NetGuide NZ - So what’s the big deal with Uber, anyway?

Warning: This story was published more than a year ago.

So what’s the big deal with Uber, anyway?

The young start up has a knack for polarising both consumers and commentators all around the world. Not-so-great press has led to claims that Uber is unsafe, its drivers are not vetted by police, and it isn’t operating within law guidelines.

Following huge amounts of pressure from the New Zealand Taxi Federation, bad press and an official complaint from Uber, the Government has announced it will review the rules under which taxi and private hire services operate.

Uber was launched in San Francisco in 2009 and now operates in more than 250 cities worldwide, including Auckland and Wellington. It connects people with drivers via a smartphone app, offering taxi-like rides at often cheaper prices. Its rapid expansion has taxi companies on its toes as it looks to dramatically disrupt the way people travel.

In New Zealand, under the law private hire cars such as Uber have to be booked in advance and sell fares at a fixed price. Where Uber has fallen into trouble, however, is because its passengers can ‘hail’ a ride via their smartphone, and are only given an estimate of what the journey will cost them.

The Taxi Federation wants Uber regulated the same way the taxi industry is regulated.

Uber argues that the current rules for taxi and private hire drivers are outdated. “There are those who defend the rules in place because they were rules that made sense for the time and technologies that existed when they were written,” the company says in a blog post. “They don’t make sense anymore.”

Reported rapes and assaults in various countries linked to Uber are allowing taxi companies to reap the rewards of bad press.

Hundreds of assaults by taxi drivers are reported across the world every year, yet a small number of incidents, in comparison, in Uber vehicles have been headline news. “Passenger attacked in taxi” just doesn’t have the same ring to it as “Passenger attacked in Uber car”. The former attributes blame to the driver, while the latter implies blame sits with the company.

While these headlines don’t do any favours for Uber’s safety reputation, in actual fact, Uber drivers have to go through pretty extensive checks. Uber drivers are rated by their passengers and can be eventually cut off if they rate too low. Additionally, each ride is tracked in real time via the passenger’s smartphone. 

“Before any partner driver can drive on the Uber platform in New Zealand, they must be fully licensed and accredited by the New Zealand Transport Agency to be a private hire driver,” the blog post explains.

According to the post, each partner holds a current driver’s licence, a current Passenger Endorsement (which includes a comprehensive criminal history and driving history check conducted by the NZTA, and which is also required to drive a taxi), a Passenger Service License (PSL) (or works for a PSL holder), a Private Hire Service Registration and a Certificate Of Fitness for their vehicle.

What Uber doesn’t have, however, is a policy that makes their ‘partners’ install cameras in their vehicles.

On top of the flack Uber has received about safety, Uber has also received criticism over its surge pricing.

As part of its pricing policy, Uber automatically increases its prices when demand is high. While this isn’t as dramatic an issue as some are trying to make out, unfortunately for Uber, its surge pricing was met with disdain when prices were automatically increased during the Sydney hostage crisis last year.

Uber markets its surge pricing as a way to get more drivers on the road, with profits going directly to drivers, allowing them to supplement their incomes. “We are proud to bring new economic opportunities for licensed and responsible drivers,” the company says.

“New Zealand has some of the most expensive taxis in the world. We’re committed to bringing the costs down for both driver and rider, to creating jobs for hundreds of Kiwis, and to providing the safest, most reliable rides on the road.”

Regardless of how Uber is marketing itself and how it is being portrayed in the press, at the end of the day it is a business and businesses want, and need, to make money.

In Europe, Uber offers a range of travelling options including professional limousine services to informal ride-sharing options. The company has been hit with court injunctions in Belgium, France, Germany, the Netherlands and Spain for violating taxi licensing rules.

Uber’s response to its critics has also been met with criticism. Uber came under fire when Buzzfeed revealed senior executive Emil Michael suggested the company hire a team of researchers to dig up dirt on its critics, and to “specifically spread details of the personal life of a female journalist who has criticised the company”, following her remarks that Uber was sexist and misogynistic.

Closer to home, the lead up to the government review was no doubt lead by the controversial news that New Zealand police officers were pulling over Uber cars and ordering the passengers to vacate.

Uber NZ claims an officer had been targeting Uber drivers. “A police officer in Auckland has targeted Uber partners in order to falsely issue fines claiming that the iPhone is being used as a taxi meter,” says Katie Curran, Uber communications spokesperson.

“The officer’s actions has also put riders at risk when he ordered them to vacate the vehicles, leaving them stranded at night with no other travel options to get home,” she says.

The police hit back against the claims, saying that while several ‘private hire’ drivers had been issued infringements, police officers did not leave anyone stranded.

Uber filed complaints with the Independent Police Conduct Authority following these events.

Before the Government’s announcement that it would review the rules, Uber sent out a plea for support asking Kiwis to “tell the Government why you choose Uber”.

Uber says, “vested interests have also been spreading misinformation designed to scare riders and bully drivers to protect a small group of large and powerful taxi incumbents. “

“Drivers are being harassed over grey areas in interpretation of a minor pricing rule. People are being treated like criminals because your fare quote might read $13-$15 as opposed to $14.30.”

As reported by The Herald, Taxi Federation executive director Roger Heale told Radio New Zealand the federation was happy for Uber to practise in New Zealand, but would like to see the company comply with the same rules as other taxi companies.

Taxi companies would fare well to change the way they operate by adapting their business models to incorporate new technologies. Why would anyone stay on hold on the phone when they can order a car via their smartphone, track how far away the driver is and receive a text message when the car is waiting for you?

Despite the deserved/undeserved hostility the company is receiving, Uber is good news for consumers and drivers, providing much needed competition in an ancient taxi market in need of a serious shake up.

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