> Why do people support a single company (like in this case Uber) taking over the business of thousands and thousands of existing companies and hence monopolizing an industry?

In many cases (in USA at least) the industry is already a monopoly as it is. Uber is coming in and offering an alternative which is way better than the current yellow cab system. In many cities in America, getting a cab at 2am after the bars get out is nearly impossible due to demand, so you end up walking a few miles home because it's quicker than waiting around for a cab. Uber and Lyft have largely changed that. Furthermore, I don't think that there is some strong allegiance to Uber or anything, it's just the largest company of it's type now. I quite enjoy and use Lyft as well, and would definitely be open to anybody else who wants to enter the market.

Taxi companies may be small mom and pop businesses in some areas, but in most large cities in the USA, they are breaking the monopoly, not creating it.

I'm shocked at how often a "bar rush" is the primary example used to define it's utility. Keep it up and people will hate insular millennial techies even more. :/

Also note, even in the bay area, that once you leave the Big City limits the cab companies quickly become small business and not the monopolies we easily blame things on. It's those companies that are getting murdered and shit poured on them unfairly.

You really think "insular millennial techies" are most of the people who go to bars? Even in San Francisco I'm sure that's not true. And you really think it's true in Baltimore, or Cincinatti, or Omaha (all Uber cities)?

To the extent people "hate insular millennial techies", it is mostly because certain segments of the media tell them to. See eg. http://pando.com/2013/12/26/look-whos-gawking-inside-nick-de....

Regardless of whether or not the cab companies are monopolies or are small mom-and-pop shops, they provide a vastly inferior experience to Uber/Lyft/etc., whether due to availability at peak times, or just the general experience of hailing, payment, etc. That's why people are rooting for the new alternatives.

Whether or not Uber is "more" of a monopoly in some regions than the incumbent(s) is irrelevant.

   whether due to availability at peak times,

Just like we are going to see a lack of availability in slow times with Uber.

Perhaps it's just a function of where I live (SF), but I never see lack of availability at slow times, either. The most I've ever had to wait for an Uber has been ~10 mins. (Average is more like 4 or 5.)

Or, what it already has shown to be given the free market, fare multipliers. For better or for worse...

Very true. You don't even have to leave California to see there's tons of smaller taxis companies besides Yellow Cab. I used to live in Santa Monica and a quick Google Search shows dozens of independent taxis firms (about 3-4 of which I have used to get to LAX). Furthermore - who says that during 'bar rush' prices might not 'surge' so high that a simple 'black cab' ride across town ends up costing you more than your whole evening of pub crawling? It's not like there aren't numerous stories of those around: http://valleywag.gawker.com/470-uber-ride-cost-more-than-a-t...

Well... taxis are normally so expensive that people don't use them day-to-day except when they have no other choice.

> Keep it up and people will hate insular millennial techies even more.

In New York, it's not just techies using this.

It's also a pretty great alternative to driving drunk, which people end up resorting to when there is a lack of cabs and public transportation in an area. (Obviously not New York, but Uber would be great in a place like Dallas.)

"Unfairly?" How is it at all unfair? Uber and Lyft provide service that is more convenient than what their existing competition can, and if those businesses don't adapt, they will slowly lose market share to the newcomers. That's how business works!

The 'shit' here being Internet Rage on places like HN.

People on HN are "murdering" taxi companies by complaining about them?

If something can be "murdered" by mere criticism, then it deserves to be "murdered".

What if I old you it's possible to be influenced by considerations other than emotional appeals to help "the little guy"?

It's a good example because it could reduce drunk driving.

I wonder how long this extra availability will last. Meaning, cab companies are not in the business to lose money and probably staff appropriately. With Uber/Lyft being recent to the scene your bound to have a lot of new drivers who are trying to make a go at it. How many will be around in a year, let alone covering those "bar outings" that could benefit from service but don't have it.

Taxis are nearly worthless in SF. I've called them many times and they only show up half the time, and that's if they are open and serving your area. There's no penalty for them if they pickup someone else on the way to pick you up. I had to call 4 different numbers on a trip to Redwood city once. Sometimes they don't answer and sometimes they have no one in the area. I've never managed to hail one off the street as I do in NYC.

I'm happy if all the Taxi companies die because they aren't providing good service. Uber and clones let you tap a couple times on an app, know instantly without asking anyone if there are cars in the area because you see them on the map, and then watch the cab come to you on the map. If the driver has trouble finding you they call you. Then at the end payment is all automatic, you just get out.

