Uber has had a very brutal collision with political and legal realities, according to some recent news articles. The “car-sharing” app is having a very hard time selling its service to new cities.
The most disturbing Uber crash occurred in Eugene, Ore., where the service has effectively pulled out of town. Uber left town because it faced fines from the city for operating without a license. It seems the service has refused to get a license.
Uber had launched in the city on July 23, but suspended service on Oct. 30, right before the Halloween holiday, The Register-Guard newspaper reported. Interestingly enough, the city of Eugene, which also manages the licensing for taxis in the suburb of Springfield, issued a notice of violation against Uber on Oct. 20, the same day Uber was actually advertising for more drivers in Eugene.
Labor Dispute could be Developing at Uber
Uber may face other problems from its drivers. Forbes contributor Ellen Huet reported that the service can fire a driver at any time for no reason. Huet pointed out that Uber was firing drivers who were criticizing the service on social media. She noted that one Dallas-area Uber driver lost his job after Uber CEO Travis Kalanick noticed the man was complaining about fare cuts. In Albuquerque, Uber was forced to rehire a driver named Chris Ortiz after local media picked up the story of his firing.
Huet’s column reveals what could be the beginning of a very nasty labor dispute between Uber and its drivers. She noted that many of the drivers could lose their income completely and are essentially at Uber’s mercy. If that doesn’t sound like a formula for a classic labor management war, I don’t know what is.
Then there’s Washington D.C., where Uber has had to buy $1 million in insurance coverage for each of its drivers and conduct criminal background checks on drivers. Uber has also accepted the regulation of the D.C. Taxicab Commission. It’ll even have to get its cars inspected to operate in the nation’s capital.
It is unclear who will pay for the criminal background checks and car inspections, but given Uber’s history, it’ll probably pass the expense onto the drivers. That’ll just add fuel to an already raging fire because a lot of Uber drivers are already very unhappy with the service.
Nevada Impounds Uber Drivers’ Cars
Uber has also managed to enter the potentially lucrative Las Vegas and Reno, Nev. markets through a lengthy legal battle. A court in Nevada refused to grant a restraining order that would have kept Uber out. Nevada’s Attorney General had asked for the restraining order because she thinks Uber violates the state’s taxicab regulations, but a district court judge disagreed and dropped the order.
The judge’s action did not stop the Nevada Transportation Authority from impounding at least 15 Uber drivers’ cars. According to The Reno Gazette-Journal, state investigators actually posed as Uber customers in order to catch the drivers.
It looks like Uber is in legal limbo in Nevada and will be for the foreseeable future. A number of court hearings are scheduled on the service, which means the matter will have to be settled by a higher court. That means months of appeals and high legal bills for Uber.
Next generation technology might make it easier for Uber to share rides, yet it doesn’t help Uber around the law, local politics, and bureaucracy. The war between Uber and the taxi cab industry and its allies in local government is far from over.