That we should
NOT legalise UberB Grade Round 1 Negative
2016
Those who do not learn from
history are doomed to repeat it
Taxi regulation was introduced in the 1920s. Markets were
flooded with taxis, which led to:
declining fares,
long hours for drivers,
dangerous cars, and
inadequate compensation for accident victims
Market entry was restricted and fares were regulated,
which helped to ensure that operators could make a living;
in exchange, operators had to follow certain safety,
insurance, and service requirements—and, later, non-
discrimination rules.
Let’s clear up some
terminology.
Ride sharing suggests that people are carpooling. This is
NOT what Uber is.
For all intensive purposes Uber is like a taxi or limousine
service. We should look at what they actually do, not
what they say they are.
Uber is a company that provides people with individual
transportation to-and-from one place to another at a
time of their choosing for a fee.
It is better described as a ‘ride-hailing’ service, which
is the same as a taxi.
Recap: Why does Uber cost
less?
Uber is able to charge less because:
Cars do not have to meet the same standards of safety and sustainability that taxi vehicles do.
Drivers receive no training and it does not have to check their competence to be drivers (i.e. no testing).
Cars are not fitted with tamper-proof security cameras that are a government mandated security measure (found to reduce crimes both by and against drivers) for all taxi services. Cost: approx. $3,000 per vehicle.
They do not have to purchase the FULL insurance required to protect their customers and other members of the public during COMMERCIAL activity. Cost: approx. $9,500 per vehicle per year.
They do not have to pay the $22,000 taxi licence fee.
Uber avoid paying tax (even GST)
Recap: Why does Uber cost
less?
So Uber charge less because:
Their cars aren’t checked to make sure they’re safe
There is no formal quality control of their drivers
They lack basic security technology that has been found
to be necessary to reduce crime and improve safety
They don’t have to look after anyone when things go
wrong. Good luck guys!
Less money back into the public purse via licence fees
and tax, despite Uber’s use of public resources like
roads.
Argument: Uber is about creating
a monopoly, not competition
Uber is not abut creating competition. It is about destroying competition.
It can do this by creating an UNLEVEL PLAYING FIELD as it does not abide by government mandated regulations that all other operates need to follow.
It ENCOURAGES DRIVERS to BREAK THE LAW and IGNORE legal regulations by promising to pay any legal costs.
It’s business model is to create a MONOPOLY, with no competitors.
“Cashed-up companies like Uber use warm and fuzzy words but in reality they are about one thing – making money by exploiting drivers, exposing the public to risks and lying about their operations.”
Argument: Uber is about creating
a monopoly, not competition
More than this, Uber UNDERCUTS its competition to
drive them out of business.
Uber isn’t just making its own profits – it’s being
pumped full of money by firms like Google, Amazon and
Goldman Sachs so it can expand, run others out of
business and reap the profits.
This has happened across the USA, where they have
lowered their fares so much that they don’t even cover
the cost of fuel (Source: The Guardian). When they
drive their competitors out of business, they then raise
their prices.
Argument: Uber is about creating
a monopoly, not competition
When Uber establishes a monopoly in an area, it begins
to increase the amount it claims from drivers (20% to
30%), passes costs back to them for safety and
background checks. (Source: The Guardian http://www.theguardian.com/commentisfree/2016/jan/31/cheap-cab-ride-uber-true-cost-
google-wealth-taxation )
Regulation can help to break this. Governments can
prevent uncompetitive conduct, set
minimum/maximum fares and provide incentives for
other companies to enter into the market.
Counter-Argument: Monopoly
In Australia we already have GoCar as a competitor to
Uber. In America there is Lyft. There is competition if
you look for it, so it an exaggeration to say they have a
complete monopoly. (Note: Uber is worth $US62.5
billion while Lyft, the next largest, is only worth $US
2.5 billion)
Currently ride-sharing via apps (which admittedly Uber
dominates) only accounts for 6% of taxi trips in
Australia.
Counter-Argument: Monopoly
At any rate, it would be foolish to allow fear of a
possible, but unlikely, future monopoly to be used as an
argument against breaking up the current monopoly
that exists within the taxi industry, which deters
innovation and results in a worse service for customers.
It is unlikely that Uber can ever completely take-over
the industry. Taxis can adapt and become competitive
(turn up on time, improve service, etc.) and remain the
only service that can be hailed on the street, and with
self-driving cars becoming a reality it is likely that Uber
will soon face competition from Google and car
manufacturers.
This is an adaptable field that desperately needs
innovation. Uber is part of the sharing economy and is
at the forefront of a new technology wave. This is the
start, not the end, of a potential new industry.
Argument: Uber takes
advantage of its drivers
The Uber model results in inadequate labour standards.
There are no legal protections for drivers under Uber.
