In challenging local regulations, the ride service has gone too far in undermining public safety.
Amid the horror of the ongoing hostage situation in Sydney's central business district, somehow the ride service Uber has managed to add itself to the list of bad guys. As demand to leave the city center increased during the early hours of the crisis, so too did Uber fares, in line with the company's surge pricing policy—eventually reaching a minimum of $100, according to Mashable. In response to some pushback, Uber offered this incredibly thoughtless explanation:
We are all concerned with events in CBD. Fares have increased to encourage more drivers to come online & pick up passengers in the area.— Uber Sydney (@Uber_Sydney) December 15, 2014
That led to a predictable onslaught of much-deserved criticism that hasn't let up, with some Twitter users calling this the last straw:
Ultimately Uber did address the problem, offering free rides to anyone in Sydney and refunds to users who were harmed by the price surge. (The company also pointed out that the surge went into effect automatically.) But the incident is just the latest in a rapidly lengthening line of PR disasters for Uber: in recent weeks, the company has shown a flagrant willingness to invade rider privacy and been taken to court by Los Angeles and San Francisco for misleading the public.
There's a theme to these problems, and it's centered around public safety. Uber's original goal of disrupting the highly regulated taxi industry might make a lot of sense to economists seeking more market competition. But local regulations do more than write the rules for supply and demand; they're also there to protect the public interest, and it's in this area where Uber has been equally disruptive, in a negative way.
Take, for instance, one of the charges leveled at Uber in the recent lawsuit by San Francisco. Uber says it uses a driver background check "often more rigorous than what is required to become a taxi driver." (This, of course, has been proven definitely not to be the case for Uber in India). But the S.F. lawsuit contends that Uber actually uses a check system that's far less reliable than the industry standard—one that doesn't require fingerprinting connected to criminal databases, which makes it much easier for a potential driver to falsify an identity.
And the allegations get worse. In addition to making its dubious claim about having better driver background checks, Uber fought heavily against a California bill that would have required the company to use the very same fingerprinting technology required for official city taxis. From the lawsuit:
At the same time Uber was stating that it is "working diligently to ensure we're doing everything we can to make Uber the safest experience on the road," it was instead working diligently to ensure it was doing everything it could to successfully defeat a bill pending in the California legislature that would have actually made Uber safer for its customers and the public.
A number of media accounts noted in the lawsuit corroborate these charges of poor driver oversight. Yes, such examples are anecdotal, but the point is that Uber's apparent quest to expose unfavorable market regulations often smacks of little more than merely wanting to ensure favorable Uber regulations. In challenging the rules that might have limited consumer options, Uber also seems to be undermining the rules that protect consumer welfare.
The Sydney incident should only encourage local officials to press back against Uber when it comes to public safety. (Indeed, in late November, a New York politician reportedly proposed a new law that would cap Uber's surge pricing at 100 percent of the fare, instead of 900 percent.) It's also a reminder that the window of opportunity in the mobility market remains very open for the taking: Uber's technology advantage is quite small at the moment, and its social deficit is widening by the day.