Wow, so the crown of the "fintech" movement is just as bad as the banks, and the two biggest Silicon Valley successes of the last decade, Uber and AirBnB, are really just cases of massively successful regulatory arbitrage. Nice innovation!
Please, the handful of irregularities they found at LC doesn't begin to amount to the shady stuff large banks have been caught doing. More importantly if you are a regular investor in LC loans none of the things found have caused investors in LC notes to lose money.
Why not just group the fraudsters and the gangsters together like we normally do? These banks have had about 15x as much time to make that mistake, to me it looks like LC was headed that route.
It seems a common way to "disrupt" a market is to find a loophole to call yourself something else so you can avoid all the laws everyone else is beholden to that were put in place for people's protection.
That sounds pretty legitimate if the laws don't actually protect people, and have been corrupted by wealthy interests, such as taxi medallion owners. Or if the laws are outdated.
Ubers are consistently safer than taxis, provide better customer service, don't intentionally take long routes to scam you, actually take credit card instead of pretending their credit card reader is broken, don't refuse to drive you because you have luggage or are going a short distance or are living in a bad part of town, etc etc.
It turns out that Uber's rating system is much better for people's protection than whatever laws and background checks taxis are subject to.
> actually take credit card instead of pretending their credit card reader is broken
After you've arrived at your destination, have you really found any taxi driver who would rather take _no payment_ than a credit card? If all you have is plastic--and if the driver is required to accept that form of payment--then I guess I don't see the problem (for riders). I've had drivers take my credit card # on a carbon copy physical swipe. I've had drivers admit that the card reader actually _did_ work. Unfortunately for them, I've even had drivers accept underpayment in cash because they were legitimately unprepared.
So, when it is unclear whether they are scamming you, your response is: here, have a physical copy of my credit card information? Sure, the liability is with your bank, but still seems like bad decision making.
- You are using "scamming" as a binary yes/no behavior, when in fact there is a huge difference between lying about a faulty machine and committing credit card fraud. The most likely reason for the lie (not "scam", that's too strong of a word here) is to avoid the credit processing fee. And that's _if_ they are lying in the first place. There simply isn't much (risk-adjusted) benefit for the driver to escalate that situation into credit fraud.
- The information on a hard-copy swipe is identical to a magnetic swipe and also the information provided to any online merchant (i.e. CC#, name, expiration; not CVV). Why should I be any more worried about this information on a piece of paper vs. the risk of a card skimmer at a gas station? Or a security breach of any one of the multitude of online retails who I have _ever_ shopped with?
- As you stated, the risk goes to the bank, as I am not liable for fraudulent transactions on my card. In fact, there's actually risk going to the driver as well: without an immediate approval, they don't know if I'm handing them a worthless card!
- The implication from your statement seems to be that... you wouldn't pay the driver, who has already rendered services and is capable of accepting valid payment from you. Is that what you mean? If so, that is not OK.
Protect people! Ha! The laws covering cabs require them to go into undesirable areas so those that can't afford a full car can still get around, accept cash payments for those unable to get credit, vehicle inspections, and so on. When you say protect people, do you just mean the people in your bubble where everyone has a card?
Taxis in many cities will refuse to go somewhere (e.g. JFK, South London, outer Beijing, ...) even though they are legally obligated to take you anywhere. There is little recourse. The driver's medallion won't be taken away for breaking the conditions of the monopoly.
If that were true, I would expect the experience of using Uber to be identical to using a taxi, or for AirBnBs to be identical to hotels.
They're different experiences and certainly innovating. Just because they had to overcome legislation to grow does not mean that regulatory subversion is their only benefit.
Uber lacks the safety precautions taxis do, and they're leaving cities who mandate the level of accountability taxi companies have. AirBnB customers have reported heavy amounts of racism and bigotry, things that wouldn't fly very far very fast in the hotel industry.
Regulatory subversion is what gives them the margins to operate, and if a few people get hurt or discriminated against, I'm pretty sure Uber and AirBnB are okay with that trade-off.
Name those precautions and how exactly they relate to safety.
> AirBnB customers have reported heavy amounts of racism and bigotry
Millions of people stay in AirBnBs and the vast majority of them have positive experiences. There's no evidence of rampant racism or bigotry and any host who acted that way would be kicked off the platform.