I very much agree - having lived in SF for years myself. But you contradict your own point a bit by admitting that in NYC you easily can hail a cab off the street. So it's really not a global problem (as we are discussing Germany here) at all. It's a problem in some localities, especially in San Francisco.

And Uber solved that problem. For it's local market. The thing is - why would it have to 'disrupt' markets that don't really need disruption or solve problems in markets where those don't really exist? Yet with it's enormous funding and hence market power it can take over markets around the globe, where the dude trying to make a living with his 5-cab taxi company or the student driving his one cab on his own can never even remotely compete.

You can only street hail a cab in NYC if you are in certain select portions of manhattan, and it isn't cab rush hour or cab switch over hour. Good luck hailing a cab in the middle of queens at any time of the day.

I've hailed cabs in Queens. I live in Greenpoint and there are times that hailing a cab is quicker than waiting for an UberX, especially now that the green cabs are becoming ubiquitous.

Cab switch over hour sucks, but I've also been in a busy parts of Manhattan with plenty of Uber cars showing on the app yet can't get an Uber car to my location.

I've also noticed a drastic decline in the state of UberX vehicles in the past few months (I assumer from their aggressive recruiting effort). Used to be every UberX that picked me up was very clean and typically nicer cars (occasionally getting picked up by Range Rovers or Town Cars). Now quite a few of the cars are messier/dirtier than any cab I've ever been in.

I'll continue to use Uber and UberX when convenient, but I've cut back quite a bit because the drop in quality.

Also key point: some groups of people--namely, white people and rich-looking people--are much more likely to be able to hail a cab. That isn't an issue with Uber/Lyft, so far as I can tell.

So why can't we let Uber disrupt the SF market while still sticking to regulations in germany. The market and the problems of the market are obviously different. The most annoying thing about Uber for me is that they try to shoehorn a solution that fits large US cities on a market that's a bad fit. There's an app that does the same as Uber just for regular cabs. It's such a better market fit, Uber could have done the same, but no, that would be boring, they need to DISRUPT!

That app doesn't do the same thing as Uber, though. Uber's variable pricing model and liquid supply(that is, drivers who are encouraged or discouraged to participate based on current demand) encourages fleet sizes that will correctly meet usage. Really, it's an attempt to algorithmically reach an optimal solution for the given marketplace.

Ubers attempt may or may not be a good attempt at solving the problem of maximizing market efficiency, however it operates under the assumption that we want to optimize for market efficiency. The current system treats cabs like a utility and ensures fair access for everyone, a property that Ubers algorithm does not account for. It maximizes availability and access for the wealthier among us, a property that's at least in germany not as important as in the US. Bad market fit, as I said. MyTaxi operates whithin the framework of the current system and retains its properties while adding value and efficiency. It's obviously not as efficient from a market perspective, but that's a feature.

Now a system that combines the desired properties of the old system with better efficiency is certainly thinkable and desirable, but Uber is not that system, at least not in it's current incarnation.

Well it mostly maximizes financial returns (for the drivers and the company) by enabling up to 5x higher prices at 'surge' times.

How would you feel if your taxi driver told you: "oh sorry Sir - you want to drive home? Today that'll be 5 times as much as usual. We are kinda busy, ya know". Unthinkable for taxis. Accepting for the 'disruptor'. All but very rich people would rather wait a few minutes longer to get a taxi than to pay up to 5x as much as usual.

Those same people can wait a few minutes longer for the surge pricing to go down.

And in Germany it's absolutely nothing like that. The cars are nice (usually Mercedes or BMW), the drivers are always friendly, for years and years we've been able to use an app to get a car in minutes. This is in large part because the city enforces it. So what's to disrupt ?

Exactly. A week ago I was having lunch at Munich airport waiting for my flight out. It was right where the taxi queue is - so I had a good view on what kind of vehicle is coming to pick people up. The VAST majority were nice, new, clean-looking E-Class Mercedes. Well. It they weren't black. So I guess that's the only difference. And the price.

at 7am outside the club there are 12 taxis waiting for people to come out.

Das sollte reichen

Two remarks to your comment:

They haven't only closed the doors for Uber, they have prohibited Uber and any other potential competition. Thus, perpetuating a cartel with huge entry costs.

