Mara Gualtieri

ENC 2135-37
Research Paper

Transportation is an aspect of society that has had many great advances over time, and
something that has potential to continuously improve as more technological innovations arise.
For a long time, it seems as though the cars, motorcycles, and methods of public transportation,
while improving slightly from time to time, had gotten relatively as good as they were going to
get. Specifically when it came to taxis and the taxi industry, any film depiction of a taxi from the
1970s and on was the same one that could be spotted on the street today.
Taxis have remained the same as they always have in appearance, but also in the way
their industries are run. They are heavily regulated in that drivers must have background checks,
taxi cabs must be kept to a certain standard, and in many cities, there was often a cap on how
many taxi cabs there could be in circulation to ensure that every taxi driver would have
customers needing a ride.
However, as recent as five years ago, the technological advances of this day and age
paved way for a new sort of transportation in the form of a phone application, Uber.

What is Uber?

Uber is a transportation company that links available drivers in an area to customers in

need of a ride from one place to another through the companys networking phone application.
Cofounded with Travis Kalanick and Garrett Camp, it was started in 2009 and limited to their
large outer social circle in San Francisco, but it was eventually officially launched in 2010. Now,

Travis Kalanick is the CEO of the company that has changed the transportation industry so
much. Users can download the phone application, and send out their need for a ride to a specific
place, and the phone application will automatically find the closest Uber driver in the area. The
phone application gives the user an estimated price, allows the user to leave a tip at the end of the
ride as well as giving them the opportunity to rate their driver.
Of course, no phone application begins booming business directly overnight, and Ubers
services began improving the more people were in the network. When Uber would have, say,
three cars prowling around San Francisco, riders had to wait 20 minutes for a lift; but on
weekend evenings, when 15 or 20 cars might be on the streets, wait times plummeted. In other
words, as Uber got busier, it got better. Drivers made more money and passengers were happier.
(Chafkin) Soon after the amount of people, both drivers and users increased on the phone
applications network, Uber became extremely popular very fast. In five years, Uber, which
dispatches low-cost taxis and limousines operated by independent drivers, is likely the fastestgrowing startup in history. It has more than 1 million active driversmeaning they did at least
one trip in the past weekoperating in 330 cities (as of mid-August) and a valuation of $51
billion, which is roughly equivalent to the market capitalization of General Motors. (Chafkin)
Uber has become an economical force that cannot be ignored any longer. In fact, Uber has begun
to generate more revenue than its taxi counterpart. Since the second quarter of 2014, Uber has
stolen taxis second-place marketshare spot, advancing from 8 percent to 31 percent while taxis
dipped from 37 percent to 24 percent. Uber also has eaten into rental cars lead, which dropped
from 55 percent to 45 percent, according to Certify. (Metcalf)

So Whats the Problem?

With all the revolutionary economic progress that Uber has made, comes a lot of
backlash. Peter Thiel, the Silicon Valley investor, has called Uber "the most ethically challenged
company in Silicon Valley," and the journalist and entrepreneur John Battelle has suggested that
everyone in the tech industry is "worried about the sheer expression of capitalistic force that the
company represents." (Chafkin)
Many taxi companies are angered at the fact that Uber is under no regulation, and thus
they argue that Uber is unfair competition for taxi companies who are severely regulated by both
themselves and the government. No regulations are unfair for two big reasons, they make no
guarantees of the quality standards for Uber, and they also have an advantage economically.
For anyone outside of Uber in this moment, it is difficult to be able to measure the quality
of Uber as a whole. Uber is not required to conduct any outside background checks on their
drivers, and they are also not required to show any level of quality of the cars that are being
driven by Uber drivers. Taxis on the other hand, are regulated as a public utility, with nearly
every single city in the United States having its own ordinances by which taxis must abide. In
this sense, it can be argued that Uber is unfairly finding business and revenue in any way
possible while taxis are much more restricted.
Graham Hodges, a retired taxi driver who is the author of Taxi! A Cultural History of the
New York City Cabdriver and also a professor at Colgate University agrees that Uber should be
treated similarly as taxis in order to ensure the safety of its customers. Regulations have been
around for a long time, Hodges says: Taxi regulations developed out of livery and hansom-cab
regulations from the 19th century. Theyre a necessary part of urban transportation. Theyve been
that way since the metropolitanization of cities in the 1850s. And those in turn are based on a
long-term precedent in Europe and other parts of the world. From hard-earned experience, those

regulations ensure fairness and safety. (Frizell) He adds, Taxis are pretty much a public utility.
Like subway and bus systems, the electric grid or the sewage system, taxis provide an invaluable
service to cities like New York, and the government should play an important role in regulating
them. (Frizell)
Now this doesnt seem unreasonable. Background checks and car inspections are both
things that Uber takes care of internally, as both drivers and their cars must be approved by the
company before being able to work for it. While it would certainly cost Uber more than it does
now to conduct these sorts of requirements through the government, it is doable, and in cases
such as with New York Citys Taxi and Limousine Commission, there have been attempts to
regulate this aspect of Uber. Meera Joshi of the committee stated Our goal is safety,
accountability and availability, and these are protections that should be in place whether you get
into a green, yellow or black car, you hailed it by hand or you picked up the phone or you used
your smartphone. (Rojas)
The real problem taxi industries have with Uber is their economic advantage. For all the
convenience that Uber may offer its users, one of its primary byproducts has been the
degradation of working-class jobs that once generated a living wage. (Liss)
There is no limit as to how many people can be working on Uber, yet taxis have always
been capped, ensuring that there wasnt excess supply over the demand. By limiting the total
number of cabs, the system guarantees work and promises drivers a living wage. Until the entry
of app-based services, cab companies operated with all of their allocated slots either sold or
rented to drivers. (Liss) In this way, being a taxi driver was a certain full-time job. However,
now that Uber can have an unlimited amount of drivers in a given place, there are many drivers
who have been displaced of taxi driving being their sole income. Uber has little incentive to