This continued insistence that Uber and AirBnB are categorically inferior to legacy companies and only profit by skirting (useful) regulations is ridiculous. If taxis were better than Uber, why would anyone ever use Uber?
People have dreamt about on-demand car hailing for a long time, but it's always been a pipe dream - building the two-sided network is such too hard and too expensive, and a small network is just not worth using as a consumer. How is this not innovation?
Most of the innovation there was in the cell phone[1]. You've been able to order a car by phone in major metros for longer than those have been around. In fact, Uber started off as an app for using those very services.
Props to Uber for execution, but all the pieces were there.
[1]-edit: some in the smartphone, but most in the old "makes calls" cell phones
Execution and timing. Uber had a big advantage in being new & shiny just as the market was ready for it. They tried it multiple times and the first few it failed to gain any traction.
Ummm... as a matter of fact, Uber was only a black car service until Lyft (and perhaps others) started P2P service. Uber was a fast follower in that space.
yeah, but unless you're in a city like New York (possibly a handful of others) the wait is FOREVER. In Phoenix it was routine to have to wait half an hour or more. Same in SLC. It's awful. Uber and Lyft reduced the wait to a fraction of the time with better, quicker and cheaper service.
Wow, I forgot we set up our society so tech developers got to decide what kind of society we wanted. Laws requiring cabs to serve disadvantaged areas? Accept cash so people without credit could get around? Provide safe living spaces, up to code, for visitors from out of town? How disconnected from reality are you?
Furthermore, what kind of precedent does flaunting legitimate laws set? Thankfully Austin was able to have some balls and not allow that shit to fly.
This complaint makes no sense to me. You just call the taxi company further in advance of when you need the ride. If you know it's always around a 30 minute wait, just call 45 minutes ahead of time and tell them the time you need picked up.
Phoenix & SLC are also not cities in which people are likely to rely on on-demand ride sharing. Most people own their own car especially if they care about being able to determine exactly when they engage in transiting.
Further, in all of the non-mega / non-already-has-developed-rapid-transit-system cities I've been in, apart from one single city (San Francisco), the wait time for Uber is on the order of the wait time for a taxi. The difference between needing to call or book ahead to avoid a 30 minute wait vs. a 15 minute wait is utterly irrelevant.
The real reason why Uber succeeds in these markets is that they currently subsidize the rate paid to the drivers and thus compete on price. They also have way better marketing and do a good job of making people think the market for Uber rides is more liquid than the market for taxi rides (though in truth it's not more liquid except in dense areas).
Uber is not profitable in these areas, and is just hoping it can subsidize the losses on most decentralized transit regions long enough to defeat regulatory issues, outlast competitors, and put pressure on taxi services. It's still quite a significant gamble.
I just logged in specifically to tell you that as a SLC resident without a car, I use lyft extensively. Similarly all my friends do as well, for the almost perfect example people use of preventing drunk driving.
I'm already pretty strapped for cash, hence why I don't have a car but I utilize Uber & Lyft when I'm unable to get to my destination in a timely manner.
I would not however get a taxi simply because I don't know the number to call, I don't know when they'll arrive at my house, and simply the entire taxi experience is just horrible.
When I used to use Taxi's in SLC (I am still a resident), I had to call two companies at a time, then wait 20 minutes for one to show up. The taxi cab drivers aren't FT like larger cities (according to a long-time dispatcher of Yellow Cab), so have (or had, this was a few years back) had preference of fares or shifts, skirting regulation.
I now use Lyft (for pricing and the drivers), then Uber (if Lyft is unavailable).
This just makes your comment lose all credibility to me, I'm afraid:
> I would not however get a taxi simply because I don't know the number to call, I don't know when they'll arrive at my house, and simply the entire taxi experience is just horrible.
You don't know the number? Really? If you have a mobile device from which to use Lyft, then getting the number is completely and entirely trivial.
While there is some variability in taxi arrival time (just as there is with Lyft or Uber arrival time), taxis typically are no later or more difficult to estimate. You just tell them when the taxi should arrive and that's when it will be there. There are even many apps for tracking taxis on a map interface. Those apps mostly only work in large cities, but it's easy to see they will expand to many other cities, certainly a city of the size of SLC.
