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.