So last week the B.C. Passenger Transportation Board (PTB) effectively shut down Uber in Vancouver by compelling the rides they arrange must charge a minimum $75 a trip, regardless of distance. Shortly after being announced, twitter lit up as Uber notified its customers of the decision and the hashtag #UberVanLove began directing angry (and deserved) tweets at government officials.
My thoughts on all this are evolving but I think the PTB has made a poor decision and hope that a compromise can be found.
Here’s a long piece explaining why.
Uber is different. Most people think that Uber is simply a new middleman, trying to cut out the current dispatchers (or work with them). This is not true, they are much more than that. As you can read in this Time magazine article, Uber is not just about connecting riders with drivers. For example:
Abyzov says the company has a “science team” working on dispatch algorithms to produce a predictive heat-map that helps local car companies and their drivers better anticipate rider demand. “We’re helping our partners build successful small businesses,”
So let’s be clear. This is about a learning company that is figuring out how to preposition cars in neighborhoods because it can anticipate demand. As far as I know (or have experienced) There is no taxi or town-car company in the lower-mainland that is even thinking that way. And this type of thinking has big implications. In San Francisco, it means the average wait time for an Uber car is 3 minutes.
Think about that for a second (I’m looking at you PTB).
This means that:
- Efficiency: People are getting around the city much faster – increasing their productivity. For a city trying to compete globally, this matters.
- Reliable: I’ve had taxi companies not commit to send me a car when I’m not at a fixed address because they assume I’ll hop in a roaming taxi before the one I ordered arrives. Because Uber let’s you rate the taxi, but also lets the taxi rate you, it increases the reliability of both taxis and passengers. This means fewer taxies chasing passengers who aren’t there, and fewer passengers left stranded by untrusting dispatchers.
- Fewer cars: People are much more likely to get out of their car (or not own one at all) if they know they have reliable alternatives. Public transit and car sharing are important to this, and a highly effective car service, available at one’s finger tips would be a powerful addition to the mix. Speaking of reliable: a 3 minute average is pretty god damn reliable. Certainly more reliable than the taxi experience many receive in Vancouver.
- Greener: Pre-positioning cars in neighborhoods where you can predict demand means fewer cars trolling for fares. In addition, because they are nearer to their fares, Uber cars are doubly more efficient. This means fewer carbon emissions. Also, more Uber rides means less pressure on downtown parking and, as I mentioned above, possibly fewer cars on the road.
- Serve more neighborhoods: When you can predict demand it means you’ll better serve those pesky “under-served” suburban neighbourhoods Rather than having everybody chasing fares in the busiest part of town, you can be more strategic about how you deploy your cars.
- Convient: Using the app is just easier. I can order a taxi in a crowded bar without having to talk to (and thus be misheard) by the dispatcher. As a user, the thing I’ve loved most about Uber is that when you book a car, you get to see where it is. So rather than relying on the dispatcher “assuring” you the car is only 5 minutes away, you can see on the make exactly where it is. (This is a bonus for those with awkward addresses, I’ve actually guided lost drivers to my location when I’ve been in a complicated cul-de-sac).
The other mistake is to assume that Uber is about town cars. Here in Vancouver the cosy oligarchy of taxis companies – and (from what I understand) the complete lack of independent taxis – means that they don’t want to work with Uber. And yet, while I’m an Uber user I’ve actually only used its town-car service once (to try it out), I mostly use Uber for taxis – while traveling on business in Toronto. Again, there are benefits.
- Foreigner friendly: As someone less familiar with street addresses in Toronto, and totally unaware of taxi phone numbers, Uber locates me and brings a taxi to me. I don’t have to know much about my address. This makes it exceedingly tourist friendly. In addition, drivers are rated… so I can choose not to use poorly rated drivers – a major benefit. Last time I checked, tourism was big business in Vancouver. Wouldn’t it be nice if we made our city even easier to navigate for tourists?
- Better for independent drivers: While some observers rail that Uber is a “foreign firm” it could be a valuable supplier for independent taxi drivers (were we to have any). As such, it might support a broader taxi driver community, one that was not beholden to one of the four players in our market. That, one would think, would be good for taxi drivers (but admittedly, potentially less good for big four companies who presently can take $522 taxi license the city issues and then resell it to drivers for $250,000-$500,000 per shift. That’s a pretty serious mark up. And while I’m sure it is great for the taxi companies… it is less clear to me how the city government, taxpayer, taxi user, or taxi drivers. Feels like a lot of lost tax revenue, or expensive barrier to entry. Heaven forbid we break up that arrangement. For more on the shady world of the taxi business in Vancouver, I suggest you read this excellent article by Luke Brocki.