The company often acts unilaterally toward its drivers, changing terms and conditions at will, even when drivers have invested in cars in reliance on Uber’s policies.
All these problems stem from the fact that Uber uses a loophole to explore drivers: it claims that they are ‘independent contractors’, nor ‘employees’.
An ‘independent contractor’ is someone who agrees, by contract, to provide goods or services to another business. They therefore remain independent of that company, as they only do what their contract says.
This is a very dodgy loophole to be using.
Argument: Uber takes
advantage of its drivers
An independent contractor:
Has no worker protections (such as unfair dismissal)
Has no job security (Uber contracts say they can be
terminated at any time for any reason
Has no benefits (like sick leave, holidays, etc.)
Has to pay all of their own work-related expenses (like
cars, insurance, etc. – an employee has this covered by
the company).
In addition, Uber drivers have no ability to negotiate
their pay and conditions, as other independent
contractors can.
Half of all Uber drivers quit after less than one year.
Argument: Uber takes
advantage of its drivers
Uber claims that their drivers can make up to $US90,000
a year, and earn a lot more than taxi drivers.
THIS HAS BEEN SHOWN TO BE LARGELY FALSE.
This is because Uber drivers have to pay for their own
phones, data usage charges, petrol, insurance, need to
purchase and maintain their own vehicles, they need to
factor in depreciation of their vehicles, etc.
Brisbane and Gold Coast Uber drivers were found to
earn just $10/hour once Uber’s 20% share, GST, income
tax, car and phone expenses were deducted (well below
the minimum wage of $17.29).
Uber is exploiting loopholes that allow it to give its
drivers worse conditions.
Argument: Uber takes
advantage of its drivers
Regulation helps to solve this by enforcing minimum
standards in terms of pay and conditions.
Regulations include minimum and maximum fares.
Minimum fares prevent the company from “flooding the
market with drivers” after “promising that you can earn
a certain amount of hours” (in the words of one driver),
and offer some protection to drivers in terms of income.
Counter-Argument: Labour
Standards
People wouldn’t sign-up to be drivers if they didn’t think it
was worth it. Give them the choice to decide.
Uber reduces barriers to enter the taxi/drive-share
market, as people are using their own cars and everything
else is run through the app. This means that, if someone
thinks it isn’t worth it, then they haven’t spent that much
money getting into the market (i.e. they already had a car
and phone) and can leave.
This is very different to a taxi, where there are costly
licences, lost of excessive equipment, etc., that must be
purchased.
Don’t forget that some people really value the flexible
work that Uber offers (students, parents, etc. looking for a
little extra cash). This may not be possible to offer under
another model.
Counter-Argument: Labour
Standards
Firstly, let’s not forget that many taxi companies claim
that their drivers are ‘independent contractors’! They
don’t pay sick leave, entitlements or superannuation, and
receive much lower pay that employees covered by an
equivalent ‘award’.
Note: There was a 2013 Fair Work Commission case that now
casts doubt on this (it found that a taxi driver was an
employee, not an independent contractor, and was thus
protected by unfair dismissal protections), but this is still
unclear/a case-by-case thing. Conditions remain the same.
Counter-Argument: Labour
Standards
Let the market correct itself. If Ubers conditions for drivers are too bad, then people won’t sign up to be drivers and Uber will have to improve things if they want to continue to operate. If people are happy with being in control of their own work like this, then let them make that choice.
The numbers speak for themselves: over the past year, the number of Uber drivers has doubled. If conditions were really that bad, then there is no way that people would still be flocking to become drivers.
Let the free market set conditions. If people are happy to work for the conditions that Uber offers, then they should have that choice.
The alternative is that they are locked out of this market forever (due to the limited licences and high costs of entering the taxi market)
Arguments: Uber is UNSAFE
Note Uber’s disclaimer: ‘You understand that by using
the application and service, you may be exposed to
transportation that is potentially dangerous,
offensive, harmful to minors, unsafe or otherwise
objectionable and that you use the application and
the service at your own risk.’
We will look at the risk posed:
By drivers’ lack of insurance to users and the general
public
By drivers to users of the service
Argument: Uber places the public
at risk because of inadequate
insurance Taxi companies have comprehensive insurance policies
to compensate customers and the public should any
injuries, etc., occur. This is extremely important with
motor vehicle related industries.
Uber does not. Drivers are covered by their regular
(non-commercial) third part insurance. Uber provides
some commercial insurance, but it is limited.
This means that many incidents are not covered by
insurance.
Argument: Uber places the public
at risk because of inadequate
insurance Even if personal insurance does apply, all this means is
that regular, non-commercial drivers (ordinary members
of the public who also have insurance) are bearing the
costs for Uber’s commercial activity.
Option 1: we make the public pay, and let Uber rake in
the profits as we remain unprotected. This is unfair
because many people will not be covered, and instead
of Uber (and it’s users) paying its fair share, the public
is effectively subsidising its service.
Option 2: we regulate the industry JUST LIKE TAXIS by
making them purchase special insurance, keeping costs
within the industry. This will require taxis to comply
with existing regulations and will push up costs,
removing much of the distinction with regular taxis.
Counter-Argument: Insurance
This is a difficult one to counter, as there is an inherent
unfairness in what is being claimed.
Possible approach: the argument is of marginal
importance.
Most commercial claims can be covered by Uber’s
corporate insurance.
If there is a cost for regular drivers to bear, it will not
be overly excessive.
Ultimately the cost is worth the benefit (as seen in
improved service quality and lower prices).
Counter-Argument: Insurance
Uber offers more-comprehensive insurance coverage for
its drivers and riders than TLC requires. These offerings
include $100,000 liability insurance when a driver is
logged in to the Uber application, $1,000,000 liability
insurance when a driver is en route to pick up a
customer and on a trip, and vehicle collision insurance
for the entire value of the vehicle. TCL only requires
livery vehicles and black cars to carry liability insurance
of $100,000 per person and $300,000 per incident.
http://townhall.com/columnists/jaredmeyer/2015/09/
12/ubers-are-safer-than-taxis-n2050680/page/full
Argument: Uber is unsafe
because of its drivers
It is extremely easy to become an Uber driver. They are
regular people who have passed a basic background
check, have a valid driver’s license with a clean driving
record and third-party insurance.
Uber drivers have no special training.
There is no attempt to check people’s actual driving
ability or knowledge of the road.
Cars are not checked for roadworthiness.
Uber relies entirely upon their app and ‘star rating’ to
try and control the quality of drivers and cars. This is a
highly REACTIVE system.
Argument: Uber is unsafe
because of its drivers
While Uber claims to have background checks, these have been shown to be inadequate to catch people with past convictions for assault and dangerous driving, and fail to deter people from bad behaviour.
There have been more than a dozen allegations of sexual assault, groping, kidnapping and physical assault against Uber drivers. Many of these drivers have had prior convictions not caught by Uber’s background checks (see examples at the end of these slides).
The lack of proper regulation and oversight means that the public is entirely at the whim of Uber to regulate its drivers, which is dangerous given the vulnerable position that members of the public are placed in when using this service.
It is appropriate to have a government-mandated licence system in these circumstances.
Argument: Uber is unsafe
because of its drivers
There are no checks into the physical or psychological
health of their drivers. (yes, the app has a rating
system, but this only works identifies a problem after
something goes wrong)
There are no checks into the suitability and
roadworthiness of their cars. (they just require that the
car is less than 10 years old – condition isn’t important)
In comparison, taxi drivers are require by law to:
pass mental and physical health tests by a doctor.
have their cars inspected by mechanics every 4 to 6
months for roadworthiness to ensure they are safe.
Counter-Argument:
Law-breaking is not confined to Uber: there are also of examples of taxi drivers who have killed, assaulted, abused, raped or stolen from passengers.
Large, sophisticated firms can detect and root out internal lawbreaking far more easily than public authorities or outside private investigators.
Uber’s extensive driver database and user feedback system gives it a huge amount of data that other companies lack, meaning that, in theory, they can respond more efficiently.
The driver-rating system offers far more feedback and information than taxi companies offer.
Let’s not forget that the biggest deterrence to serious offending by drivers isn’t losing their taxi licence – it’s being arrested and going to jail. The criminal law applies equally to taxis and Uber drivers already!
Counter-Argument:
Uber offers a different form of safety and quality-
assurance: one which is uniquely market driven.
One of the reasons why Uber is so popular is because
users say it is much safer than taxis are.
Regulation should only be imposed if the industry proves
itself unable to regulate itself.
Argument: Uber violated
people’s privacy
What does the Uber app track?
Your geolocation data: where you are travelling from,
where you are travelling to, when you are travelling and
how frequently you make the trip.
What does an Uber driver see?
(until very recently) Rider’s name
Rider’s phone number
Pick up and (once they pick you up) the drop off address
Argument: Uber violated
people’s privacy
Through the app, Uber collects a huge amount of data about their passengers: where you go, when you go, etc. This can create a lot of problems for journalists, public officials, or anyone who doesn’t want their every move tracked.
A senior executive at Uber suggested that the company should consider hiring a team of opposition researchers to dig up dirt on its critics in the media — and specifically to spread details of the personal life of a female journalist who has criticised the company.
This was an implied threat to exploit their geolocation data in order to attack critics and violate their privacy.
