Tag Archives: Uber

Consumers Rule and Innovation Is Inevitable

I have been traveling for close to five weeks – it’s the “big trip” for my daughter’s graduation from high school, her eighteenth and my special birthday. When she was just a tiny tot in primary school I remember saying to her in passing. “You are growing up fast – all too soon I will be taking you to Paris when you finish high school.” And here we are – already.

Travel is completely different to what it was when I promised the trip. Everything is so accessible as long as you have a WiFi connection, though data roaming charges are astronomically expensive. We can plan our trip and find “where things are at” when we arrive in a town. TripAdvisor and Yelp have become invaluable in working out what to do and where to go – and finding things that really interest us rather than doing the tourist sites.

In the last three weeks I have been to New York, Paris and London. When I arrived in Paris we took a taxi from the airport. It was filthy dirty and stank of cigarette smoke, and when we arrived at our destination I discovered that I could not pay by credit card. We had just arrived in Europe and I had not yet converted currency – there was that horrible circumstance of then having to find a cash machine.

The very next day the taxi drivers of Paris staged a blockade of the airport and you could not get a cab anywhere in the city. They were protesting against Uber, the mobile booking engine for hired cars.

Amazingly customer responsive

When we flew to Paris from New York, I had booked a car transfer from Soho to JFK airport online to pick us up at 3pm, 4 hours before our flight. When the car was 10 minutes late I called, only to discover that the car was stuck in traffic and did not know when it could get there. My stress levels escalated: traveling with family and loads of luggage, we are more than a cab load. I quickly turned on roaming data, logged on to Uber and found a van 2 minutes away. I booked it, I watched it approach on my mobile, we loaded in and we were on our way. The traffic was heavy. Without Uber we would have missed our flight.

Fantastic customer care

A few weeks later, whilst staying in London during its wettest month on record, we found that the drinking water was really not good. We went to Tesco’s to get bottled water and they were all out. Clearly everyone in London knew before we did not to drink the tap water. Gastro hit our family group terribly. In fact I was so bad I had to get to hospital – Yelp to the rescue recommending a private hospital with casualty facilities not far away. Straight on to Uber and a car was at the front door in minutes, taking me safely and cleanly to the hospital – no fussing around looking for currency or credit cards, no waiting in the street under the rain trying to hail a cab.

Seamless customer experience

The week earlier in Paris, I was exhausted trying to catch the metro with loads of luggage. I needed to get to Gare de Nord for the Eurostar to London. I had given the last of my Euro to my daughter and didn’t really want to change more money. Again Uber to the rescue – quick, fast and efficient – and the payment straight on to my account with the receipt emailed directly to me.


In Australia for years we have had to pay the ransom of a 10% surcharge to use a credit card in a taxi – this is daylight robbery in the days of instant electronic transfers. This has gone on for years. Back in 2001 during the Olympics in Sydney Visa attempted to break the Cab Charge monopoly to force the reduction of the surcharge by pulling out of taxis – that is, you could not use a Visa card in a cab. Cab Charge won, insisting that people pay cash or use another card.

Fast forward 13 years and finally there is a glimmer of hope that the ridiculous 10% surcharge monopoly by Cab Charge may go away. Simply because now – finally – customers have an alternative. Uber is quickly increasing its network of regular cabs not just black cars.

In December, Isabelle Roughol wrote a post entitled Uber vs the World: When You Can’t Innovate, Regulate. Isabelle makes a great analogy with Napster: the music industry rallied to protect itself, as taxis are doing now in Paris, but innovation continued until the distribution of music was fundamentally changed forever.

At the moment there are more taxis than Uber cars and there are competitors to Uber such a GoCatch. And so there should be – we don’t want to move from one monopoly to another. But the customer experience is so overwhelmingly great – we have had a taste of good service at an affordable price. At some point customer demand will win over protectionism – it just could take a while.

