Uber Wants to Get In on This Whole Ridesharing Thing

The company isn't entirely sure it's legal, but they're tired of waiting to find out.

For those who follow the saga of Uber, the company’s announcement today should strike at some familiar themes: a scrappy tech startup in the taxi industry moves into new cities, avoids the regulations there, and starts to make the more established companies a wee bit nervous.

But wait! A twist! Because today, the established business doing the kvetching is Uber, the smartphone app that lets users seamlessly hail and pay for a tax or black car. Turns out Uber is not so happy with the evolution of so-called “ridesharing” apps that let users semi-informally hitch rides with ordinary drivers, located and compensated through an app, to get where they need to go. Given that this essentially works around the entire structure of licensing and regulating drivers that accept money to take riders from A to B, one might assume that  the government would have some questions about it. But Uber announced today that after watching regulators sit on their hands in cities where Sidecar and other apps have been operating, the company is ready to move in on their business. In a blog post explaining the decision, the company says:

Uber refrained from participating in this technology sector — known as ridesharing — due to regulatory risk that ridesharing drivers may be subject to fines or criminal misdemeanors for participating in non-licensed transportation for compensation.

In most cities across the country, regulators have chosen not to enforce against non-licensed transportation providers using ridesharing apps. This course of non-action resulted in massive regulatory ambiguity leading to one-sided competition which Uber has not engaged in to its own disadvantage. It is this ambiguity which we are looking to address with Uber’s new policy on ridesharing:

  1. Uber will roll out ridesharing on its existing platform in any market where the regulators have given tacit approval;

  2. In the absence of regulatory leadership, Uber will implement safeguards in terms of safety and insurance that will go above and beyond what local regulatory bodies have in place for commercial transportation.

You’ll recall that Uber has a tempestuous relationship with cab companies in cities from Boston to Washington D.C. that accuse them of riding roughshod over established regulations. And they don’t seem ignorant of the slightly ironic situation they find themselves in here, going from accused to accuser. Uber CEO Travis Kalanick says in an interview with the Wall Street Journal that it’s in the way his company is reacting to a threat from a new disrupter that makes all this something less than hypocritical. “I think there’s a fundamental difference versus how we handle innovation versus traditional companies: we get in and go and do it.” The other option, he notes, would be to leverage existing regulatory hurdles to get the government to shut down the threat so that Uber didn’t have to deal with it. (This isn’t to say that cab companies aren’t “getting in” to the tech game at all. Boston Cab has an iPhone app, too. It’s far less snazzy than Uber’s but it’s a step.)

Boston being one of the companies where ridesharing has so far operated without much of a problem, we can assume that Uber has plans on setting up here. The blog post explains at more length how the company aims to differentiate itself from existing ridesharing services, with more stringent background checks on its participating drivers, and an integration with the current app platform. So now what we’re interested to see is whether the entrance of a big player like Uber into the ridesharing sphere gets the state’s regulators to do a double-take on it.