Its early adopters swear by the SF-based car-service app. But as Uber expands internationally, local cabbies in Milan and Paris are fighting back. Will rickshaw drivers in Bangalore be next?
PARIS — Asphalt turf wars that began in California are now spreading to cities around the world as ride-sharing apps, mostly notably Uber, face off with old-school license-wielding taxi drivers.
From San Francisco and Los Angeles to Milan and Bangalore, Uber's revolutionary new economic model allows you to virtually hail and pay for private-car service on your smartphone. It costs a little more, but users love the convenience – and a little extra touch of luxury.
Used @uber for first time last night (up until last week I was one of the last blackberry holdouts) and, well, it's kinda magical.
— Shadi Hamid (@shadihamid) January 29, 2014
But many, especially traditional taxi drivers, have criticized the formula as skirting longstanding city regulations. After cease-and-desist letters sent by the Los Angeles Department of Transportation, and allegations of the company stealing the drivers’ tips, the most recent controversy comes after the death of 6-year-old Sofia Liu on New Year’s Eve in San Francisco as she was on a crosswalk with her family. The wrongful death lawsuit claims the driver was on Uber’s app at the time of the accident, while Uber says they aren’t responsible and the driver was not carrying an Uber passenger at the time of the accident.
The company says it merely takes a fee for putting drivers and passengers together. And it's a model they want to replicate around the world. Here's how Uber-ing looks in Zurich, Switzerland.
The company operates in 26 countries worldwide, with a presence in more than 60 cities. Uber says its target is to open in two cities a week: This week it’s Honolulu and Lyon, France.
But as the company goes ever more global, they are running into an array of local regulations, disgruntled customers – and most of all, hostile cabbies.
In December in France a "15-minute law" was enacted — giving regular taxis a 15-minute head start against all private companies.
But the backlash against these kinds of companies continues. Taxi drivers took to the streets of Paris on January 13 to protest these urban transportation services, including Uber. The day took an ugly turn when protesters attacked an Uber car with two passengers near Charles de Gaulle airport. A window was smashed, the car hood was damaged and a tire was slashed.
Eventbrite co-founder and CTO Renaud Visage, and Five by Five co-founder Kat Borlongan were the two passengers, who tweeted after the incident:
Attackers tried to get in the car but our brave @uber driver maneuvered us to safety, changed the tire on the freeway and got us home.
— Kat Borlongan (@KatBorlongan) January 13, 2014
— Renaud Visage (@renaudvisage) January 13, 2014
"Attacked by Parisian taxis this morning in our @Uber: stones thrown, back window broken, slashed tire, spitting."
Uber released a statement condemning the attack: "That the taxis chose to use violence today is unacceptable, that they chose to strike is their business. However, Parisians also have a choice when it comes to moving around in their cities, and today's incident will certainly not tempt Parisians into choosing a taxi for their next ride. Safety, reliability and choice, not violence, are what continues to draw customers towards private hire vehicles."
By Uber_Paris via Instagram
The company later confirmed that more than a dozen incidents had occurred in Paris and the city of Lyon, where a soft launch of the service is underway.
French cab drivers pay enormous sums for their permits and now feel that their livelihoods are being threatened by these new car services. But customers are increasingly speaking with their e-wallets, especially in cities where it can be hard to find cabs.
Strikes over supremacy
Last week in Milan taxi drivers began protesting in a strike unaffiliated with the major unions. The drivers blocked roads for 14 hours, disrupting Linate Airport and the central train station, citing Uber, accusing the company of “unfair advantage.”
“Uber came onto the market without respecting the rules, becoming a real radio taxi but without playing by our rules and our limitations,” said Claudio Severgnini, head of Milan’s Taxi Tam company. Although his company did not take part in this unplanned strike, he certainly understands where the rage is coming from.
According to La Stampa, the drivers are up in arms that that San-Francisco-based Uber pays its European taxes in the Netherlands, and its drivers aren’t local Milanese — “they’re outsiders, coming from Puglia.”
I tassisti di Milano sono in sciopero contro una app (Uber). Ce la faremo a diventare un paese normale? pic.twitter.com/jhisoDevwi
— Giuseppe Di Piazza (@Giu_Di_Piazza) January 29, 2014
"Milan's taxi drivers are protesting against an app (Uber). Will we ever manage to be a normal country?"
Another strike has been called for February 20 in the city.
Meanwhile, in Asia, the company is making its first inroads in such cities as Shanghai and Bangalore, where an auto rickshaw strike on Jan. 6 saw Uber drop prices by 75% to try to win the trust of locals.
Regulations and rules
Back Stateside, Atlanta is the latest battleground. What blogs were to newspapers, says Creative Loafing website, these startups are to cabs: They are not paying the fees and are picking up fares without any oversight.
The city's entire regulatory scheme has been called into question in a lawsuit filed by a group of taxi drivers who claim it's stifled competition and helped create a monopoly. "We'll ignore the same rules," says Rick Hewatt, CEO of Atlanta Checker Cab. "Either we're going to get everyone on the same level playing field or we're going to make the decision we need to compete.”
Working the loopholes
The cost of an Uber ride is typically 20-30% higher than traditional taxi fares, but when UberX launched last August in Washington D.C., it pitted their rates in direct competition with cabs. UberX works with fuel efficient cars, such as the Toyota Prius, but regulations in the capital ban fuel-efficient cars operating as sedans so the price must be lowered, according to The Verge.
Complaints directly from customers have mostly centered around so-called "surge pricing," when on such high-traffic occasions as New Year's Eve, the rates shoot up.
— Thomas Andersen (@andersen_Th) January 1, 2014
It’s only February but it's already shaping up as an eventful 2014 for Uber. And with new startups trying to apply the same method in various cities, the competition will surely grow even tougher. And, no doubt, more global too.