Uber: The regulator’s nightmare

 

Uber Technologies Inc. signage stands inside the company's office prior to Senator Marco Rubio, a Republican from Florida, speaking in Washington, D.C., U.S., on Monday, March 24, 2014. Rubio addressed the need to adapt antiquated government regulations to increase economic opportunities for the 21st century and outdated regulations limit consumer choice. Photographer: Andrew Harrer/Bloomberg ORG XMIT: 480784803
Uber Technologies Inc. signage stands inside the company’s office prior to Senator Marco Rubio, a Republican from Florida, speaking in Washington, D.C., U.S., on Monday, March 24, 2014. Rubio addressed the need to adapt antiquated government regulations to increase economic opportunities for the 21st century and outdated regulations limit consumer choice. Photographer: Andrew Harrer/Bloomberg ORG XMIT: 480784803

If you need confirmation of how disruptive Uber is, look no further than the daily news.

It is nothing but law suit, after law suit, after criminal complaint, after union action. Everyone hates them.

Recently, taxi owners and lenders on Tuesday sued New York City and its Taxi and Limousine Commission, saying the proliferation of the popular ride-sharing business Uber was destroying their businesses and threatening their livelihoods.

Uber was accused of violating yellow cab drivers’ exclusive right to pick up passengers on the street. This is because Uber drivers face fewer regulatory burdens in picking up millions of passengers who use smartphones to hail rides.

It is a familiar story. Singaporean taxi companies face the exact, same problem.

The rise of Uber also contributed to the bankruptcy of 22 companies run by taxi magnate Evgeny Freidman.

The lawsuit seeks compensatory and punishing damages, including for alleged violations of cab drivers’ property and equal protection rights under the U.S. Constitution.

It also seeks to ease cab drivers’ regulatory burdens, including a requirement that half of their cabs be accessible to disabled people by 2020.

In September, a state judge in Queens County dismissed a lawsuit by the credit union seeking to stop the city from supporting Uber’s expansion.

At the heart of these contravacies is the question of how the company defines its business. Uber has repeatedly reiterated its status as a technology company, stating it doesn’t own or operate vehicles or employ drivers.

All it is, is a match making service. Matching supply to demand.

But this poses a nightmare for regulators. Should it be classified as an employer then? Do you charge tax (and how do you levy it)? How do you regulate this industry and bring peace to all quarters?

Meanwhile, Uber’s popularity remains.

The app ranks highly and is amongst one of the most downloaded apps on both Google and Apple (according to Euromonitor). Drivers are attracted to the service and consumers support the disruption it brings to the market.

Singaporean regulators had best tread carefully as there are many toes in the third party taxi application game.

About the author

Tay Leong Tan

Tay Leong Tan is a collective of 3 writers. Tay, Leong and Tan. (Who were you expecting?!) We are enthusiastic about labour issues, economics and current affairs in particular.

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