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All Uber, Or Uber Alles?

I don’t use Uber, but my daughters do – regularly. The younger one, a journalist, often makes her 6 a.m. workday start time by climbing into an Uber car in Brooklyn at around 5:30.

Do I want someone in authority to know something about the person driving her car? You bet I do. And do I want that car to be insured 24/7? Likewise.

This doesn’t make me an old fogey, at least by New York City taxi standards. I’m very much in favor of deregulating the business, a process usually called “disruption” these days. Many cities could stand to have their current taxi systems disrupted.

But not all disruption is equally meritorious. The Mafia does business in a disruptive manner too, but I won’t invest in it if it ever decides to go public.

A lot of high-profile startups these days are taking illegal shortcuts in the name of “disruption.” Airbnb will turn the apartment next door to yours into a hotel – a hotel that doesn’t comply with zoning, safety, consumer protection or tax laws, that is. (Do you think most Airbnb apartments have a sign on the door pointing the way to the fire exits? I don’t.) Not only do such arrangements pose hazards to customers, they compete unfairly with businesses that do comply with the law. And the company has faced a host of legal challenges in various cities in consequence. Airbnb will need to either evolve to address these concerns, or it will eventually fold.

Uber, along with its competitors like Lyft, will face a similar challenge in the next few years. Those companies’ success has demonstrated there is a real demand for their services. But as the law begins to catch up, Uber will have to prove that it can meet that demand within the legal framework of the areas where it operates.

 

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