# Why isn't Uber regulated as a taxi service? **URL:** \ **Category:** Factual Questions\ **Created:** [June 16, 2015, 2:25pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673 "2015-06-16T14:25:51Z")\ **Posts on this page:** 20\ **Page:** 7
**Author:** ![Broomstick](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/broomstick/32/246_2.png) [@Broomstick](https://boards.straightdope.com/u/Broomstick)\ **Post date:** [June 18, 2015, 6:26pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/121 "2015-06-18T18:26:36Z")
> [@iamthewalrus\_3](#): > > Uber doesn’t tell its drivers when and where to work, though. That’s one of their main arguments that their drivers are not employees… On the other hand, when I worked for the Census they didn’t tell me when to work and, outside a particular territory, they didn’t tell me where, either. I was, however, unequivocally an employee and not a contractor. ---
**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\ **Post date:** [June 18, 2015, 6:27pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/122 "2015-06-18T18:27:52Z")
> [@Amateur\_Barbarian](#): > > Rah, rah, rah. > > The existing system will absorb the Uber/Lyft improvements, not the other way around. Given an established system that meets the endlessly complex real world rules, that can certainly stand some upgrades, and a Completely New System that has several years of being bent to reality ahead of it… I know which way to bet. > > It’s all to the good. But the end game is still pretty clear. See you in a couple of years. 🙂 The big innovation in ridesharing is not (mainly) a regulatory arbitrage, it’s a capex play. Traditional cab companies own their own cars and have $$$ tied up in that investment. Each cab company car is utilized for cab driving full time and customized for that purpose with decals, lights, meters etc. What Sidecar pioneered (not many people remember Sidecar was the inventor of ridesharing. Lyft came a couple of weeks later and Uber didn’t even do uberX for a year after the other two) was pushing the capital costs onto the drivers. Because drivers are using their own personal cars to provide rides, ridesharing only needs to account for the marginal cost of the car, not the total capex. Each driver’s car is going to depreciate in value anyway, they might as well get some more use out of it by providing a ridesharing service. Because of the innovation in smartphone technology, you could turn a car from personal use to professional use in minutes instead of months. Uber pioneered surge pricing but what a lot of people don’t realize is that taxi companies couldn’t have done surge pricing even if they wanted to. It doesn’t make economic sense for taxi companies to keep spare cars around which only come out 10% of the time. OTOH, It totally makes sense for Uber to recruit a large pool of drivers who don’t participate in Uber 90% of the time but only turn on their Uber when the surge goes above 3x say. All of the stuff around FTE vs independent contractor and medallions and the like are important but they’re periphery to this. The real innovation is that once you have a flexible labor supply, you fix a lot of what was traditionally wrong with cabs and opens yourself up to a whole new market of people (for reference, I’ve spent maybe $1000 a year on lyft since it first started and maybe $20 a year on taxis before that). ---
**Author:** ![RobDog](https://avatars.discourse-cdn.com/v4/letter/r/f07891/32.png) [@RobDog](https://boards.straightdope.com/u/RobDog)\ **Post date:** [June 18, 2015, 6:32pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/123 "2015-06-18T18:32:15Z")
> [@Amateur\_Barbarian](#): > > …I have been in tech since before it was “tech,” and I’ve been part of or privy to some of the biggest revolutions in functional improvements to our lives… Oh come on. You can’t just drop that one here and leave it hanging. Do tell. ---
**Author:** ![Deeg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/deeg/32/2955_2.png) [@Deeg](https://boards.straightdope.com/u/Deeg)\ **Post date:** [June 18, 2015, 6:32pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/124 "2015-06-18T18:32:20Z")
> [@pulykamell](#): > > I actually do want it to be more regulated Just curious: in what additional ways would you like Uber to be regulated? Outside of current labor laws (and stuff like state emissions standards) I can’t think of any that I think are important. As someone already mentioned I think the user ratings would be a better gauge of drivers/cars than some government inspector. ---
**Author:** ![lost4life](https://avatars.discourse-cdn.com/v4/letter/l/c4cdca/32.png) [@lost4life](https://boards.straightdope.com/u/lost4life)\ **Post date:** [June 18, 2015, 6:46pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/125 "2015-06-18T18:46:34Z")
> [@Amateur\_Barbarian](#): > > …I have been in tech since before it was “tech,” and I’ve been part of or privy to some of the biggest revolutions in functional improvements to our lives… > [@RobDog](#): > > Oh come on. You can’t just drop that one here and leave it hanging. > > Do tell. Did it involve Radio Shack? ---
