Junk Explained: What’s The Problem With UberX?
The issue here isn’t really one of public safety. It’s one of fear: fear of job loss, fear of competition, fear of the unknown. But is it justified?
After a few weeks of confusion around the legitimacy of Uber’s new ‘Low Cost’ service, the NSW Government finally got its ducks in a row yesterday, and declared the “ride-sharing” service illegal under state law.
Currently operating as UberX in many American states, Uber has been trialing the new addition to its regular ‘Taxi’ and ‘Black Car’ services in Sydney and Melbourne over the last few weeks. The new offering allows any licensed driver over 24 — with their own car (must be four-door, and 2005 or newer), comprehensive insurance, and no criminal record — to drive other people around for a fraction of the price of a normal taxi. Sounds pretty legit, right? Well, no.
As soon as Uber ‘Low Cost’ entered the NSW market, the NSW Taxi Council began lobbying against it, claiming the service has “no regulatory checks or balances” and could pose risks to passenger safety. Of course, there’s another motive behind their complaints: Uber ‘Low Cost’ — or UberX — poses a significant threat to the near-monopoly of Premier and Cabcharge, who control about 80% of the cabs on Sydney streets.
So What Exactly Happened Yesterday?
In a huge blow for the car-owning out-of-work actors in NSW, the state’s Transport authority released a statement yesterday clarifying that “if a NSW driver is taking paying members of the public as passengers, the driver and the vehicle must operate in accordance with the Passenger Transport Act.” According to said Act, anyone charging for lifts must be accredited and authorised by Roads and Maritime Services, and must conduct their business in a licensed taxi or hire car. Anyone choosing to defy these rules could be fined a hefty fee of $110,000.
Thankfully, all hope for cheap, unmonitored transport is not lost. The Victorian government is still open to the idea, and Uber Sydney yesterday announce they would continue to offer the service, defying the NSW Government by releasing and rebranding the service as UberX to all users overnight. Uber Sydney’s General Manager David Rohrsheim vowed to stand by any of their drivers should they be fined, and then this morning, UberX began offering free rides to anyone travelling during lock-out time from Sydney’s Kings Cross.
Changeover to uberX. Free rides during lockouts from Kings Cross on @Uber_Sydney. See http://t.co/O4ejs6n9ST
— Uber Sydney (@Uber_Sydney) April 30, 2014
“Ride-sharing is an innovative new concept that is finding rapid adoption around the world,” Rohrsheim told the Australian Financial Review yesterday. “The NSW Passenger Transport Act — which was written in 1990 – couldn’t possibly have taken into account ubiquitous use of mobile phones, let alone smartphone apps.”
If I can catch an UberX to my local Marijuana dispensary in California for the fraction of the cost of a normal cab, why can’t I do it in Australia?
According to both the government and the taxi industry, the problem is safety.
CEO of the NSW Taxi Council, Roy Wakelin-King, came out swinging last week, declaring that “UberX has none of these regulatory measures in place, and this therefore poses an unacceptable risk to the public. UberX has already attracted concern amongst transport regulators in some parts of the US and Europe, and action has been taken to protect the public as a consequence.”
This sentiment was backed up by Transport for NSW in yesterday’s statement, when they pointed out that the Passenger Transport Act “requires drivers to be fit and proper persons and vehicles to comply with specific standards to ensure an appropriate standard of safety for customers.”
But standards are one thing; whether or not they’re being met is another. As anyone who has ever caught a taxi will know, our legitimate taxi system is far from a perfect — at times, it’s even far from safe. Take, for example, the time that my driver fell asleep not once, but twice at the wheel (yes I got out the second time). Or the other time, when I ended up getting a free lift home with the cops after my cabbie, who’d been pulled over for not having his headlights on, turned out to also not have a license. There’s research to back my experience, too: Last month, an ABC investigation found that many Sydney taxis are being falsely cleared as roadworthy, citing criticism from the NRMA who were also unsatisfied that spot checks on taxis don’t cover minor things like BRAKES.
What about insurance, I hear you ask? Well, just like regular taxis, UberX in Sydney does have insurance in the event of an accident with a passenger on-board. In response to Wakelin-King’s attack last week, Uber’s Sydney GM Rohrsheim clarified that UberX drivers are covered. “Each partner-driver is required to have personal vehicle insurance, which is supplemented by Uber’s contingent excess liability policy that provides up to $5 million of coverage per incident.”