Some of this data is also made available to drivers. More data is available to drivers via the app than a taxi driver would receive about a fare (i.e. Uber drivers can receive the full name, etc., of the passenger, etc.).
Counter-Argument: Privacy If there is an issue then it is with the app, not the service, and it
is currently entirely legal to share this information. This is not why Uber is banned.
In reality, this is very similar information to what a taxi driver would be supplied with, especially with a phone booking (you need to give a name, they record your number and you still need to give a drop-off address).
The incident with the female journalist speaks more to Uber’s executive’s arrogance and lack of media savviness rather than a genuine attempt to exploit people’s privacy – they never acted on it and the negative publicity it would generate is reason enough to keep them from doing so.
This data is no different (and in reality is a lot less) than what companies like Facebook, Google and Apple gather about their customers. It is being used to improve the quality of their services. What is the real problem here?
These things can (and have been) addressed without the need to ban – Uber now no longer shows people’s names (and it was only ever the first name). This was done to avoid drivers ‘cherry-picking’ customers of a certain gender or ethnic background.
Argument: Uber pays very
little tax
All people and companies pay tax. Uber uses roads and infrastructure that is paid for by the public (via tax) in order to run its business and make money. It is only fair that Uber should pay tax on the money it makes.
Currently Uber claims that it is ‘not profitable’ in Australia. This is because it sends it profits to the head office in the Netherlands, who then pays a ‘fee’ to the Australian business. Essentially this is just a tax-minimisation strategy. Uber won’t even release how much tax it pays (presumably because it’s very low).
Uber also currently doesn’t want to pay GST on its service. All goods and services incur a 10% tax in Australia, which goes to the government. Despite having no real reason not to pay this (except for the fact that they would need to increase fares by 10%), they currently refuse to do so.
Counter-Argument: Tax
It is even more difficult to tax a company that doesn’t
exist or is made illegal!
The best approach here is to make Uber legal, impose on
them the same tax obligations that other technology-based
services like Netflix, etc., are made to pay.
Plenty of companies try to minimise tax. This is a question
of enforcement, not making something illegal. We don’t
make an entire industry illegal just because some
companies try to minimise their tax. Better enforcement is
the key. Even with a 10% increase in costs, Uber is still
cheaper than taxis by a very substantial margin (approx.
30%)
Apple, Facebook and many other technology companies do
exactly the same thing. Should be make them illegal too?
Example: Uber driver kills girl, not
covered by insurance, passed
background check despite offences
January 6, 2014: San Francisco Uber driver Syed Muzaffer struck and killed a 6 year old girl. Uber claimed that he was not technically logged into his app at the time (witnesses say he was trying to log into the app, which could have caused the accident) and refuses to use their insurance to cover the accident. Because Muzaffer’s regular insurance didn’t cover pedestrian accidents, the family will gain no compensation.
Muzaffer already had a reckless driving conviction (something that Uber says its background checks catch), yet he was still able to pass their background check.
Uber’s argument was that “they provide a service not a product” (i.e. they provide the use of a smartphone app, not the resulting trip) and thus should not be held responsible for the actions of their drivers.
Example: Uber driver has assault and
drug convictions, passes background
check, assaults passenger
Daveea Whitmire pulled over, told his passenger to get
out, and then, when the passenger tried to take a photo
of the car, punched him in the hand and elbowed his
chest.
Whitmire had multiple drug-related felony convictions
and was at the time of the assault on probation for a
separate battery charge.
Despite this, he passed Uber’s background checks. Uber
simply said that their background check process was
“top of the line” and refused to take any responsibility
for the driver.
Example: Uber driver kidnaps passenger,
takes them on 32km ‘joyride’, Uber refused
to admit a problem
When a woman tried to take UberX home from a party
in October 2014, a driver instead took her on a wild,
twenty-mile ride ending in an abandoned lot,
All the while, "the driver ignored her questions and
directions. They finally arrived in a dark, empty parking
lot in the middle of the night, despite her repeated
protests. When the tried to exit the car, her driver
locked the doors, trapping her inside. Only when she
caused a commotion and screamed did he finally return
her home." The ordeal lasted for "over two hours.“
Uber’s only response was to apologies for what they
claim was an "inefficient route" and partially refunded
her fare.
Example: ex-Uber driver harasses passenger
thanks to personal information that Uber
provides
A woman in New York lodged a complaint against a Uber driver after he acted inappropriately towards her by showing her photos that he had taken of her without her knowledge.
The driver was fired, but then began contacting the woman and her employer, harassing them.
Uber denied knowledge or involvement in how the driver obtained the passenger’s contact details and denied that they provided these details.
However, it later turned out that most Uber drivers are provided with the passenger’s name which, given that they then know where the person works and/or lives (due to pick up/drop off locations) makes it extremely easy to identify and contact them, making this a serious privacy issue.