**Author:** ![Smapti](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smapti/32/17938_2.png) [@Smapti](https://boards.straightdope.com/u/Smapti)\ **Post date:** [June 18, 2015, 6:53pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/126 "2015-06-18T18:53:17Z")
> [@Deeg](#): > > Just curious: in what additional ways would you like Uber to be regulated? Outside of current labor laws (and stuff like state emissions standards) I can’t think of any that I think are important. As someone already mentioned I think the user ratings would be a better gauge of drivers/cars than some government inspector. Regular safety inspections of the vehicles would be one start. And background checks and commercial licensing for drivers. And wage protections for those drivers. And insurance protection for the drivers and their passengers. And fare caps to prevent the kind of gouging Uber loves to indulge in. ---
**Author:** ![Broomstick](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/broomstick/32/246_2.png) [@Broomstick](https://boards.straightdope.com/u/Broomstick)\ **Post date:** [June 18, 2015, 6:57pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/127 "2015-06-18T18:57:56Z")
I think if someone wants to drive for money they should be commercially licensed, so that’s one area I could support additional regulation. It’s one thing to drive yourself around, but strangers should have some assurance you’re a competent driver and not just lucky. There may be other ways to assure that, but I think it’s a good idea to have some standards. ---
**Author:** ![Deeg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/deeg/32/2955_2.png) [@Deeg](https://boards.straightdope.com/u/Deeg)\ **Post date:** [June 18, 2015, 7:11pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/128 "2015-06-18T19:11:21Z")
> [@Smapti](#): > > Regular safety inspections of the vehicles would be one start. > And wage protections for those drivers. > And insurance protection for the drivers and their passengers. AFAIK we already have those. I can be convinced that we need more if you can provide cites that commercial vehicles are more dangerous than private ones. > [@Smapti](#): > > And background checks and commercial licensing for drivers. This one make the most sense to me but I still believe that the driver ratings will be a better gauge than a commercial license. If a driver gets a few bad ratings due to erratic driving they’re toast. As above my opinion can be changed if there is evidence that Uber drivers are a non-trivial danger. > [@Smapti](#): > > And fare caps to prevent the kind of gouging Uber loves to indulge in. I am totally against this one. As long as the prices are pre-arranged and there is viable competition then this is self-correcting. I believe Uber (and their drivers) should be allowed to charge whatever they can get people to pay. ---
**Author:** ![Smapti](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smapti/32/17938_2.png) [@Smapti](https://boards.straightdope.com/u/Smapti)\ **Post date:** [June 18, 2015, 7:15pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/129 "2015-06-18T19:15:16Z")
> [@Deeg](#): > > This one make the most sense to me but I still believe that the driver ratings will be a better gauge than a commercial license. And yet, the ubiquitousness of “How’s my driving” bumper stickers has thus far failed to eradicate the raison d’etre of the CDL. > [@](#): > > As above my opinion can be changed if there is evidence that Uber drivers are a non-trivial danger. _All_ motorists are a non-trivial danger. A motorist who is professionally responsible for the safety of a passenger even more so. ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [June 18, 2015, 7:23pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/130 "2015-06-18T19:23:11Z")
> [@Deeg](#): > > Just curious: in what additional ways would you like Uber to be regulated? Outside of current labor laws (and stuff like state emissions standards) I can’t think of any that I think are important. As someone already mentioned I think the user ratings would be a better gauge of drivers/cars than some government inspector. I would want some sort of regulatory agency to ensure that drivers are properly and sufficiently insured and that there is some sort of background screening and basic training and vehicle safety inspections. If those are already taken care of, then I’m fine. I have no problem with surge pricing or anything like that myself, as long as it’s provided up-front. If I feel the price isn’t worth it, then maybe I’ll call Lyft or a taxi. ---
**Author:** ![spinky](https://avatars.discourse-cdn.com/v4/letter/s/59ef9b/32.png) [@spinky](https://boards.straightdope.com/u/spinky)\ **Post date:** [June 18, 2015, 8:27pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/131 "2015-06-18T20:27:00Z")
> [@Shalmanese](#): > > The big innovation in ridesharing is not (mainly) a regulatory arbitrage, it’s a capex play. Traditional cab companies own their own cars and have $$$ tied up in that investment. Each cab company car is utilized for cab driving full time and customized for that purpose with decals, lights, meters etc. > > What Sidecar pioneered (not many people remember Sidecar was the inventor of ridesharing. Lyft came a couple of weeks later and Uber didn’t even do uberX for a year after the other two) was pushing the capital costs onto the drivers. Because drivers are using their own personal cars to provide rides, ridesharing only needs to account for the marginal cost of the car, not the total capex. Each driver’s car is going to depreciate in value anyway, they might as well get some more use out of it by providing a ridesharing