TransLink $1.1 million per year and they were about to get rid of it, but seniors anticipating its impacts managed to save the program through a dedicated letter-writing campaign. I know nothing about how the economics of this program work out for taxi drivers, but let’s hypothesize that taxi drivers do see a bunch of their business impacted negatively for Uber. What happens to their ability to provide services to Taxi Savers? Do they bill TransLink more? Does that impact different demographics differently? Transportation systems are integrated and complex in that way. Private businesses get to make choices about their business models in ways that allow them to focus narrowly. Governments don’t technically have that luxury — even though circumstances dictate that they have to, to the detriment of those who slip between the cracks. (This, without even considering the question of who drives taxis anyway?)

Is the existing arrangement worth defending? I wouldn’t pretend to know what the answer is — and I’m uncomfortable with the idea of anyone, tech or transportation startup, asserting that they do, even if I get why they have to say that. If nothing else, this is a heads-up to transportation departments in cities everywhere to think about who wins and loses as a result of tools targeting and serving new segments, and being proactive in helping us talk through how this tracks with, say, the next 30 years of the city) or region‘s transportation future.

1 – Not to play favourites, but social entrepreneurs, seem to at very least pay lip service to the complexity of the systems into which they enter. Not all of them, of course.

4 Comments

  1. Both Uber and Car2Go annoy me because their apps are only available on iPhone. (Not that I can think of a good reason to use Uber.) My phone runs Symbian so I have no expectation that either will become available that way, but is there really no reason why an Android app could’t be developed? At least I could then use that, where is is wifi, on my tablet.

    I recognize that the problem is that we do not have an open standard for apps that would work on any system – but it seems to me that we are all paying too high a price for Apple’s walled garden approach. And we do seem to have advanced beyond the days when web sites only opened on one brand of browser. Why not apply the same rule to apps?

    Posted September 28, 2012 at 9:38 am | Permalink
  2. Stephen,

    The issues with Apple are hardly restricted to apps related to transportation, but given the breadth of the need to get around, it’s perhaps one of the areas in which the issues with multiple platforms present themselves as the most irritating. Uber and car2go actually represent the two different routes available to transportation services: Uber creates their app in-house (from what I can tell; if other know differently, do correct me); and car2go has an open API to encourage third-party developers with the desire and skill to do so, to make apps for all platforms.

    Both have their benefits and drawbacks. On the tech side of things, people are watching the economics of developing apps for the Android platform vis-a-vis what gets paid for pretty closely. Being an iOS user I can’t say I know much about how that situation is shaping up or how quickly that will change, but there have been some interesting posts from folks who have been unpacking how much something costs to develop versus how many people will actually pay for it. (I think pretty much all car2go apps cost at least 0.99 to 1.99 at least). The long and short of it — if Android users prove to developers without a doubt that they will pay for the apps that they want, chances are good developers will feel more confident throwing money towards creating good apps.

    Uber, I assume, centralizes that experience for all cities, and that is part of its appeal. Their economics probably come down first to making sure their pricing/service model is sound, then expanding their reach.

    Posted September 28, 2012 at 12:51 pm | Permalink
  3. Hey Stephen,

    Just wanted to clarify something. Our apps are available on both iOS and Android, have been for some time! We also have a mobile site to request from (http://m.uber.com) as well as an SMS option.

    - Craig
    @Uber_VAN

    Posted October 30, 2012 at 5:21 pm | Permalink
  4. I’ve been looking into services like Uber and AirBnB on my own recently, and this article is one of the most thoughtful I’ve seen. Thanks.

    Posted January 1, 2013 at 5:31 pm | Permalink

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