Uber's prices are competitive and they are allowing potentially anybody to become a driver, hugely increasing supply. The service they offer is much better than that of a Taxi; no Uber driver has ever tried to trick me or gotten lost. On top of that, if the 20% cut that they take is too much, don't worry, competition will show up.

Really, Uber's "monopoly" is a momentary phase and any regulator should be able to see this.

> Thus, perpetuating a cartel with huge entry costs.

The key difference being that in germany at least, there is no such thing as a cartel with huge entry costs. You'll need a properly licensed car, commercial insurance and a special drivers license that costs about 250 EUR plus a few weeks learning. (my uncle got his license in a week while at the same time going to university). Then you can be a regular limo-for-hire driver. If you want a step up and become a cab owner, you need to paint you car white and spend a few hundred euros for the license (don't have the exact numbers ready) and fill in some forms. Then you're a cab company. Everyone who wants to in Berlin can be a cab driver. Used to be a typical student job and there's still a lot. There's no lack of supply. It's not like in NY where you pay a million USD for a medallion.

Exactly this! And that's exactly why a global 'disruptor' doesn't really make sense, because there isn't so much to disrupt. Uber grew out of a very local need (in San Francisco), which ended up translating quite well into other US markets as well as some international ones.

Frankly it didn't translate so well in many other international markets. The Germany example is a great one where tons of small taxi cos co-exist peacefully. Many other markets like Turkey are the same.

But even if you have large established companies, that isn't always such a bad thing that needs 'disruption'. I had a 50SGD coupon to try Uber (Black) in Singapore last year when I was at a conference. I took a Comfort Taxi to the conference (booked via app, taxi arrival 3-4 mins, took me straight to the right hall of the conference center in 20 mins. Cost about 18SGD) and then took Uber back to downtown. Uber ended up costing me over 70 SGD (i.e. even with the 50SGD coupon it was more expensive than the taxi). I had to wait 15 mins for it to show up (the app showed 5 mins away, but the driver drove in circles and couldn't find my location even with GPS, driver barely spoke English, driver didn't know one of the main streets downtown that I was going to, so I had to direct him). You can book taxis via phone, SMS, web or app. They are cheaper than Uber. Taxis are clean, regulated, always use meters, accept NETS and Credit Cards and if you want a nicer one you can get a Chrysler or Daimler for a little extra fee. Nationally regulated 'surge pricing' exists too.

To be fair, counties or cities can limit demand, but they're limiting demand to "these current 200 tiny companies because with 10 more, no one can make a living anymore", not to "that big juggernaut and nothing else". The law actually demands it (both limiting for economical reasons and spreading the load).

And the reason for why they interfere in such a way is that taxis are considered a mode of public transportation, which was declared at some point a county issue.

Thanks to that we also don't have that mess of three different types of uncoordinated local railway and bus systems that the bay area "enjoys".

(not Xylakant but in general:) Please don't assume your third world style problems also apply to everyone else. (like Uber and their fans do with that endless "taxi mafia" nonsense)

I don't think that's the whole truth. Berlin is still special in Germany and has a high cab density.

Actually you need a cab license to drive a cab in most german cities. And the number of these licenses is limited by the city. While the German taxi system is in dire need of a reform most people believe Uber is not the answer.

UberBlack is operating legally as "Mietwagen mit Fahrer" which is less regulated (doesn't need the taxi license), but UberPop doesn't even fulfill those lower requirements.

I'm rather skeptical of your claims - the courts decided against Uber because Uber drivers didn't have taxi licenses. If licenses were so easy to come by, I can't think why Uber would even bother going to court, they'd just get licenses! There's obviously a significant barrier there.

edit: Just to be clear, the service in dispute is UberPop.

Anyone can get a taxi license as long as they fulfil some (basic, really) conditions.

To get the taxi license you have to show that you and your car are fit to drive and that you probably will not cause too much damage in the process. That means taking exams, regularly having your car checked (there is a difference between checks for commercial and non-commercial vehicles here) and having insurance that lives up to German standards (an insurance that pays 1 000 000 $ per accident like the one shown on that certificate of Uber's is a joke).

Not that significant a barrier but it keeps out the duds and the crazy. The whole process is easy enough so that supply well meets or exceeds demand in most German cities, even at strange times of day. Maybe Uber is too stupid? I don't think so...

