For Republicans who claim to be the party of more innovation and less regulation there’s nothing better than Uber.
The hot car-for-hire service is a prime example of what happens when creative entrepreneurs are left unfettered by government intrusion, Republicans say. In just five years, Uber has gone from being a small San Francisco start-up to an $18 billion company operating in 162 cities in 42 countries.
Uber is a simple app: it connects drivers—ranging from professionals to regular folks looking to make a few extra bucks—with people looking for a ride. It’s entirely cashless -- once a ride is over, the fare and tip is charged to the rider’s credit card. The system allows riders and drivers to rate each other, meaning that only the best drivers stay on the road and the best riders get picked up faster.
Republican stars have been lining up to praise Uber as an example of a business that’s been able to flourish with little government oversight.
“Regulations should never be is a weapon that is used by connected and established industry to crowd out innovation and competitors. And [Uber] is a real-world example,” Florida Sen. Marco Rubio declared at a visit to Uber’s D.C. offices earlier this year.
Added Kentucky Sen. Rand Paul on Glenn Beck’s radio show last month: “Big government and protectionism of old business and rackets is up against (Uber).”
Uber users are precisely the kind of voters the GOP wants to attract, too – young, hip, and at ease in a digital world. Last week, the Republican National Committee launched a petition against unspecific government overreach, in support of “companies like Uber” and requesting information from young Uber fans, suggesting they donate money to the GOP.
“Everyone right now likes to point to Uber and what it has offered, and that’s just one example, that’s where we need to be the party that is embracing what technology can offer,” House Republican Rep. Cathy McMorris Rodgers said in an interview posted earlier this week.
Uber doesn’t just embody Republican ideals -- it’s also a unique sort of test case of the party’s policies and ideals.
Since its founding, Uber has drawn the ire of organized labor. Earlier this summer, taxi drivers in Washington and all across Europe gridlocked cities to protest of the service, saying Uber was flooding the market with a lesser product, eroding the industry, and making it harder for them to earn a living.
Joel Wood, a Teamsters organizer who works with the D.C. Taxi Operators Association, said Uber has cut taxi drivers’ profits by 25-40%, leaving drivers to work longer hours to make the same wages.
Wood also noted that Uber drivers don’t have to pay the same fees taxi drivers do, including airport and road taxes and commercial car insurance.
“Our taxi drivers here do not mind competition here,” Wood said. “But to compete you have to be at a semi level playing field.”
Uber, not surprisingly, dismissed Wood’s claims.
“We’re doing it better. The experience is so superior,” Uber spokesman Lane Kasselman said. “Our drivers don’t have to pay ridiculous fees. They actually get to earn a living wage. Those criticisms are inaccurate and largely pushed by the taxi industry.”
Kasselman said Uber’s insurance policy—which offers up to $1 million for any accident that occurs during an Uber ride—is far better than commercial insurance protections. Wood responded, noting that an Uber driver who gets into a crash isn’t covered as well as traditional taxi drivers -- for the most part, Uber’s policy only covers drivers while they have a passenger on board. In California, there are two bills pending in the Legislature that would change how these insurance requirements work.
Kasselman said that if municipalities want to force Uber to adopt some of the taxi drivers’ regulations—like those airport and road taxes—the company will adapt.
Wood, however, finds the company’s portrayal of its own business perplexing: “If I got a food truck and said I’m not a restaurant, I’m an app, the health department would shut me down,” he told msnbc.
Critics also say Uber’s background checks and monitoring don’t match up to the regulations instituted by local taxi administrations, pointing to several alleged crimes. A 20-year-old passenger accused a Washington Uber driver of rape; the driver was arrested but not prosecuted. A Chicago woman sued Uber for a driver she said had molested her. And a man reported he’d been kidnapped and taken on a high-speed, crazy ride through D.C.
Uber has responded to each incident—often suspending the offending drivers—and drivers must maintain strong ratings to keep their jobs. Kasselman said the company’s screening process is superior to traditional cab companies and that even former taxi drivers wishing to move to Uber aren’t always approved.
“I don’t see any comparison where a taxi is any better than an Uber for a local government and for the community,” Kasselman said, pushing back against criticisms that Uber is depriving local governments of taxes from the regulated taxis or that the community is hurt by choosing a less-regulated product.
Some municipalities have, in fact, forced Uber to conform to local regulations--in New York City, for instance, all Uber drivers must be licensed by the taxi administration, so they're fully vetted the same was yellow cab drivers are.
California resident Brad Parker summed up the Republican view of Uber – and its pitfalls.
Parker said he had recently taken a taxi from the Houston airport to a family wedding while his son chose an Uber instead.
“How do you know how safe their car is? What kind of regulations are they avoiding that we would want?” Parker asked in an interview with msnbc. “If these people running these services – I’m sure they’re good people – what taxes are they bypassing that help support the roads and airports?”
Parker, 63, said the GOP “are big fans of’ ‘Let’s not having any regulations’” and Uber has adopted that view.
“If it hasn’t already [shown the pitfalls of anti-regulation], it will,” he said.
Parker, a musician, likened Uber to the early surge of music sharing online, where eventually regulations made it easier for consumers to actually pay for their music and for federal agencies to crack down on illegal sharing.
It’s an industry disruption Uber co-founder Travis Kalanick is quite familiar with; one of his earliest start-ups, Scour, was an early music file-sharing website in the late 90s. It fell apart after more than 30 companies sued them for $250 billion for copyright infringement.