Why Uber Plays It Fast and Loose in Massachusetts
Massachusetts wasn’t the first or last place where the on-demand livery car service Uber ran into trouble with regulators, and that’s in part because Uber’s corporate strategy involves playing “fast and loose” with the rules. Or at least, that’s the take of The Verge’s Adrienne Jeffries, who has an interesting read out Friday exploring the way the company approaches regulations. It’s an approach you can only get away with if people really like your product.
You’ll recall that last month, the Massachusetts Division of Standards shut the service down because it used GPS technology to calculate fares. (As a refresher, Uber users request a car from their smartphone. After using the phone’s GPS to figure out the pickup location and transporting them, Uber automatically charges the fee to their stored credit card info. There’s very minimal effort on the user’s part.) After Uber mobilized its very loyal fans and the governor’s office intervened, the state reversed its decision, finding that the company was, in fact, operating within the law. But this was neither the first nor the last time Uber would butt heads with regulators. Jeffries puts Boston’s battle in the context of a similar campaign conducted on Washington D.C.’s legislators months earlier and the run-ins with New York City that have happened since, as Uber tries to launch an on-demand service using taxis there. Why all these legal troubles? “Uber comes at everything fast and hard—or fast and loose,” Jeffries writes:
“Their strategy has been ‘try and stop us, and if you try and stop us, then we’ll cross that bridge when we come to it,'” said Matt Kochman, who served as Uber’s founding general manager in New York before he left last year.
Kochman left Uber to do consulting for transportation brands and startups, fed up with Uber’s irreverent attitude toward regulators. “Discounting the rules and regulations as a whole, just because you want to launch a product and you have a certain vision for things, that’s just irresponsible,” Kochman said.
Indeed, that would seem like a reckless strategy if it weren’t working so well. It seems to us that Uber can only act cocky because it provides a service that a huge number of people are willing to fight for—to quickly change the rules for—as regulators and legislators in Massachusetts and D.C. learned. Their idealistic talk of innovation being suffocated by bureaucracy has time and again been persuasive enough to keep regulators from truly stopping their operations. (Hey, they persuaded us!) Speaking of loyal fans, there’s another reason Uber’s working so quickly. There’s competition for those fans, like Hailo, a London-based taxi-hailing app that’s planning a launch in Boston. From Jeffries:
Competition from Hailo and other startupps nipping at Uber’s heels is part of the reason the company is moving forward so recklessly. In addition to missteps with regulators, Uber has been spending gobs of money in its conquestGiven the passion Uber’s customers have shown for the company, it’s no wonder that the idea is taking hold with others.
Uber’s regulatory woes may be causing them headaches, but Massachusetts consumers don’t seem like they’ll be losing out.
Source URL: http://www.bostonmagazine.com/news/blog/2012/09/07/uber-fast-loose-massachusetts/