Uber does not want any of that. They only want to have a clear path for the race to the bottom. They do not care about safe transportation, just about their bottom line (I would, too, if I had raised that amount of capital for what is basically a phone app). That's ok, they are for-profit, this is what they're here for. The Frankfurt court has done what it is there for. It has told them that, while rules are in place, they need to be followed. Uber had plenty of time to prove to authorities that they are OK guys. They didn't. They are not "disruptors". By not following regulations, they are, most probably, simply breaking the law and competing unfairly.

Of course you can be cheaper if you skip the background check, driving test and reliable insurance.

Well, Uber Black is the properly licensed service with professional drivers and properly licensed and insured cars. It's in operation and not affected by this injunction. There's some nitpick about whether they should or should not be allowed to pick up people from the street, but that's minor.

The service affected here is UberPop that allows any private person to use their private car with domestic insurance to pick up people and transport them commercially. Uber has decided that this is the market they want, but that's just not legal in germany. Private persons that want to just earn a little on the side won't spend the time and money to pass the test and get commercial insurance. Since UberPop targets private persons it's also an invitation to tax evasion, but that's a different issue.

Uber could restrict themselves to the legal business model but have chosen not to.

There is a barrier here and it separates the people that want to be professional drivers from the non-professionals. The professionals are allowed to transport people for commercial motives, the non-professionals are not. This separation exists in a lot of areas, for example when producing and selling food, construction work etc. If I want to provide a professional service that has an associated risk, I must pass some certification that shows I at least roughly know what I'm doing.

Ahhh, right, my bad. They weren't terribly clear in the article as to which entity they were talking about, and I'm used to seeing "Uber" by itself to refer to the original "professional" service.

It's a common confusion, even in the news. Avoiding the confusion is a good litmus test on how good the article about Uber is.

Why would Uber start actually following taxi law at this point?

Don't let facts get in the way of a good story.

You're completely missing that Comcast is a "monopoly" because its customers have no choice while Uber is becoming a "monopoly" precisely because people do now have a choice.

Uber is taking a huge injection of investment cash and spending it on technology, to a scale that these small mom and pop companies could never replicate. I still don't see that as a good thing in the long term - once Uber has cornered the market there is no choice left.

Uber is mostly present in major markets where Taxi companies are more of some sort of mafia than a mom and pop business. The truth is that these very same companies are present in smaller cities as well and asking a driver what he thinks of who's working for quickly shows that they share their hatred with their customers towards the terrible service they have to provide for very little money in return. These companies keep most profit, while Uber, Lyft, Sidecar etc... only take ~20%

By "mostly present in major markets" you mean SF? Or where?

Because frankly there are tons of cities around the world where the 'mafia' sort of business you describe is NOT who owns taxi companies. I haven't seen a statistic outlining in which parts of the globe taxi 'mafias' own the majority of a market vs small-business owners. Have you? Please share.

A few years ago, I tried to launch a service back in France similar to all these ride sharing companies that work with taxis rather than private drivers ( I guess the most comparable in the US market would be FlyWheel ). Things went downhill for us pretty quickly but I learned a lot about the taxi industry, how universally bad it is and why. In most countries you go, you'll notice that getting a cab is not a great experience. Small cities ( very roughly less than ~100k inhabitants ) have local companies. They're ran by local businesses that mostly depend on the quality of their service to survive. They also need to provide an ok job for their taxi drivers. This is why the service is usually more reliable and the quality of your rides is typically higher. Larger markets are much more interesting and suffer from monopoly, which often leads to what can be called mafia companies. The taxi industry is old. Very old. Small taxi companies grew from a few cabs to often controlling a third of the city they're operating in ( sometimes even more ). Laws restricted smaller guys to get into business over the past decades which we can probably put on lobbying. The lobbying part is always difficult to prove but simply looking at the stats talk by itself. Medallion are universally so expensive that taxis are forced to go through these companies that already control the market. This is a quote from wikipedia regarding NYC medallions : "Because of their high prices, medallions (and most cabs) are owned by investment companies and are leased to drivers (“hacks”)" : https://en.wikipedia.org/wiki/Taxicabs_of_the_United_States#... . This is more representative of the US and a few european markets but it points out why many of these companies have been running without any competitors for half a century. Where it gets interesting is that many cities have just as many medallions today available for purchase as there were 50 years ago when the market was half the size. So why can we define these companies as Mafia ? Well it depends. Sometimes it is actual Mafia ( in South Africa you might feel safer in a township rather than in a taxicab, no joke. ). On more developed countries, these companies simply have control on our local governments. Las Vegas is the perfect example : taxi drivers are pissed because they're not getting paid crap and are even being taken a percentage of their tip ( either they get one or not ) based on their fare... When it comes down to introduce competitors ( Uber, Lyft, Sidecar etc... ), it usually is a lengthy battle since these companies refuse to match what the taxi companies pay our local governments. I could go on and on but every market has their own things going on and iterating over old legislation rather than keeping up with modernity put the taxi industry in a very bad place.