The PTB should engage Uber and find a compromise because you know, I know, and everyone knows, that the types of innovations I describe above aren’t going to emerge organically out of the taxi industry in Vancouver (or, in any city for that matter). Kill Uber and you kill any incentive for the taxi industry to engage with the future. And frankly, that’s a pretty crappy outcome for everyone who takes taxis.
But, it gets worse. The PTB needs to know that failing to engage in Uber won’t make this problem go away. Uber is a downright straightforward problem/opportunity to manage. What is the PTB going to do when Hailo, Lyft, or SideCar elects to expand to Vancouver? Will we have to sit back and watch with envy as Torontonians, New Yorkers, San Franciscans, Londoners, Washingtonians (the list goes on and on) and others enjoy these services?
I’m not saying the PTB should accomodate Uber, I’m saying the PTB needs a strategy to accomodate a whole wave of innovators that are going to descend on the transportation business. Uber is just an opportunity to being figuring this out. Sticking your head in the sand isn’t going to make these issues go away. More disruptive alternatives are on the way. You’d better start engaging this stuff today, while we passengers only hate you a little bit.
Vancouverites deserve a world class taxi and town car service. One that innovates and offers world class service. Today we have a company that is trying to do that, and more that are likely on the way. It would be nice if we had a PTB that worked with them rather than against them.
Some Additional Thought and Caveats on this Piece and this Issue.
1. Minister’s Response.
To describe the response by the minister responsible, Mary Polak as disappointing would be an understatement. Given she appoints the PTB and likely has some influence, she washed her hands of the issue so fast it she has little interest understanding what is actually going on. (For those who are upset at the PTB decision, I’d focus your tweets at her – particularly as she has gotten off relatively lightly.). My hope is that her, or someone in her staff, will see this piece and see that this issue won’t be going away, it is going to get bigger.
2. Some Thoughts on Uber
For those who who don’t like Uber and those interested in a little history:
Firstly. Yes, I am aware that Uber founder Travis Kalanick is a both fan of Ayn Rand and a fairly uncompromising person. Personally, I’m not a fan Ayn Rand’s writings. I think her books are terrible and that her understanding of how markets and society work (to say nothing of human relationships) is deeply, deeply flawed and certainly lacks nuance. And while some people use this as a basis to write mean articles about Kalanick I think it is a pretty poor line of attack. While I may disagree with its founders ideology (if that is what it is), I’m much more interested in the company’s impact and business model.
In regards to Kalanick being hardheaded (or other, less flattering descriptors), I’m aware of that too. Of course, the people who judge him are usually those who have not tried to do a start up, much less one that tries to alter a sometimes more than 100 year old industry that does not always benefit consumers (or its drivers). Do I agree with Uber’s approach? Not always. I think they screwed up badly in New York. At the same time, in many cities, I think they have had little choice. The current operators – who, let me remind you, compose a market oligarchy – are not exactly interested in innovation or new entrants. If you are going to try to change the way taxi service is delivered… being hardheaded is probably a job requirement. The fact that some taxi companies go after them is not a sign of them being a bully, it could be a sign that they will make the market place more competitive. Nor do I think that they mobilize their users makes them a “bully.” I find it interesting to contrast Uber with the case of PickupPal, a Canadian company that was equally at odds with similar transportation rules and who also started a massive petition (and ultimately had the law changed – much to the chagrin of bus companies). It’s noteworthy that PickupPal is not portrayed as the bully and is indeed celebrated as the triumph of the consumer over the vested interests of the status quo players.
3. Other Reading
Finally, Karen Fung has a good piece about the complexity of transport policy that I don’t really think makes the case for not letting Uber into the market, but is worth the read.
Also, as I mentioned in the piece, Luke Brocki’s piece, Taxiland, is definitely worth reading.
4. Poorly Formed Tweets
Oh, and I was disappointed to see this tweet by a journalist who I normally find quite thoughtful. A desire for more buses and for services like Uber are hardly mutually exclusive. Indeed, trying to pit the two options against each strikes me as downright counter productive. I’m in favour of all solutions that make increase options and diminish the dependency on car ownership. I’m happy to pay more taxes for better bus service, and at the same time, Uber strikes me as another (low cost) way to spark innovation and increase options.