Uber, the little on-demand car service app that could, isn't catching any breaks from local regulators in cities where it's trying to grow its business. In fact, it never has. The company's bee in high water in lots of major American cities, and now, regulators are now looking for ways to make the hire-a-car business illegal in all of the United States. Nevertheless, the startup's founder sounds resolute. "If you put yourself in the position to ask for something that is already legal, you'll find you'll never be able to roll out," Uber's Travis Kalanick told The New York Times on Sunday. "The corruption of the taxi industries will make it so you will never get to market."
This is coming from a guy whose former business venture, Scour, shut down after getting hit with $250 billion worth of copyright infringement lawsuits from media companies. Uber's alleged infractions would seem even less clear cut than the messy world of intellectual property, though. New regulations adopted by 15 cities nationwide will make it illegal for luxury car services to use GPS devices as a meter and also makes it illegal for them to pick up customers less than 30 minutes before the departure time. These go on top of various regulations in specific cities that prevent cab drivers from using electronic devices while driving and from accepting prearranged rides. If you're familiar with Uber, you'll know that these new laws will completely wreck their model.
If you're not familiar with Uber, here's a quick tutorial. You download the Uber app on your iPhone and use it to hail a cab or livery car at your current location. Uber gives the drivers an iPhone to accept the calls and collect their fare through the app before the rider even gets in. While Uber's done a number of promotional events offering free rides and discounts, the service is ultimately more expensive than a regular yellow cab ride, however marginally more convenient.
Well, for obvious reasons, the local taxi bureaucracies don't like Uber coming in changing all their rules. Uber was first banned in New York City, which has some of the toughest taxi laws in the country, and is currently facing similar lawsuits in San Francisco and Chicago. These cases are on top of a cease-and-desist letter from the Massachusetts Division of Standards -- though that ban was later reversed -- and more than a little bit of intimidation from Washington DC's taxi regulator. Uber also owes the California Public Utilities Commission a $20,000.
Some people would file Uber's growing collection of lawsuits as evidence that it should think about changing it's model. Uber thinks its must more evidence that it's tackling an industry in dire need of disruption. Daniel Sperling, director of UC-Davis's Institute of Transportation Studies, told The Times that "transportation has been one of the least innovative sectors in our society" and says that Uber's "using information and communication technology, at a very high level it's long overdue and should be embraced with open arms."
The service seems to be popular enough with consumers that Uber's willing to keep taking their chances. And they should at least take solace in the fact that they're not the only disruptive company riddled with legal troubles.