Super Pumped _ The Battle for Uber - Mike Isaac Page 0,49
charge enough to earn a decent living (and pay for the medallion.)
Then Uber showed up. The medallion system—a market based entirely on scarcity and exclusivity—was threatened to its core. With UberX, the company’s peer-to-peer service, anyone with a car could drive for Uber. That simple concept destroyed Big Taxi’s barrier-to-entry system, sending the price of medallions plummeting. In 2011, medallions in Manhattan were going for $1 million apiece; six years later, one fire-sale auction of forty-six medallions in Queens fetched an average price of $186,000 per medallion. Overnight, taxi drivers whose entire livelihoods were tied up in paying off an expensive medallion went underwater.
Cabbies were aghast. Doug Schifter, a livery driver from Manhattan, faced financial ruin after the rise of Uber wrecked his income driving for traditional car services. Schifter drove to City Hall in Lower Manhattan on a cold Monday morning in February 2018, put a shotgun to his head, and pulled the trigger.
“When the industry started in 1981, I averaged 40–50 hours,” Schifter wrote in a final post to his Facebook page. “I cannot survive any longer with working 120 hours! I am not a Slave and I refuse to be one.” From Uber’s early days up through 2018, more than a dozen other taxi drivers in New York and other major metropolitan areas also took their own lives.
Taxi drivers who didn’t give in to despair, however, fought back. Some tried to beat Uber at its own game by forming taxi alliances and creating their own apps like iRide, Arro, Curb, and others. But taxi operators soon found the best way to fight back wasn’t to compete with an app. It was to protect the turf they already had.
When Uber launched in a new city, taxi operators would often lean on their local transit agencies and taxi authorities, who would dispatch an official to Uber’s local headquarters. Armed with a thick rulebook and a scowl, officials in New York, Nevada, Oregon, Illinois, Pennsylvania, and other states would point out the rules and laws the company was breaking. The “Weights and Measures” book was supposed to tabulate the cost of a ride, they would say, not some complicated algorithm inside the Uber app. When that didn’t work, local legislators were known to dispatch city and state agencies to shut Uber down.
If none of these things worked, there was always good old-fashioned skull cracking. Taxi cartels in areas like Las Vegas and elsewhere had deep ties to organized crime, which meant serious and sometimes violent retaliation. Cars were stolen. Sometimes taxi owners would assault drivers and set their cars aflame.
In Italy, Benedetta Lucini faced pushback from local taxi thugs. As general manager of Uber’s Milan office, she worked overtime to convince Uber drivers to stay on the road, even as taxi operators would hail Ubers to their location, pull drivers out of their cars, and beat them.
Eventually, taxi drivers targeted Lucini. They plastered posters with a photo of her face on taxi stands across the city, along with the phrase “I love to steal.” On another occasion, cabbies threw eggs at her during a press conference. And one night when Lucini was returning home from work, she found a sign hung from a power line not far from her apartment. On the sign was Lucini’s home address, and a message calling her a prostitute who provided her “services” to Milan’s transportation chief.
And yet, under Kalanick, Uber didn’t flinch. As they struggled with local officials, Uber teams devised a playbook for evading crackdowns. Deregulation—a pure, free market, untouched by the corrupt hands of government and Big Taxi—was the ultimate goal for Uber in every city.
Barging into a market first gave Uber a major advantage. In Philadelphia, for example, Uber pushed headlong into the market illegally, much to the consternation of the local Public Utility Commission. The city would levy a $12-million fine on Uber for its 120,000 violations of the transit code. (The company settled the matter for $3.5 million.) By then it didn’t matter. Uber was up and running, having courted more than 12,000 new drivers and spinning up the demand for rides among consumers.
If transit authorities began policing transportation laws, local managers would blast emails and text messages to their driver corps, telling them Uber had their back. Kalanick viewed fines and tickets as just another cost of doing business. Text messages, like the one below, often promised full restitution from Uber if you happened to, say, have your car impounded by the police: