Nearly every global citizen today has heard of Uber—the company's name itself is now a cornerstone buzzword for disruptive technology. However, like any newcomer, Uber has taken a lot of heat, particularly from city governments—some banning Uber altogether, seemingly neglecting to hear out the seven-year-old startup valued at over $50 billion.
Uber’s strategy in dealing with city governments has been to enter a city before regulation exists. Uber then builds a loyal customer and driver base, later leveraging the support during aggressive negotiations once legislation is proposed. (To learn more, read: The Story of Uber.)
1. New York City
New York Mayor Bill de Blasio suffered a loss of face after Uber defeated his proposed legislation to limit the growth of on-demand taxi startups, a bill targeted directly at Uber. In response to the new rule, Uber waged a public battle against de Blasio, focusing on its service to minority groups and non-Manhattan borough residents who rely heavily on Uber, rather than traditional taxis. Uber tactfully stressed the fact that the platform helps New York City get closer to full employment. The company has succeeded massively in New York, generating hundreds of millions in revenue within the city. In the political game, Uber received support from industry-friendly Andrew Cuomo, the governor of New York.
Austin recently delivered a blow to ride-sharing company Uber and competitor Lyft. The City of Austin refused to compromise on safety standards even after Uber threatened to leave the city and formed a strong coalition with Lyft. The Ridesharing Works for Austin, created by the sharing economy platforms in response to the ordinance, collected an impressive 65,000 signatures. Yet, Austin did not back down, instead passing the ordinance which dictates new requirements for all drivers, including mandatory fingerprinting, vehicle inspections and in-depth background checks. After Uber and Lyft spent more than $8.6 million to support the failed Proposition 1, which would have repealed the ordinance, they are expected to leave the city of Austin.
Uber faces a challenge in the form of a bill passed in the Massachusetts House that would require all Uber drivers to be certified and approved of by state authorities. Chris Taylor, General Manager of Uber’s Boston office, told Boston.com that the company would prefer to send the state drivers' information instead of asking drivers to interact directly with the state. Uber argues that the rule would create an inefficiency due to a communication lag, keeping drivers off the road. State senators led by Sen. Jamie Eldridge are currently in the process of drafting an alternative bill, promising to be more agreeable to Uber moving forward.
At one of the world’s busiest airports, ride-sharing pickups are prohibited, yet the law is loosely enforced. In response, the Atlanta City Council transportation committee has put forward a proposal to regulate Uber and Lyft pick-ups from the Hartsfield-Jackson International Airport. Both companies have said they will not tolerate the legislation as it requires the fingerprint-based background checks they are fighting elsewhere. The company argues that the background checks are discriminatory because they may not be up-to-date with records and may include crimes that did not lead to a conviction. Furthermore, Uber assures the city that its own safety features are comprehensive, including driver ratings, a no-cash system, tracking features and trip detail sharing capabilities. Uber has said in a statement that it will be “impossible to operate” with the new rules which will go into effect on July 1, 2016, if approved. (For related reading, see: Will Uber Replace Airport Taxis?)
In the city of Portland, Uber boasts a thriving business, offering citizens an opportunity for flexible earnings and a safer, convenience way to hail a cab, The Portland City Council passed a bill in April 2015 allowing Uber to operate legally in Portland on a temporary basis. The legislation solidified Uber’s standing with the new rules passed in December, which give Uber leeway in regards to insurance coverage as reported by OregonLive.
One example of a city that Uber found too bothersome to deal with is the city of Eugene, Oregon. After launching in September of 2015 in Eugene, the city quickly targeted Uber, fining the platform more than $146,000. The city sued Uber for neglecting to meet “minimum safety requirements.” Uber refused to comply with the strict policies Eugene had in mind, instead leaving Eugene less than just seven short months after arrival. “We understand that change will be slower to come to Eugene, but we are hopeful that one day the Eugene City Council and Mayor will get there so that ridesharing can be a permanent part of the fabric of Eugene,” Uber announced in its departure statement. Perhaps Uber can expect the same type of comeback they pulled off in San Antonio, Texas, where the ride-sharing platform stormed out of the city and returned stronger than ever about six months later.
The Bottom Line
For Uber, the world’s largest tech unicorn, there’s never a dull moment. In the future, we may see more dialogue between the on-demand transportation platform and its drivers, than the typical Uber vs. the city government battle. (To learn more, read: Uber's Ultimate Battle: Are they an App or Employer?) Just this week, Uber offered union representation to New York City drivers for the first time. The five-year agreement will join the newly formed union to the International Association of Machinists. The new Independent Drivers’ Guild will represent NYC’s 35,000 plus Uber drivers. With happier Uber drivers and clearer policies in place, it will be more difficult for city governments to discredit the platform.