Uber

How Uber Wins

And how Uber winning can be a win for almost everyone.

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Slate last week used public record access requests to tell a nicely detailed story of how Uber sometimes wins in their disputes with municipalities who want to restrict their ability to operate, in this case in San Antonio, Texas.

Slate thinks it's talking to an audience of Lawful Good busybodies who will be offended at quasi-civil-disobedience in the name of free operation of a business and free employment for its contractor-drivers, framing them as "tantrums," but you can look at the story as more inspirational than something to tut-tut.

Summation: 

Uber stormed out of San Antonio on April 1, shortly after its first anniversary there. Prolonged negotiations with city regulators had failed to produce the precise operating agreement that Uber was seeking, and the company was having none of it….

Uber did its usual trick of trying to gin up public furor, which often works because the public really likes being able to use Uber. After that first year of operation in good ol' San Antone, Uber was facilitating tens of thousands of rides monthly. In the end, Uber got a legal deal with San Antonio that both company and city are claiming they are happy with.

Some of the details of what they were fighting over:

San Antonio wanted Uber drivers to submit to fingerprinting and random drug tests. Uber felt those requirements were too burdensome and would deter people from signing up to drive on the platform. San Antonio had already made concessions on several other issues—agreeing to most of what Uber laid out on insurance policies and driver permitting—but on fingerprinting and drug testing, local officials were unwilling to budge. The two parties were also haggling over money. San Antonio had originally penciled in a fee structure similar to the ones for taxi and limousine services: $15 for a driver permit, $15 to renew a driver permit, $28 for reinspection, and so on. Uber felt strongly that its drivers shouldn't have to pay fees.

Slate mockingly writes: "Uber, in the spirit of collaboration we've come to expect from the company, got just about everything it wanted…steamrolling local governments, play[ing] its brash brand of politics—in this case, privately working with San Antonio legislators and regulators on a compromise while publicly blasting the threat of regulation."

Seems Uber communicated the seriousness of its intentions to city council members, city managers, and lawyers, fighting to keep any possible fingerprinting and drug testing sunsetted, and to keep any records of such tests as proprietary.

Then:

In the final version of the agreement, submitted in advance of the City Council meeting, the two sides appeared to reach a compromise. On fees, Uber would pay a flat fee of $25,000, which would cover half of the city's estimated administrative costs for setting up and accommodating ride hailing. (Uber competitor Lyft, which was engaged in simultaneous negotiations with San Antonio on many of the same points, would pay the other half.) The city struck pre-employment drug tests for drivers, a requirement of the December ordinance, from the terms in favor of randomly drug-testing 10 percent of them over the course of a year. Drivers would also be given a 14-day grace period to get fingerprinted….

Then, in the perspective of a quoted city official, they felt Uber sold them out by going public with the fact that they felt even some of those requirements wouldn't fly; in a public statement from Uber at the time, the company complained that:

 The anti-competitive provisions of the ordinance remain intact—many of them requiring drivers to spend time and money jumping through municipal hoops to achieve objectives already accomplished by the Uber platform…Even with the proposed changes, this regulatory framework remains one of the most burdensome in the nation and stymies our ability to operate in San Antonio. This is why we asked the city to repeal the entire ordinance and replace it with smart regulations similar to those adopted by nearly two dozen other jurisdictions, including Austin. Without a full repeal, we will be forced to leave town.

The City Council went ahead with its regs, and Uber went ahead with its threat to stop operating in San Antonio. Uber got 14,000 people to sign an online petition to get itself back. In the end the city caved, and the new regs passed last week:

does not require drug testing for drivers, nor does it say anything about fingerprinting. (….the parties reached a sort-of compromise on the latter—drivers can elect to get fingerprinted, which will earn them a special certification from the San Antonio Police Department on their Uber profiles.) The agreement also doesn't include any driver-specific fees, though Uber will pay the city a prorated operating fee of $18,750 to cover those nine months. All in all, the terms look almost exactly like what Uber wanted, and very little like what San Antonio originally proposed.