service. Because of the innovation in smartphone technology, you could turn a car from personal use to professional use in minutes instead of months. > > Uber pioneered surge pricing but what a lot of people don’t realize is that taxi companies couldn’t have done surge pricing even if they wanted to. It doesn’t make economic sense for taxi companies to keep spare cars around which only come out 10% of the time. OTOH, It totally makes sense for Uber to recruit a large pool of drivers who don’t participate in Uber 90% of the time but only turn on their Uber when the surge goes above 3x say. > > All of the stuff around FTE vs independent contractor and medallions and the like are important but they’re periphery to this. The real innovation is that once you have a flexible labor supply, you fix a lot of what was traditionally wrong with cabs and opens yourself up to a whole new market of people (for reference, I’ve spent maybe $1000 a year on lyft since it first started and maybe $20 a year on taxis before that). This is a very insightful post. Anybody who thinks the point of Uber is dispatching via smartphone and thumbing your nose at regulations should reread this post a few times. Taxis will certainly need to implement smartphone dispatch, and that will provide a marked improvement in their service, but they’re still going to have a very difficult time competing with the scale of an operation like Uber unless they also go with the model where drivers can do pick-up work whenever they want and use their own cars. If I called a taxi company right now it would probably take 30 minutes to get me a car, because there simply aren’t cabs blanketing my town. I just opened the uber app and there are 4 available cars within a 6 block radius of me. The massive discrepancy in the fleet size is the key, and you don’t get that _just_ by dispatching via smartphone. The smartphone dispatching _is_ important for it, but that’s only because that’s what enables you to turn an idle person with a passenger car into a taxi on demand. This advantage will get smaller if they have to treat the drivers as employees and/or adhere to more taxi regulations, but it will still be there. ---
**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\ **Post date:** [June 18, 2015, 8:33pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/132 "2015-06-18T20:33:28Z")
> [@Smapti](#): > > And yet, the ubiquitousness of “How’s my driving” bumper stickers has thus far failed to eradicate the raison d’etre of the CDL. > > _All_ motorists are a non-trivial danger. A motorist who is professionally responsible for the safety of a passenger even more so. Uber could disrupt commercial licensing & driver safety in an even more profound way. The combination package of GPS, accelerometer & microphone in a smartphone is a powerful, real time sensor platform that can be fed directly into Uber data centers. Based on the size of Uber’s platform, they could use the comparatively rare occurrence of accidents to build predictive models that assess whether someone is a safe driver or not based on signals such as the suddenness of braking, whether they hesitate at traffic lights and 1000x other variables. Drivers that drive intrinsically unsafely and can’t be trained better can be booted off the platform before they cause an accident not after. Thus, Uber could provide an even safer platform for driving than taxis, all absent any govt regulation. They could even sell this data back to insurance carriers to negotiate lower residential rates for their drivers which would offset the cost of additional commercial insurance. Disclaimer: I know people at both Uber and Lyft and I’ve talked to them about their business in general terms but we’ve never discussed this particular issue and I have no insider knowledge of if Uber is pursuing this (although I would be utterly surprised if they were not). You have to realize the scale and scope of Uber’s ambitions here and the reason they’re valued as a $40Bn company is not because they simply want to replace cabs. ---
**Author:** ![Kent\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kent_clark/32/105_2.png) [@Kent\_Clark](https://boards.straightdope.com/u/Kent_Clark)\ **Post date:** [June 18, 2015, 8:34pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/133 "2015-06-18T20:34:11Z")
> [@iamthewalrus\_3](#): > > Looks like your 1/3 figure is out of date. It’s 1/4 as of February. And by the end of the year, it’ll be about 1/6. [cite](http://marketingland.com/report-us-smartphone-penetration-now-75-percent-117746). This is really a non-issue. You’re right that it’s a non-issue. I can order a traditional cab [with my smartphone](http://countycab.com/taxi-app)right now. So now that I can order a cab with a smartphone, what’s the next argument for Uber? ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [June 18, 2015, 8:49pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/134 "2015-06-18T20:49:25Z")
Are you suggesting that because it’s possible to summon a cab in some cities using a smartphone app, there’s no reason for Uber to exist? Should then Pepsi-Cola close its doors because Coca-Cola is already available? ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [June 18, 2015, 8:55pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/135 "2015-06-18T20:55:13Z")