There is also the issue of driver conduct. Critics of Uber will understandably point to this story from Daily Beast journalist Olivia Nuzzi, who was harassed by an Uber driver in New York last year. Not only was this totally unacceptable, but her story also uncovered Uber’s questionable privacy standards, which allowed the offending driver to obtain her full name and other personal information. While this is clearly a strike against Uber’s name, it doesn’t mitigate the fact that customers of normal taxis are also vulnerable to danger. Basically, every time you get in car with someone you don’t know, no police check, road-safety test, GPS tracking, security camera or faded ID badge can keep you safe. It’s always going to be a risk.
Is UberX a risk that we’re prepared to take?
Probably, yes. There’s little doubt that if the Government let us, Australians would happily throw their credit cards at Uber in return for a low-cost ride. Because, let’s be honest, it’s cheap, internally regulated (just not to Government’s arguably outdated standards), and probably no more risky than the taxi driver you had last Saturday night. The issue here isn’t really public safety. It’s fear: fear of job loss, fear of competition, fear of the unknown.
Just as we’ve seen here in Australia with Uber, concerns over public safety have recently become the thin veil that governments all over the world are using to control the growth of what’s been coined the “sharing economy”. Also known as “collaborative consumption” (among other things), the “sharing economy” — which is defined by platforms like Uber and Airbnb — is all about everyday people selling or lending their time, homes or services directly to other everyday people, via the Internet.
As an opinion piece published last week in The Economist pointed out, “The truth is that most of the rules that the sharing economy is breaking have little to do with protecting the public. The opposition to Lyft and Uber is coming not from customers but from taxi companies, who understand that GPS makes detailed knowledge of the streets redundant and fear cheaper competition.”
This would appear to be the case in here in Australia too. A 2012 inquiry into the Victorian taxi industry drew unwanted attention to the close relationship between the taxi industry and the government, with critics accusing the government of not wanting to “break the links between their political parties and the networks.” And while the link appears to remain strong in NSW, Uber’s Sydney GM David Rohrsheim is hoping this will change. “We’re confident that in the long run, rather than continue to shield entrenched taxi interests from new competition, Transport NSW will stand up for consumers and drivers.”
Of course, Uber is a business. They aren’t out there to fight for our right to cheap transport and flexible working hours, they are threatening an established industry, and their drivers won’t have the protection of unions. On the other hand, commercially-minded innovation can mean good things for consumers. The key is ensuring they are regulated to protect the consumers they are here to serve, and the people who serve them.
On seeing the “sharing economy” as a solution, not a problem
Thanks to the rapid growth of the sharing economy, many services have moved so fast that governments and regulatory bodies are only now just catching up. Look at New York for example, where the Attorney General Eric Schneiderman is currently on a war-path, accusing Airbnb — which has been operating pretty much untouched since 2008 — of illegally subletting, and slamming Uber for surge pricing, whereby the app “scales its pricing based on demand for drivers — they busier it is, the more the customer will pay.”
There’s no denying the “sharing economy” has its flaws. In this great piece of gonzo journalism for Fast Company, Sarah Kessler spent a month relying solely on the “sharing economy” to make money. What she uncovered was a bleak insight into the lack of rights, income and safety these services offer to workers. But the reality is that these issues are of little concern to the majority of people out there who will continue to be attracted to both the flexibly the sharing economy offers workers, and the cheap prices it offers consumers.
TL;DR? Basically, “the sharing economy” is here to stay. Therefore it’s in everyone’s best interest that Governments are open to updating or introducing legislation in order to find ways to make it work, not use old laws to shut it down because it’s new or different or challenges a business that doesn’t want to be challenged.
This point was outlined perfectly by Slate writer Zachary Karabell last week: “If new companies are simply creating models that provide more access to rides, more ease of facilitating travel and tourism, more ways of buying cars — all of which indisputably boost local economies — then our regulatory and legal system should embrace them, not impede them.”
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Melanie Mahony has written for inthemix, FasterLouder and Crikey. She never tweets at @melmahony