Again, while the whole story is framed as if we should be ashamed at Uber for its "tantrums" and its "strong-arm[ing] local regulators and affect[ing] hysterics in cities across America," in fact it is city regulators generally in the thrall of ancient taxi interests who have the actual power to "strong-arm" citizens and drivers to get what they want. Not sure what's wrong when those bullies don't get their way.

In other Uber world news, seems Portland, another city where Uber had to fight its way in, has seen apparent entire new markets in meeting people's transportation needs open up, as total for-hire rides in a town where Uber and Lyft now legally operate and previous caps on taxis have been removed have gone up 40 percent.

I wrote a feature on the early stages of Uber and Lyft's regulatory fights across the nation in Reason's November 2014 issue.

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  1. “Uber, in the spirit of collaboration we’ve come to expect from the company, got just about everything it wanted…steamrolling local governments,

    Well, boo-fuckity-hoo, Uber. Those poor, SWAT team deploying, police power-holding waifs. What’s the zillion lb. hammer of government to do?

    1. Recruit Uber to become their muscle?

  2. Astonishing how many people would rather have state control instead of their so-called “sharing economy”.

    1. The whole ‘sharing economy’ was bound to become a big lefty ‘whoops’ because, as they discovered, while less centralized than a normal company, it’s ultimate goal is still profit.

      I knew the whole love affair with the term ‘sharing economy’ had… limited capital.

      1. Didn’t anarchosyndicalists and farmer’s co-operatives discover the same thing?

      2. Calling it a “sharing economy” was simply a way to try and defuse the absurd, insane hatred of “profit” (by anyone else, not themselves of course) of leftists/progs. Of course it wasn’t going to work, because eventually they will place you on the “evil corporation” side of the ledger. Shit, a huge part of Apple’s marketing is an attempt to defuse this. And Google. It’s stunning how wasteful it is if you think about it.

      3. I knew the whole love affair with the term ‘sharing economy’ had… limited capital.

        It was always just shallow marketing bullshit to allow the highminded a way to rationalize their participation in the muck and fray of entrepreneurial capitalism.

      4. I knew the whole love affair with the term ‘sharing economy’ had… *puts sunglasses on* limited capital.

        ftfy.

  3. If you call a cab in my town, you wait half an hour and pay $18 to go three miles.

    If you call an UberX, you wait five minutes (tops) and pay $9.

    Uber, please.

    1. You live in Austin too?

  4. You would think that, if Uber was such a corporate villain whose drivers were tatooed ex-cons high on cocaine, that San Antonio wouldn’t *want* them in their city.

    So why don’t they want Uber to leave?

    Presumably, the voting public wants to be able to ride Uber, and if regulations drive Uber out of the city, the voters will ignore the wisdom of Slate and blame the politicians, not the company.

    1. “The bitch walked out on me, and all I did was smack her around a little. Hey, baby, come back!”

      1. “Come on, baby, I promise not to hit you again – even though you totally deserved it, you little…ha ha, just kidding, I mean that I totally love you.”

      2. If by ‘bitch’ you mean the voters, and if by “I” you mean “local government”, I think you can be rest assured that the bitch will, in fact, come back. Because they can change local government! Really they can! It means well.

    2. the voters will ignore the wisdom of Slate and blame the politicians, not the company.

      I think that’s a bit of wishful thinking. When you’ve got otherwise smart people watching the crushing failure of centralized government and then lamenting free-enterprise as the cause *cough*Baltimore*cough*Detroit* I think you’re staring at a very steep, uphill battle.

      1. Then why do the politicians feel so threatened when Uber stages a walkout? By your reasoning they could simply blame Uber as a bunch of wreckers, say good riddance, and the voters will cheer their leaders for standing up to Teh Corprashions.