You say "the entire taxi experience is just horrible" but your two biggest complaints are that you don't know the number (and apparently can't be bothered to look it up one time and add it to your contacts) and you don't know when they'll arrive (even though you tell them when to arrive, that's when they arrive, and their variability is not significantly different than Uber or Lyft variability).
I'm not able to make any sense of this if it's intended to be a criticism of the taxi experience in SLC.
> Further, in all of the non-mega [...] cities I've been in, apart from one single city (San Francisco), the wait time for Uber is on the order of the wait time for a taxi.
As a data point to the contrary, in Chicago we stopped calling taxi dispatchers to our apartment because they would arrive up to 30 minutes late. Even if we scheduled ahead of time, it didn't seem to matter; as if the dispatchers were holding our request until the last minute and then dispatching into the general queue (so why call ahead?)
With the Uber app, whenever we call a car (even a taxi) we get an ETA based on GPS coordinates of the driver, which is both accurate and updates live. There's a level of accountability that was never available with the existing taxi dispatch.
I live in northern Indiana and have visited Chicago many times in my life, downtown, near UChicago, and both airports. I've never experienced late taxis beyond a very normal 5min sort of thing.
I do not believe the quotations about profitability in hundreds of cities from the article. When the books are opened and it can be verified, then I'll believe it. Until then, I choose to chalk it up to duplicitous accounting.
I openly acknowledge I could be wrong. But vague quotes like this effectively do not mean anything, one way or the other, to me. Companies say this kind of thing all the time when it's not actually true by accepted accounting standards.
For me still this equation holds true.
Taxes are abundant and cheap in Singapore. Riding in someone's car makes me uncomfortable. (But that is just me, I suppose)
The success of Uber in a city is directly proportional to how much taxis suck in that city.
So Singapore is one of a few cities where that's the case (NYC also -- Uber doesn't really work there. I was there for 8 days and requesting an Uber as a 10-15 minute wait. You can get into one of a million cabs that go by in that time. I gave up).
Same in Bangkok. Taxis are plentiful and cheap. But like elsewhere if you flag one down they often refuse you if you want to go somewhere inconvenient for them. That's where a taxi hailing app like GrabTaxi is useful. It works like Uber except it's a taxi that picks you up. Uber exists here but hasn't got much traction (as far as I know).
NYC is actually one of Uber's most important cities. Don't forget that NYC is more than just Manhattan below 125th street. Getting a taxi in the outer boroughs was miserable. The green ones help but were a little too late. The black car services are entirely unpredictable and unreliable, doubly so if you are not of the ethnicity of the dispatcher/drivers they employ.
And let's not even talk about the number of times a cab driver straight up refused to take me to Brooklyn, both during the day and late at night. Totally illegal, but it happens all the time.
Agreed, when I was living in the Valley in 2003/4 public transportation was terrible and taxis nowhere to be found.
But then I was driving a shitty Ford ....
That's not my experience in Singapore. The one time I was there I had to wait 15 minutes to get a taxi and then had to argue with them to get them to take me where I wanted.
In contrast, Uber took less time and required no negotiation.
Taxis are abundant and cheap in Shanghai... unless it's raining (very common). Then they won't pick you up at all. They're still driving around, but you can't actually get one.
...ok, how? I understand it's "all about execution" but were there not explicit laws governing taxis and related services, as well as running a hotel out of your home? Did we as a society not choose to put those in place?
You can apply your logic to basically any entity in history to belittle them. Everything can be positioned as a "massive case of blah" if that is your goal.
No you can't. Was there ever a law explicitly saying coding an OS was illegal? Versus operating a cab company without registering with the government to prove compliance with laws already in place to deal with those? Or similarly running an illegal hotel out of your house?
Disagree. Transistor, car, heck even the iPhone (and I say this as a massive hater against apple) are not describable by this. Neither is anything which 1) actually solves a problem 2) in a legal way (Airbnb is pushing legislation, Uber is breaking it, and it appears lending club simply commited fraud)
No, making cars was never outright illegal. Operating a cap company, (or rather an illegal one), without proper licensing was. Operating a hotel out of your house was. Nice strawman.
But hasn't professional licensing and regulation gone a bit too far when driving someone in your car for money is supposedly illegal? What's the crime in that?