Guest Post: Concerning Uber Concern

The following is a response from Alex Maffeo to New York Deputy Mayor Anthony Shorris’s e-mail to all those who signed a petition in support of Uber in New York City.  Alex is a venture and growth capital investor in NYC. You can follow him on twitter here.  Deputy Mayor Shoriss’s original e-mail is in black, Mr. Maffeo’s responses are in red.

Hi Tony,

Although I imagine this is a canned response for anyone who signed Uber’s petition, I will take this opportunity to respond to each of your points. My responses are in red below:

“Rest assured, despite the overheated rhetoric – Uber is welcome in New York City. There are – and there will be going forward – more for-hire cars and drivers on our roads than ever before.” – …until you decide that there are too many.

“The reality is that today in New York City, Uber – a $40 billion corporation – is spending millions on a misleading political campaign to convince New Yorkers that it doesn’t need more oversight from the City.” – This is rhetoric. The “big bad evil company” is bullying New York City – and its meager little taxi service. Let’s be reasonable here – nobody is bullying New York City and the taxi industry is far from a defenseless little child. Uber isn’t exactly Exxon Mobil either. It was founded a mere six years ago and has since grown at a staggering rate. The reason for this is because consumers (your constituents) were starving for a better service than the ones being offered historically. Uber should be commended for battling NYC and several other major cities around the world – dragging them into the 21st century despite archaic regulations and rampant pandering to lobbyists.

It’s also no secret that taxi medallions are hoarded by a small group of opaque private corporations that hold an oligopoly over the livery system in NYC. With about 13,000 medallions in circulation today valued at approximately $700,000 apiece, we could argue that this NYC taxi mafia is a $9 billion+ Goliath in its own right. I believe they donated a nice chunk of that to Mr. de Blasio’s campaign recently, no?

I won’t even get into the political weight of the taxi driver unions who have somehow found common ground with their medallion owner overlords that they so frequently have accused of being abusive in the past.

“Meanwhile, there are serious questions about how Uber treats its customers, its workers, and whether it is flooding New York City’s already heavily-crowded streets with thousands of more vehicles.”

Re: customers – Go find any individual who has ever ridden in both a NYC taxi and an Uber and ask them which they prefer. I assure you that it will be unanimous – Uber is far superior in both the level of service they provide and the quality of treatment of their passengers. Go out and try to hail at taxi at 5:00 PM today. Maybe next time it rains. How about you ask a taxi driver to take you to the Bronx. Oh and fares are consistently cheaper – despite surge pricing.

Re: workers – Are we referring to the 1099 argument here? Because California got this one wrong. Feel free to follow them over that cliff if you want though. Uber drivers are leveraging Uber’s technology platform and user network in order to offer their services to the general population. They do not work for Uber – if anything, they are licensing their technology and their brand and agreeing not to abuse either.

Any registered Uber driver only needs to book ONE fare every MONTH in order to maintain active status. They can turn the app on/off whenever they feel like it. They can maintain a full-time job elsewhere with no problem. Does that sound like an employee to you? Would Mr. de Blasio be understanding if you only showed up to work once a month?

I recently activated an Uber driver account and also maintain a full-time job, so I’ll let you know if Uber abuses me during the course of my voluntary & periodic participation on their platform.

“New Yorkers deserve a real examination of whether Uber drivers are treated fairly; whether customers are protected against discrimination; whether Uber and other for-hire services will provide accessibility for the disabled, which they don’t do reliably today; and whether New York City streets will become even more clogged as tens of thousands of more vehicles enter the market.” – I already covered the driver employment status , but I will add that the drivers are held accountable directly by their passengers through a simple 1-5 star rating system. If you provide terrible service, there should be consequences. If you do this often enough, you should get fired. Period. That is what’s fair. The same will happen to you if you continue to ignore your constituents in favor of bowing to the medallion lobbyists and taxi unionists. Uber has every right to deny access to its technology and its brand to drivers who abuse it.

Uber is also the anti-discrimination alternative to the taxi system. Uber drivers do not see who is hailing them. They can’t decide whether to accept or reject a fare based on race, gender, etc. It has been well-documented that this discrimination is an issue that many groups face with the NYC taxi system every day.

It’s also well-documented that Uber drivers are willing to take passengers to neighborhoods where NYC taxi drivers regularly refuse to go. This can range from affluent neighborhoods like Park Slope to lower income ones like Hunt’s Point – it doesn’t really matter why. Either it’s blatant discrimination or just terrible service.

As for handicap accessibility, we finally agree on something. While it’s unreasonable to expect the entirety of Uber’s service to be handicap accessible (much like the entirety of the NYC taxi system is not), I’m sure there is some sort of agreement NYC and Uber could come to in order to resolve this issue. However, the issue is hardly significant enough to warrant this reaction from the city. Remember, it took NYC until 2013 to start rolling out any changes for disabled passengers.

“The City has a responsibility to keep people safe, to ensure workers and customers are treated fairly, to keep our streets moving, and to keep our economy competitive. That is why the City is supporting a temporary growth limit on new for-hire vehicles added to our streets, including those operated by Uber, while it can study their real impact over a short period of time.” – I believe the simple concept of supply/demand applies here. Assuming the demand for taxis/Ubers remains the same, the supply of cars that provide these services should level out when it reaches optimal levels. Meaning drivers (who, once again, are not full-time employees and therefore not obligated to be on the road) will cease to take fares if it is no longer economical for them.

The number of medallions in circulation in NYC was set in 1937 and has increased only slowly and incrementally over the years – despite exponential growth in the city’s population and economy. Supply/demand applies here too. The city’s government has allowed medallion owners to hoard the supply and increase the value of their assets. This has served nobody other than the medallion owners.

“Contrary to the misinformation out there, no one is banning Uber or ending it as you know it. The service you use today will continue to be there tomorrow, the day after, and in the months ahead. We want passengers to continue to have access to the ever-improving service that companies like Uber are helping to provide.” – The people want the service to continue to improve. It can’t do that if bureaucrats are stepping in to stifle its growth.

“But no company, no matter how big it is or how much it spends on ads, has a blank check to skirt vital protections and oversight for New Yorkers. Protecting New Yorkers’ health and safety remains our first priority, and the City’s responsibility is to establish basic rules to do exactly that.” – Again with the rhetoric. Absolutely nobody believes that this is a fight to protect consumers. Nobody.

And all companies have to play by them. – Thanks for the time.

Best Regards,
Alex Maffeo

Follow Alex Maffeo on Twitter

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Joseph Colangelo is Executive Director of Consumers' Research, the nation's oldest consumer-focused organization. Joseph grew up in Northern New Jersey and attended U.C. Berkeley on a Naval ROTC scholarship where he graduated with a Bachelor’s of Arts with a concentration in Political Science.

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