        1. I’ll concede it’s a good question. At least government has Slate on its side to defend it. Otherwise, who would?

        2. At least they do in America. In France, not so much.

      2. And lack of regulation resulting in Martin Shkreli gaming the system.

      3. If you listened to what the Smart People say about the Republicans you would think that they really are a bunch of small-government libertarians.

    3. All Sanantone politicians are gangstas high on cocaine. The former politicians are the tattooed ex-cons. Check out any random San Antonio newspaper if you suspect this is an instance of overstatement.

  5. You know who else tried to intimidate people and used the term “Uber” a lot?

    1. Cartman?

    2. The Dead Kennedys?

      1. -3 or 4 or 5 Kennedys

      2. -3 or 4 or 5 Kennedys

  6. On fees, Uber would pay a flat fee of $25,000, which would cover half of the city’s estimated administrative costs for setting up and accommodating ride hailing. (Uber competitor Lyft, which was engaged in simultaneous negotiations with San Antonio on many of the same points, would pay the other half.)

    It costs fifty grand to tell the cops that Uber is a legally operating company?

    1. Hey do you have any idea how hard it is to make cops understand something isn’t against the law?

  7. On fees, Uber would pay a flat fee of $25,000, which would cover half of the city’s estimated administrative costs for setting up and accommodating ride hailing. (Uber competitor Lyft, which was engaged in simultaneous negotiations with San Antonio on many of the same points, would pay the other half.)

    Um they could avoid all $50,000 of that graft “administrative costs” by just not administrating.

    1. That’s just crazy talk. How else would they pay the administrator’s salary?

      1. You misspelled Roads !

        Child-hater.

  8. Lawful Good busybodies

    Doherty, you magnificent bastard, this is why I read your books.

    Slate mockingly writes: “Uber, in the spirit of collaboration we’ve come to expect from the company, got just about everything it wanted…steamrolling local governments, play[ing] its brash brand of politics?in this case, privately working with San Antonio legislators and regulators on a compromise while publicly blasting the threat of regulation.”

    Uber just wanted to have a local conversation with San Antonio about its regulatory burdens. What’s wrong with having a conversation?

    1. Not a prog-style “conversation,” which often opens with the words “it would be really unfortunate if…”

      1. (I got your joke, I was trying to step on it with one of my own)

  9. Maybe we could get Madonna to sing “Don’t Cry For Me, San Antonio!”

  10. This is why San Antonio – and America – needs TRUMP. Because TRUMP would never had negotiated such a terrible deal – and this is a terrible deal for San Antonio. TRUMP has negotiated so many better agreements, you wouldn’t believe it. If San Antonio would let TRUMP renegotiate this deal, TRUMP could do much better.

    Because this deal is a loser and everyone knows it. TRUMP was just talking yesterday with a very influential San Antonian, who told TRUMP that this deal is a loser.

    #MAKEAMERICAGREATAGAIN

    /daily TRUMP ration
    /Trump Voice

    1. Losers use Uber. Winners have staff.

      /Straightens Trump brand tie

  11. “Lawful Good”

    Oh, that Doherty.

    I thought this was a nice touch as well: “… in the thrall of ancient [ insert oppressor of choice here ] who have the actual power….”

    May Gygax smile upon you, Brian.

    (On a much more seriousness note, I did appreciate the article)

  12. One day Uber will be a natural part of the city landscape and people will use the service never to remember the hell government and its supporter put them through to succeed.

    1. Regulations are the Glue that Holds Civilization Together, you know.

      1. Regulations are Duck tape is the Glue tape that Holds Civilization Together, you know.

    2. With Uber drivers protesting the next disruptive transportation technology?

      1. Well, there was supposedly a ‘strike’ over the weekend, but:

        “UberX drivers’ protest fizzles at S.F. headquarters”
        […]
        “A few UberX drivers protested outside the company’s Mid-Market headquarters Friday, chanting slogans such as “Uber’s greed puts drivers in need.”
        Media covering the event outnumbered the dozen or so protesters.
        […]
        Uber reiterated a previous statement that it welcomes feedback from drivers.”
        http://www.sfgate.com/business…..574743.php

        What happens if you call a strike and nobody comes?