build well-paying, stable opportunities with reasonable hours at salaries of $50,000 a year. Quite
the opposite: by creating part-time jobs that are the equivalent of Walmart greeters on wheels, the
company can keep wages low (benefits, of course, are out of the question). (Liss)
Because many taxi drivers continue to make less and less since the arrival of Uber, many
have protested to demand Uber to be strictly regulated. One of these protests was staged in
Washington D.C where Local news reports showed lines of drivers, sitting parked in their cabs
along Pennsylvania Avenue in northwest Washington on Wednesday between Freedom Plaza and
the districts City Hall. (Rhodan)
Another problem with Uber is the fact that it is really only accessible to a specific part of
the population. Indeed, there is a strong race, class and age bias as to who can utilize the
service. You have to own a smartphone, which has an average cost of more than $500. Uber
requires customers to pay with a credit card, cutting off those with no or poor credit. Until
recently, the company had no wheelchair-accessible vehicles in Virginia, and continues to lack
adequate services for the disabled in many places. (Liss) This is a problem for anyone who does
not fall into these categories, and it is no wonder that Uber is mostly popular among millennials.
Regulations by the government could help with some of these issues, potentially making Uber
more friendly for persons with disabilities and creating other ways for people to pay.

There is a Positive Side

Still, with all the work that Uber needs, there is no denying that it has woken up and
revolutionized transportation in ways that had not been done before. Once a company had a
locked-in majority of all cabs in a given jurisdiction, it had little incentive to modernize its
operation or innovate. A customers experience was largely the same in 2014 as it was in 1983

(Liss) It is true that Uber has completely changed the way society looks at what reliable,
comfortable and affordable transportation is.
The changes Uber has brought to the transportation industry are not stopping anytime
soon. "We need to make sure that we are a part of the future," says Kalanick of autonomous
cars. "You cant call yourself a technology company if youre resisting technological progress."
(Chafkin) With the revenue the company has been making, they are constantly looking for ways
to further themselves and be involved in the upcoming stages of transportation. Travis Malanick,
CEO of Uber, has introduced a new aspect of the phone application called UberPool, where
customers can agree to share a ride with another customer headed along a similar route and then
divide the cost of the ride respectively. UberPool takes Uber a step further by maximizing a
drivers time and also reducing the cost of users. However, Uber is also willing to invest in more
futuristic types of transportation. Earlier this year, Uber reportedly poached dozens of members
of the Carnegie Mellon University robotics department for a driverless-car initiative that could
one day make its services much cheaper and more efficient. (Chafkin) With all these
investments and research toward what transportation will look like in the future, Uber is ensuring
its place on the market in the long-term, and taxis may very well have to begin to do the same.
Uber has woken up taxi drivers who have been under very strict regulations with their
corresponding companies for years, and has made them want to demand more from the people at
the very top of their companies that reap the majority of the benefits from their very hard work.
Uber is my friend; they are weakening taxi companies, says Arlington driver Teguwaze
Gabreselassie. We can join with the companies to fight against Uber but only if the companies
push for laws that respect our rights too. (Liss)

Not only that, but Uber has helped the general economies of cities who lacked adequate
public transportation before. The availability of cheap and reliable transportation has helped
spur a real estate surge in San Francisco and a nightlife boom in downtown Los Angeles while
also (at least according to some studies) reducing drunk driving. (Chafkin)
In all, Ubers undeniable growth shows promise for the future.

Possible Solutions

Perhaps the best solution and compromise for the future of the transportation industry is
bringing elements from both modern Uber and the traditional taxi industry together. For
example, a new phone application launched by taxi industries in New York City named Arro is
hoping to elevate the taxi industry so that can can compete with Uber. To fight against Uber, a
new application is now being tested in more than 7,000 New York taxis. The new application,
called Arro, allows users to hail and pay for taxi rides in the city. The major difference is that
there is no surge pricing in Arro, while Uber fares increase when demand is high. With Arro,
passengers pay only meter fares just like hailing a cab on the street. (Liang) The software that
billionaires created to squeeze money out of drivers and consumers alike could be tweaked to
serve working people. It is also possible to imagine an industry where workers own and operate
it. The same technology that Uber employs could be used to create a system that preserves fulltime jobs, reduces the amount of hours needed to earn a living wage, and provides good service
to consumers. It is not hard to imagine a group of radical hackers developing an open-source
version of Ubers app. Such an app could be managed by a public entity or contracted out. If this
new app-based taxi service were run like a utility with governmental oversight, it would be
possible to efficiently cater to the public. (Liss)

By incorporating technological advances with certain safety regulations, it is possible that

ideas such as Uber and taxis can coexist.