Anyway, sorry for the long answer. I currently work to one of the major ride sharing companies (I won't mention which one but this time I'm working with private drivers instead of actual taxis), and I'd love to share some of the stats we often have access to but it's obviously confidential...

Actually - thanks a lot for your answer. I'm always glad to learn more about markets and/or an industry I don't know much about myself. Much appreciated!

Taking cash and spending it doesn't provide you success on its own. I am all for the mom and pop companies, but in this case Uber provides a way better service. People are choosing it not because Uber has spent its money, rather because it provides a great service for their customer's money.

You're completely missing that Uber would probably love to eventually become that sort of "only option in town" monopoly.

He isn't missing anything. Your point is invalid until Uber actually uses the state to enforce a monopoly a la Comcast.

Preventing monopoly creation is an important regulatory task. Fighting them after they are powerful takes years, often dozens of years.

I'd generally prefer things not get to the "too late!" stage.

in the US, we generally believe in "innocent until proven guilty" - especially before banning an industry

They are obviously in violation of German law. What exactly is it you're arguing here?

miss? so would almost any company, it's moot.

Comcast has a monopoly because regulations and high costs of infrastructure make it difficult for competitors to emerge. Somehow you think they deregulation of the taxi industry will recreate this situation. Cost of a car and the regulations gone? You've already called a uber monopoly?

Uber has taken $1.5 billion in funding, which they're using to lock up as many drivers as they can to create those sorts of barriers to entry. No one wants to use competing apps with a small handful of drivers - they want the one with a car right around the corner.

The tough thing is that while they can provide a better service (let's qualify that - cheaper, faster, easier to book) they don't do what taxis need to do to be useful - objective model for when they can and cannot refuse a ride, effectively guaranteeing service by some provider.

If they run taxis out of business by stealing the cash cow of inner city rides but don't replace that somehow then that'd be the worst kind of disruption - disrupting the customer in a horrible way.

And if you're in the inner city and get the better service from Uber nobody can blame you for using it. But I can definitely see why regulators have genuine concerns around the people served by taxis who won't be worth ubers time.

> But why would there have to be a company that owns the market globally - from Karachi to Karlsruhe, from Amsterdam to New York, taking 20%, killing competition by it's pure überstrong market presence, brand and financial backing.

So you would like to increase competition by preventing Uber from competing?

They can still compete - but just like everyone else, they have to do so in accord with local law.

If their business model is illegal in Germany, tough luck - consulting a lawyer before launching a large-scale business operation is generally considered a good idea.

> If there was an app that consolidated the booking process for those - awesome!

Hailo?

Mytaxi works pretty well in Germany. They basically offer the same kind of functionality like Uber while making use off the existing drivers.

I came here to say that, MyTaxi is great, and most of the drivers love it too.

MyTaxi just got bought by Daimler!

You compare two different types of monopoly. It may be true that Uber will "monopolize" the market regarding the amount of suppliers, but: You always can use potential future alternatives.

Those small taxi organisations who are defending their market share in Germany right now do that not by better service or lower prices but by lobbying through their state protected cartells.

This causes German taxis to be awful. Often they want to talk to you, are dirty, expensive and play poor people pop on interrupting volume.

I haven't seen anyone supporting the elimination of existing taxi companies, other than what might happen through market competition. Most people who welcome Uber don't think that only Uber should be allowed to do ridesharing, but Uber makes most of the headlines because it's the largest player. Sometimes, I will carelessly use "Uber" to refer to the entire ridesharing-via-cell-phone industry, because it gets verbose to say Uber/Lyft/Sidecar/etc. every time.

Well your argument doesn't just apply to Uber. Why do people support any large businesses if they are all necessarily monopolies that kill small competition?

Very true. And people later often come to regret it once monopolistic tendencies start to settle in. Having healthy competition is rarely a bad thing.

You hit the nail on the head. Even here in Bolivia I can call up about 30 different cab services to pick me up.

Monopolies are monopolies only when the State supports them.