        1. “What happens if you call a strike and nobody comes?”

          The hospital is empty when you fire Hellfire missiles into it?

        2. The “protesters” were probably just taxi cartel flunkies, anyway.

          1. Usually, I avoid any claim of ‘cleverness’, but you may well be right here.
            There’s also a local ‘community activist’ ( “Artist activist Erin McElroy maps out evictions” http://www.sfgate.com/living/a…..709308.php ) who protests new-comers paying what it costs to live in SF and seems to be a ‘director’ of, oh, every ‘Google-bus’ protest.
            I’m sure no one was evicted when she showed up, and there are no visible means of support. I’ve inquired among the local ‘investigative reporters’, none of whom care to do anything with it.
            Strangely, she’s involved in every ’cause’ which gets money from the SEIU local, so you’ll forgive my harboring certain suspicions.

        3. Uber is strike-immune. All the strikers can do is demonstrate in front of HQ (and even HQ doesn’t have to actually a physical location nowadays).

          1. Someone should tell them that Uber HQ is an oil platform 100 miles of the CA coast – even send them GPS coordinates of where they should take their next protest.

  13. “Again, while the whole story is framed as if we should be ashamed at Uber for its “tantrums” and its “strong-arm[ing] local regulators and affect[ing] hysterics in cities across America,” in fact it is city regulators generally in the thrall of ancient taxi interests who have the actual power to “strong-arm” citizens and drivers to get what they want. Not sure what’s wrong when those bullies don’t get their way.”

    This is quite similar to the claim that those who prefer to keep what they’ve earned are “selfish”, while those who will take it at gunpoint are “altruistic”.

  14. “This is quite similar to the claim that those who prefer to keep what they’ve earned are ‘selfish’, while those who will take it at gunpoint are ‘altruistic’.”

    I have used different words to make this same point, Sevo.
    It surprised me how much success I had in guiding individuals to the conclusion you have succinctly stated here.

    “I never thought of it like that” was the first reaction.

    1. Did you see my expanded thoughts on pizza the other day? I wrote it just for you and only you.

      1. Be cautious Rufus – CJ might accuse you of corresponding with yourself online again.

        In truth I missed them. Did you get any positive feedback from any of the other commentators?

        I have a couple of buddies who (in my opinion and that of others’) are above average cooks, and they, along with myself, enjoy cooking for mutual friends and/or family members. You seem to be of a similar nature in this regard, so I thought to ask your opinion, Mr. Snarky.

        1. I am.

          I like to talk food.

          1. FWIW here’s what I wrote: If Charles E. shows up here again, yeah, ham is fine. But I like when it’s cut thinly on a pizza. Some people prefer chunks – chacun sont gout. I do put it on my pizza from time to time. There’s an Italian ham called ‘prosciutto cotto’ which is nice on a pizza too. Not to mention prosciutto (any kind except culatello which really should be eaten straight up it’s so good) itself.

            If you want a really nice cold cut even to put on a pizza check this out:

            https://en.wikipedia.org/wiki/Bresaola

            1. Someone here recommended a pre-preped goulash and I promptly lost the link.
              I love the stuff when it’s done well and am willing to make (and clean up after making) the spaetzle, so I want to try this one.
              Did it come from you?

            2. Thanks for the link, Rufus.

              Bresaola is now on my “to find and obtain” list.

              I’d also be interested in the goulash recipe to which Sevo inquired, if you know anything about it.

              I’ll interrupt another thread sometime in the future to read your answer(s).

              Goodnight.

              *anticipates dreaming of eating spaetzle*

              1. I unfortunately do not know how to prepare goulash.

                Maybe it’s time I try!

