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Tuesday 16 December 2014

Uber – Wheels Are Coming Off

[Update at end of post]

It is less than four months since Conservative Home’s latest purveyor of Famous Last Words Mark Wallace sniffily rebuked my suggestion that driver and rider matching service Uber was not on the side of the little guy by stating “Have you ever taken a journey by [Uber in London]? Drivers work for themselves under better conditions with a better income”.
 Better than what? Ah, but one should not test the word of the great Wal, especially after London’s UberX drivers – which means most of the total – had a 15% pay cut imposed on them, and realised that, far from experiencing the liberating effect of the new sharing economy, they had become Prisoners Of The App, mere pawns in the increasingly dirty game waged by CEO Travis Kalanick and his pals.

The only other significant change from August is that the then best estimate of Uber’s value of $17 billion has been revised upwards to a whopping $40 billion, so my contention has been reinforced somewhat. But in the meantime, across Europe and further afield, Uber has discovered that its campaign has progressed not necessarily to its advantage.
Famous Last Words indeed

While Uber drivers in the UK and across the USA have had pay cuts imposed on them, at least they are still on the road. In several other countries, Uber has either suspended its operations, or has been banned by the authorities. And the place where bans are spreading fastest is in mainland Europe: while Uber appeals attempts to ban it in Germany and Belguim, it has failed elsewhere.

It’s been banned outright in the Netherlands. Added to the roll-call recently was Spain. And now UberPop, the local variant on what is called UberX in London, will be banned in France from the start of next year. There has been action against Uber in both Denmark and Norway. How Kalanick and his gang will respond may be to carry on in defiance of the law, as it appears to have done in the Netherlands.

However, and here we encounter a significantly sized however, Uber has left itself open to fines of up to €100,000 for each prosecution in the Dutch courts. And the news is little better elsewhere: Thailand has also banned Uber, and in India, following an allegation of rape against one of its drivers, the company has voluntarily suspended operations. And, to be on the safe side, it’s also been banned.

The situation in India was made worse by Kalanick trying to offload blame onto someone else for Uber’s failure to carry out background checks on its drivers. He is now finding out that being aggressive, flouting local laws, and waving his big wad of cash are not necessarily the right ingredients for winning over Governments in countries where the App fetches up.

Could Kalanick and friends organise a piss-up in a brewery? Perhaps not.

[UPDATE 1900 hours: Uber's ability to garner foot-in-mouth publicity notched up another glorious failure during the Sydney siege, when the App instigated surge pricing and a minimum fare of $100. With many trying to get out of the Central Business District, there was instant bad PR.

As Wired has put it, "even though Uber didn’t intentionally do anything sinister, the company’s public image has grown so tainted in recent weeks and months, that the public actually believes it’s capable of doing something like this"]

1 comment:

Bob said...

They also had a PR disaster in Australia