Friday, December 5, 2014

Uber stars vs. taxi regulators is a great story about Uber, taxi scams, captured regulation, and so on.  Have fun.

How The “Sin City Shuffle” Works There are two main routes to get from the Vegas airport to the Strip. One of them is illegal. To figure out which one you’re on, apply this test: Look outside. If you can’t find outside, you’re in a tunnel—which means you’re being ripped off.

The I-215 tunnel adds about $10 to your fare, but one in three cabbies “longhauled” undercover cops through it anyway. The country hasn’t seen this kind of brazenness since Bankerty Robberson opened a Skimask Hut outside Wells Fargo in 1979.

What can possibly be done about such a confounding crime? I had plenty of time to research this on a recent trip to Vegas, while my own cabbie, Mickey, drove me to the Bellagio by way of Montpelier, Vermont.

Uber’s absurd answer to longhauling is straight from your childhood: When a driver behaves badly, he only gets one star. Within hours, Uber adjusts your fare. Their systems can do this automatically because they have everything they need to calculate an “ideal” fare—start point, end point, traffic conditions, and past fares. If the driver keeps scamming others, he automatically gets fired.

But Nevada officials found fault in Uber’s stars. In fact, they kicked the company out of town for not protecting tourists.
Read the rest here


  1. The correct conclusion to draw from this article is that strong government regulation is very much needed in the taxi industry. The author is obviously a critic of regulation and an advocate of industry self-regulation. To make his point that self-regulation can be effective, he has available to him many hundreds of years of history, since taxis have been around since long before cars were invented. Presumably unable to find a single anecdote from the past, he points to Uber, a very recent innovation. He speculates that, at long last, a solution has emerged that will allow the taxi industry to regulate itself: Uber! While this happy tale is perfectly possible, he provides not a shred evidence that Uber drivers cheat customers less often than do traditional taxis. So, I don't think we should shut down the taxi regulators just yet.

    1. It seems you haven't read the article.

      The article clearly shows gov't regulation is inefficient i.e. the endless bureaucratic and legal obstacles.

      Dr Cochrane basically says Uber's star system isn't perfect but it's at least BETTER than taxis.

  2. Honestly, nationalizing the taxi industry at the local level would be an improvement over the existing system. The city bus-and-rail corporation around here (UTA) actually does a pretty competent job of making the buses and trains run on time - I'm sure they could probably have a taxi system that wasn't totally inadequate to the city's needs.

    Which is not to say that it would be better than some hypothetical system where Uber and Lyft are allowed to operate as long as their drivers have commercial auto insurance. But it would be better than the existing private-public system.

    1. Why should they have to have commercial insurance, as long as the insurance they have will cover the riders?

  3. Instead of reinventing the wheel why not use software and technology already at hand? Yelp, Angie's List, etc are already set up for customer feedback. I think one or two of those businesses might be willing to work a deal with Las Vegas.The trucking industry routinely uses vehicle tracking.

    However, if people can't be troubled to read a large sign stating the fares I don't see them using an app either.

    One unpleasant aspect of uber was related to me by my daughter. She was trying to get to a Halloween party and called uber. The driver subsequently canceled the trip because he found a higher bid. She kept arranging rides and getting canceled by higher bids. Apparently Halloween is a busy night for uber.

    As she explained it, an uber driver can back out of the deal if they get a higher bid, and the fares offered are posted in real time. I'm not sure I like a system where the service provider can just back out of the deal at the last minute because a better price came along. Who conducts business like that? "I'll be there in 15 minutes unless a better offer comes along." Nice to know if you have a plane to catch.

    BTW, uber was working with state regulators in anticipation of starting up service in NV when they suddenly just sidestepped the process and opened for business. Apparently flip flopping on deals is a company policy.

    1. That is not how Uber works, at least in Chicago. Fares do vary to meet demand during peak hours, however the customer is warned before calling the cab about the higher fare. Then it's entirely the customer 's decision to pay or to wait.

  4. I like Uber.

    But such bigger fish to fry.

    Does someone really need to go to college for four years, and then law school for three years and then get licensed to practice law?


    Why is there such bashing of taxi drivers, but such silence on lawyers?

    1. So you're as good as a lawyer, oh? Let's assume that. Let's also assume your wife was in Driver Dan's car she hired using Uber. She was chatting with Driver Dan and tapped him on the shoulder and tried to hand him a picture of your kids while he was driving. Proximately Driver Dan hit a minivan and killed a kid in it. Driver Dan admits hitting the van but says your wife physically distracted him by shoving his shoulder and causing him to take his eyes of the road. Minivan Mom's insurance company, mom also seriously injured, sues Driver Dan, your wife, and Uber for negligence seeking $5 million in compensatory damages. Driver Dan had only $25,000 in coverage under a state minimum policy and recently declared bankruptcy due to gambling debts. Driver Dan's insurance company files a cross claim against your wife for negligence seeking indemnification for any damages awarded to minivan mom. Uber files a motion to dismiss the suit against it because it had legal control over you or the driver and had no legal relationship in the carriage for hire or with your wife. What is the likely outcome in the suit against your wife? Uber motion to dismiss? Assume this happens under Nevada law and the insurance coverage you have today.

      Now assume, Driver Dan's insurance lapsed. Outcome?

      What advice would you provide your wife?

    2. Anon--
      Sounds like a situation solved by no-fault insurance or common sense binding arbitration...
      Having expensive lawyers on all sides accoplishes what?

    3. In California, a Lawyer is not required to get any education. They merely have to pass the bar.

  5. Fun indeed.

    "The companies [like Uber and Airnb] help people sell rides in cars and rent stays in homes; they deserve no more credit for promoting a skill learned in preschool than Marriott or taxi companies."

    And what do these preschool ideas actually offer?

    "But here's one thing they do love to share: risk. Uber grew by heaping it on many drivers, asking them to push damage claims through their personal insurance companies while knowing that those companies did not cover commercial activity."

    See cnbc.

  6. Judge orders Uber to cease all operations in Spain

  7. Just wondering ,could he have dropped the H from Huber and changed it to Uber? I do a bit of lineage research, I always have to ask? Thanks.


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