> [@Shalmanese](#): > > …the reason they’re valued as a $40Bn company is not because they simply want to replace cabs. You’re right. It’s because investors are awful at valuing tech stocks. That’s [40 times annual revenue](http://blogs.wsj.com/digits/2015/02/18/uber-expands-funding-round-as-revenue-growth-accelerates/). It’s ridiculous. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [June 18, 2015, 9:12pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/136 "2015-06-18T21:12:37Z")
> [@Really\_Not\_All\_That\_Bright](#): > > You’re right. It’s because investors are awful at valuing tech stocks. That’s [40 times annual revenue](http://blogs.wsj.com/digits/2015/02/18/uber-expands-funding-round-as-revenue-growth-accelerates/). It’s ridiculous. Not at all- if you buy low then dump it before the bottom falls out- which they all assume they can do. They are almost always wrong, however. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [June 18, 2015, 9:13pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/137 "2015-06-18T21:13:28Z")
> [@Broomstick](#): > > On the other hand, when I worked for the Census they didn’t tell me when to work and, outside a particular territory, they didn’t tell me where, either. I was, however, unequivocally an employee and not a contractor. Ah, but _could_ they have hired a contractor with your duties? If my employer told me I could work whenever and however I wanted, I wouldn’t magically become a contractor. Because we signed an agreement that says I’m an employee. Just as I assume you did when you worked for the Census. The question is not whether you’re an employee if you have an agreement that says you’re an employee. The question is whether the state will decree that you’re an employee in the absence of such an agreement. In the case of Uber, at least one court says yes. But I wonder how settled the issue is, since many traditionally “contractor” jobs have a lot in common with Uber drivers. ---
**Author:** ![TSBG](https://avatars.discourse-cdn.com/v4/letter/t/77aa72/32.png) [@TSBG](https://boards.straightdope.com/u/TSBG)\ **Post date:** [June 18, 2015, 9:16pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/138 "2015-06-18T21:16:12Z")
Courtesy of the taxi industry, here’s a list of alleged assaults and other misbehavior by ride-share drivers: [NameBright - Coming Soon](http://www.whosdrivingyou.org/about) This item says there is no way to track assaults by taxi drivers: [Are Taxis Safer Than Uber? - The Atlantic](http://www.theatlantic.com/technology/archive/2015/03/are-taxis-safer-than-uber/386207/) ---
**Author:** ![PastTense](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pasttense/32/14550_2.png) [@PastTense](https://boards.straightdope.com/u/PastTense)\ **Post date:** [June 18, 2015, 9:19pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/139 "2015-06-18T21:19:47Z")
> [@Deeg](#): > > I assume that the Uber model could still work even if they ultimately lose the appeal and must treat the drivers as employees. I would think it just means that Uber takes a larger cut of the payment to offset the costs. It works for some things but not others. Let’s look at minimum wage and time and a half for overtime. Suppose Deeg you were spending most of your time doing important stuff like browsing Straight Dope but every couple hours answered a Uber call. Wouldn’t the new requirements mandate you get paid at least the minimum wage plus time and a half for overtime for all this time you were monitoring the app–even though you were actually making very few trips (I am referring to the situation where there are very few people wanting to take Uber trips–you live in a remote rural area or it is 3 am to 5 am…)? ---
**Author:** ![Whack-a-Mole](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/whack-a-mole/32/141_2.png) [@Whack-a-Mole](https://boards.straightdope.com/u/Whack-a-Mole)\ **Post date:** [June 18, 2015, 9:29pm UTC](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673/140 "2015-06-18T21:29:41Z")
> [@Diceman](#): > > That might not be the biggest concern in the US, but in many parts of the world, stepping into an unlicensed taxi can be a Darwin Award-level of foolishness, especially if you’re obviously a foreigner. Certainly in some foreign countries this would be a real risk but that is not an issue with Uber. Uber charges a $1 fee on all rides as a “Safe Rides Fee” which, they claim, they use to ensure your driver is not a psycho. I am not sure how good their screening really is but then I don’t see why a taxi is any better. I’ve had a lot of dodgy cab drivers in the past. If it is about how well they drive I can say that my personal experience is Uber drivers are FAR safer drivers than taxi drivers (in Chicago and New York at least). Presumably since the Uber car is owned by the driver they want to be careful with it. Taxis are often crappy as hell and the ride can actually be frightening sometimes. Not their car so they (often) drive like maniacs. As for knowledge of where to go taxi drivers can be just as lost as an Uber driver. Nice thing about Uber though is I can input the destination on my phone and it instantly transmits that info to the driver’s phone and maps a route for him/her. For taxis I frequently have to tell them where to turn the whole way. London Black Cabs they are not. [Previous page](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673.md?page=6) [Next page](https://boards.straightdope.com/t/why-isnt-uber-regulated-as-a-taxi-service/722673.md?page=8)