Chicago Tribune - Five myths about Uber
30/12/14 21:58
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Five myths about Uber
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PHIL VELASQUEZ, CHICAGO TRIBUNE
Uber's rise as a tech company/transit juggernaut has made it a target.
By Emily Badger
3:32 pm, December 15, 2014
This month, the ride-hailing app Uber announced that it had raised an additional $1.2 billion from investors, who valued the
company at about $40 billion. That staggering number, and the aggressive corporate culture that drove the start-up there, have
made Uber — with its loyal customers and loud critics — one of the most controversial and valuable tech companies today.
Let's clear up some misconceptions about the company, its drivers and its customers.
1. Uber is a transportation company.
Uber launched five years ago with the tagline, "Everyone's private driver." The smartphone app allows consumers to request a
ride on demand. A driver picks you up, GPS calculates the distance and the fare, and the app automatically charges your credit
card. The result is faster than public transit, more seamless than a taxi and, Uber argues, cheaper than owning a car.
But Uber now sees itself as much more than a middleman for car rides, and its investors clearly do too. (Jeff Bezos, owner of
The Washington Post, is an investor in Uber.) The same sophisticated system Uber has built to match and move passengers
could move goods too. The company is already experimenting with the idea; this year it launched a courier service in New York
and a delivery test in Washington, offering corner-store conveniences such as toothpaste and tampons. That long-term picture
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would put it in competition with rivals well beyond the taxi industry, such as UPS and Amazon. And it would make the
company's early fights with Yellow Cab look quaint.
Uber hinted at its larger aspirations last year when it updated its tagline. The new phrase: "Where lifestyle meets logistics."
2. Uber is for rich millennials.
This was more accurate when the company first launched as a black-town-car service offering an upscale alternative to taxicabs.
Since then, however, Uber has rolled out a series of services meant for a larger audience. Its low-cost line, UberX, offers rides in
the back seat of a stranger's personal car that are often cheaper than trips in traditional cabs. And the company has started to
pilot another service, UberPool, that will make rides cheaper still by piling multiple strangers into one car in a form of
carpooling.
As for demographics, Uber argues that it provides more reliable service to minority consumers and underserved neighborhoods
that have historically been discriminated against by cab companies. User testimonials bear this out: Uber travels to many
neighborhoods where cabs just won't go. It remains true, though, that you need a credit card and a smartphone.
3. Uber opposes regulation.
In the beginning, it did. Uber warned that onerous regulation would smother innovation. And it argued that the free market
could solve the problems that regulators sought to manage: Consumer ratings would root out dangerous drivers, surge pricing
would regulate driver supply and Uber itself would vet drivers.
But gaps quickly emerged in this argument, most notably in the insurance coverage for non-professional UberX drivers using
their personal cars and in the quality of Uber's background checks. In many markets, UberX, which enables anyone with a
vehicle to become a driver for hire, simply wasn't legal. For these and other reasons, some cities — including Portland, Ore.;
Philadelphia; Brussels; and New Delhi — have sued Uber or tried to ban it.
In this legal limbo, Uber now recognizes that regulation is the price it must pay. The company is savvy, though, about what kind
of regulation it wants — and it's pretty good at getting it. Washington recently passed a law allowing people to offer rides for pay
in their personal cars. The new rules require companies like Uber to carry $1 million in insurance, and they mandate
background checks and vehicle inspections. Uber is now touting the District of Columbia's regulation as a model for the rest of
the country.
4. Uber is sexist.
This is a fair criticism of Uber's top executives. The company's brash chief executive, Travis Kalanick, infamously joked to GQ
magazine about all the attention the company helped him garner from women. And Emil Michael, a senior vice president,
recently caused Uber's worst PR crisis to date by suggesting that the company conduct opposition research against critical
journalists. He singled out PandoDaily editor Sarah Lacy, who has called out the company for sexism.
Uber's "bro" culture clearly hasn't kept pace with the firm's rise as a major global company. And many women miffed by its
corporate antics — Lacy included — have deleted the app because of them. Uber's corporate culture, though, doesn't necessarily
extend to its drivers, precisely because Uber's business model keeps them at arm's length. The drivers are all independent
contractors.
5. The data Uber has about you is pretty mundane.
Every time you take an Uber ride, the company collects data about you: where you want to be picked up, where you're going,
what time of day you travel and how much you're willing to pay for that ride. All of this data makes up Uber's most valuable
asset. It allows the company to match riders to drivers on a moment's notice and to calibrate prices during peak hours.
While these individual data points seem relatively innocuous — particularly when your smartphone is tracking your
whereabouts anyway — privacy advocates warn that the information may be pretty revealing. Take a lot of trips, and your Uber
log probably knows where you live, how often you go to the red-light district, even whether you regularly ride to AA meetings or
medical clinics. Uber proved this point with a blog post two years ago that used trip data to identify "rides of glory" — what
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appeared to be trips home from one-night stands. (The company has since removed the post.)
Uber executives' recent antics raise questions about whether the company will behave responsibly with this data — or, as
Michael seemed to suggest, whether it will use personal data against its critics. Privacy advocates also worry about whether all
this information could be accessed by hackers. As the company expands, Uber will need to persuade consumers to trust not just
the service it provides but also its stewardship of the data it collects in the process.
Washington Post
Emily Badger is a reporter for The Washington Post's Wonkblog.
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