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Uber's Winter of Discontent Turns Fatal

by Roger Lanctot | Feb 12, 2018

A week ago, New York City livery driver Douglas Schifter committed suicide in front of City Hall in New York after posting a 1,700-word note on Facebook regarding his newfound inability to make a living in his chosen field thanks to the rise of Uber, Lyft and other ride hailing/sharing services.

In his post he wrote:

 "Companies do not care how they abuse us just so the executives get their bonuses," he wrote. "Due to the huge numbers of cars available with desperate drivers trying to feed their families, they squeeze rates to below operating costs and force professionals like me out of business. They count their money, and we are driven down into the streets we drive, becoming homeless and hungry. I will not be a slave working for chump change. I would rather be dead."

https://www.npr.org/2018/02/10/584757778/taxi-drivers-face-financial-crisis

https://nypost.com/2018/02/09/de-blasio-were-working-on-ride-share-rules-after-city-hall-suicide/

Schifter blamed New York Mayor Bill de Blasio, Governor Andrew Cuomo and former Mayor Michael Bloomberg for his plight and described Uber as a “known liar, cheat and thief.”

According to the Taxi and Limousine Commission in New York the number of for-hire vehicles has nearly tripled since the arrival of Uber, Lyft and their ilk. An early assessment of ride hailing’s impact in New York City focused on congestion, but concluded that the emergence of these services had not had a major impact.

The bigger issue, though, hasn’t so much been congestion as it has been driver compensation. As in most cities with a regulated taxi industry, New York saw the economics of drivers paying for a taxi medallion swiftly unravel in the face of app-based transportation options.

In essence, investors have been funding a scheme whereby professional drivers are being forced out in favor of under-compensated amateurs. The issue is playing out all over the world and some cities – in the U.S. and Europe – have barred Uber and Lyft from operating beyond the bounds of regulation normally applied to traditional taxis.

Consumers love the services and can hardly be blamed for doing so given the delta between a typical Uber/Lyft fare and the standard fare of a normal taxi. Using app-based transportation is a no-brainer – even if the driver may need help with directions or can’t speak English.

Uber and Lyft can afford to offer discounted fares because their unprofitable businesses are funded by investors playing for the big payoff that will result once they have established control of local ad hoc transportation. But this “race to the bottom” in Douglas Schifter’s words, has consequences including professional drivers that can no longer make a living and ad hoc transportation services operating outside of regulatory controls.

My personal nightmare scenario is the taxi line at the airport with no taxis – that is, after these companies are finally put out of business. Or, the day of inclement weather when Uber and Lyft freelance drivers are afraid to drive or unavailable – but the taxi companies that used to pick up under any and all circumstances are long gone. Or, maybe, taxis only exist to serve the suburbs after the Ubers and Lyfts of the world drive them out of the cities.

Are Uber and Lyft going to be there to pick you up in the dead of the night, in a bad neighborhood, if you have special needs? What is the commitment to quality of service beyond a five-star rating? Zero.

Cheap rides have consequences and, presumably, New York City will not be the last city to re-evaluate its more or less unregulated approach to managing ride hailing services. Uber and Lyft identified a need for an app-based experience delivered with personally-owned vehicles. It’s time for regulators to step in with proper registration requirements, background checks, training and tests.

It’s lovely that virtually anyone with a car or even without a car can be up and running as a Lyft or Uber driver in less than a day.  But is it right? How many Douglas Schifter’s will it take before regulators realize that it is time to step in to this bonfire of the livery drivers and implement some reasonable regulations.

As for the services themselves, Uber and Lyft have been a boon to travelers wherever they are available. I love the drivers and their stories – including the Lyft driver in Las Vegas who shot a fleeing 7-11 thief (not fatally) in the legs while on the job and the female Lyft driver in Los Angeles who survived being aggressively propositioned by a fare.

Unlike Airbnb, which serves a valuable role of creating affordable lodging inventory in some cases where no rooms are available, Uber and Lyft are directly displacing existing transportation alternatives which, in most cases, are closely regulated thereby limiting their ability to compete.

But the truly twisted part of it all is that fat cat investors are essentially using Uber and Lyft to prey on taxi drivers and operators, while taking advantage of a scenario that allows these companies to forgo vehicle ownership or inventory or driver training or evaluation or any service commitment. The Uber and Lyft drivers are often themselves getting screwed even as they are screwing the taxi drivers.

And let’s not forget the endgame – which is to get rid of drivers altogether.

It will be interesting to see what the next step is for New York City. The streets are already clogged with an estimated 130,000 for-hire vehicles and a growing number of delivery trucks from Amazon and others. Clearly, something has got to give. That something shouldn’t be professional drivers.

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