                1. I misspoke.

                  I didn’t realize I’ve made that sort of dish many times; just didn’t realize it was goulash per se.

                  But it wasn’t me, Sevo.

              2. I just remembered that I have Bechtle brand Bavarian Style spaetzle in my cupboard. Approximately twenty minutes to satisfaction.

                Goodnight indeed.

                1. OK, I’ll try that.
                  Cleaning the remaining mix out of the colander is a real pain; that stuff does not dissolve in water!

    2. See? This is the mechanism whereby one individual breaking with the unanimous united social pressure front reduces its intimidating effect by a full 33% (Asch, 1955)–as in The Emperor’s New Clothes. (Andersen, 1837). This also explains why the nationalsocialists and communists were so thorough in ferreting out and murdering such dissenters not long ago, and the NSA, ISIS and Seneca Police force & Solicitor’s Office are that way today.

  15. The city struck pre-employment drug tests for drivers, a requirement of the December ordinance, from the terms in favor of randomly drug-testing 10 percent of them over the course of a year.

    Drug testing is just a racket and nothing more. I know someone who’s employer recently started drug testing after telling employees repeatedly that they wouldn’t have to do it. Well, the LAW says they have to. Anyway, they have to do the tests, but nothing has to come of it. You can test positive all day long and not even a word will be spoken about it. No firing, no suspension, no forced counseling. Nothing. I asked if they could just pay the testing company the money and save some time and trouble. Oh no, then it wouldn’t look legit.

    1. Wrong. A friend in Sanantone was barked at by one of those ethnic purity and Satanic possession tests and failed to get a job for which he was otherwise qualified. I talked him into voting the straight libertarian party ticket until such time as the spoiler votes–like citizen Uber petitions–reversed that situation.

  16. Oregonian headline proclaims the state will classify uber drivers as employees. There’s more than one way to enforce taxi protectionist laws “for the good of the consumer.” I’m guessing bye bye uber until new lobbyists bribe the powers that be.

    1. Uber and Lyft opened the door to copycat freelance scabbing through other apps and veiled online classifieds. Like nuclear weapons–statebusters utterly useless against lone individuals–PCs or good crypto, this is another genie the looters cannot cram back into the bottle and make disappear.

  17. ” In the end the city caved, and the new regs passed last week:”

    HA ha!

    I know it’s a drop in the ocean, but it’s nice to see the Leviathan take it in the nuts every now and again.

  18. Leftists will talk all day about serving the interests of the little guy, but once the little guy stands up to big government all bets are off.

  19. Uber didn’t win, government went back to it’s normal strategy. They’ll slowly boil the frog so no one realizes they’re killing it. All while extorting money from people who aren’t getting any benefit from the extortion. It’s like the Circle of Life, except it’s really the circle of parasitism. It’s been going on for many years, Uber too will succumb eventually. The parasites are implacable.

  20. Uber, in the spirit of collaboration we’ve come to expect from the company, got just about everything it wanted…steamrolling local governments, play[ing] its brash brand of politics?in this case, privately working with San Antonio legislators and regulators on a compromise while publicly blasting the threat of regulation

    In other words, heroes.

  21. In Austin, 90 miles up the road, cabbies carry all of the serious prostitution and drug trade under a don’t ask-don’t tell gentleman’s agreement with the cops. Sanantone’s versions of these trades are so much heavier that the teevee and papers routinely report gunfights with cops and politicians among the casualties of bribe and boodle divvying disagreements. Add to this the routine depredation of drivers soaked in high-tax ethanol and you have a situation even the drunkest of drivers can clearly understand. Like asset forfeiture looting, the piss-tasting and phrenology record requirements were–you can bet–suggested by the federal Drogenbek?mpfung Arbeiterpartei, eager for a slice of the action. It makes me proud to see Sanantone standing up for individual rights and freedom of choice.

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