Disclosure: I use Lyft fairly extensively and have used Uber a few times. I think that a number of Lyft's business practices are questionable and I hope that they get things cleaned up. If they continue on the same path they are on I will likely abandon the service.
Uber's business model originally was to summon a black limo to pick up you and your friends for the express purpose of impressing people. This also functioned as a way for rich elites to bypass taxis. This was actually pretty successful. Soon afterwards, a competitor was launched (Lyft) by a company then called Zimride. Lyft was launched as a platform to connect people to people with cars who could drive them places. As this was a 'ride sharing' business, and not a taxi service, they were able to skate around regulations for taxis and avoid paying numerous licensing and taxes. This enabled them to be priced lower than a taxi, and also provide a higher quality of service. Uber then promptly copied this business model and implemented it as well.
I believe that the business model of these two companies is superior to the current taxi model. I would also use these services were they priced the same, or even a little more than a current taxi ride. The reasons are:
- The companies have your billing information on file. This means you do not have to argue over fares or whether or not you have cash (many cabs in SF refuse to take you if you do not have cash, or will claim that their credit card machine is broken, etc (it is illegal for a cab to operate in SF without having the capacity to accept credit cards)).
- The drivers are (supposedly) interviewed and vetted before being accepted to the service (see this for an example of Uber failing to adhere to its own corporate policies in regards to this driver, and then failing to follow up until press exposure transpired). Additionally, when I was in Minneapolis for F+ Live, I was chatting with a Lyft driver who had not actually gone through a vetting/interview process.
- Drivers are rated by passengers after the ride. Drivers who fail to maintain above a certain rating are removed.
- Passengers are required to have personal information on file, so theft or assault against a driver will have them removed from the system/charges can be filed. 5) Drivers are using their own cars (double edged sword - creates insurance nightmare, ensures that a ride is actually safer).
All in all this results in a cab ride being a safer, more enjoyable experience. It also makes getting a cab easier and safer, as you flag them through the app. The whole concept of the companies not paying regulatory taxes because they are not taxis is horseshit and should be retroactively applied.
So now the reasons Uber is so terrible are articulated in the article pretty well, but to summarize.
- Uber has launched a "dirty war" against Lyft which has drawn a lot of sharp criticism from a number of different sources. See here.
- Uber's (and to a lesser extent, Lyft) standard business model is to launch in cities and then use the revenue/support they garner in order to pressure regulators to then make it legal. Another anecdote, a recent Lyft I took to the airport had the driver relating to me that they used to not be allowed to go to the airport (it was illegal), so they would have to put on a little show as though they were just dropping off a family member.
- This ad campaign in France, essentially acting like the service is also a prostitution service. This ties into a number of egregiously sexist things that have come out of the company's camp. Lacy's original post on the matter is pretty succinct. Please note, there have been no public disciplinary actions taken against any members of the company for any of the debacles that have happened.
So where does this leave us? We have a company that is one of the fastest growing in history (possibly the fastest ever) that has a number of extreme disciplinary and tone problems, and has done nothing to correct them. This can be taken as a good example of the dangers of the modern technology industry. Make no mistake, Uber is a company that is celebrated
for its success
. It has become a cliche in SF that any given startup's pitch is "the Uber for ____". This is creating a benchmark of how companies and their founders are to behave going forwards.