Photo by Paul J. Richards/AFP/Getty Images

Brilliant: Someone’s Apparently Using Tinder To Collect Uber Referral Credits

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Yesterday, a somewhat sheepish TechCrunch employee forwarded the above screenshots to our team, showing what looks like an advertisement for Uber on dating app Tinder. The promotion offers first-time users $20 off if they sign up to Uber using a promo code.

There’s only one problem: The ad wasn’t placed by Uber.

Using the screen name “Uberly,” the advertisement promises new users a $20 discount on their first ride:

Tinder Freebies!
January: Free $20 when you download Uber
Just enter promo code 8177y

New accounts only, limited time offer. Tinder on ;)

We reached out to both Uber and Tinder about the account after we saw it, thinking maybe it was some sort of marketing campaign.

As Tinder recently began running its first so-called native ads for Fox’s The Mindy Project not long ago, and that Uber has done co-marketing partnerships with any number of different startups over the years, it didn’t seem totally unusual that the two would intersect.

Yet, there was something weird about the promotion. For one thing, the user name is “Uberly,” not Uber. Also, the childish photoshop doesn’t really match Uber’s ultra-sleek design aesthetic.

And from the Tinder side, it’s one thing to run ads of actual people like Mindy Kaling. It’s a whole other thing to promote a brand with a fake profile.

Anyway, an Uber representative tells us that the ad was not placed by the on-demand ride service after all. When asked where it came from, she suggested it was probably an Uber user trying to stock up on $20 referral credits using a personalized promo code, but couldn’t confirm it.

Tinder didn’t get back to us, but it’s a pretty safe bet that the account violates its Terms of Service, specifically the part about not “engag[ing] in commercial activities and/or sales without our prior written consent such as contests, sweepstakes, barter, advertising, and pyramid schemes” and the part about not “infring[ing] any third party’s copyrights or other rights (e.g., trademark, privacy rights, etc.).”

So why would a person do such a thing?

Besides the fact that it’s ingenious, one theory floated by the TechCrunch team is that sending an Uber to pick up your date is apparently becoming a “thing.” One TechCrunch staffer wrote:

I heard that its a new thing that girls are expecting to be picked up in an Uber. It’s the next version of having the guy pay for the check. On an unrelated note, I’m going to have to sell my organs for money.

This stirred up some debate within the team, with the more levelheaded among us urging our co-worker not to sell his organs. Another staffer said ladies expecting this type of thing would fall under his personal “Rule of People Not To Date.”

But then, we’re just a bunch of poor middle-income journalists trying to get by in a city of dot-com social media millionaires.

And we’re maybe just a little bit jealous we didn’t think of this first.



Uber Slashes UberX Fares In 16 Markets To Make It The Cheapest Car Service Available Anywhere

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Riding Uber just got a lot cheaper — at least for most customers using its low-cost UberX option. That’s because Uber has committed to slashing fares for its on-demand car service in a majority of U.S. cities where it’s available, in some cases by more than 20 percent.

Updated below with comment from Uber competitor Lyft.

The goal for Uber is not just to make its service more attractive than the competition, but to make UberX the cheapest option available period. That means undercutting fares for taxis and ride-sharing services like Lyft and SideCar, sometimes by a large amount.

This isn’t the first time the company has lowered the price of UberX rides. Since June of last year, when it cut rates in San Francisco, Uber has occasionally lowered fares in cities where UberX is available.

This is the most aggressive price cut the company has ever made, however, with Uber cutting rates in 16 of the 23 U.S. markets where the low-cost option is available. That includes reductions in Atlanta, Baltimore, Charlotte, Chicago, Dallas, Denver, Indianapolis, Los Angeles, Minneapolis-St. Paul, Nashville, Orange County, Phoenix, Sacramento, San Francisco, Seattle, and Tucson.

Some of those cuts are pretty dramatic. The price of UberX in Orange County, for instance, will drop by about 30 percent, according to CEO Travis Kalanick. San Francisco fares will be about 20 percent lower, and of the 16 markets seeing reductions, half will see cuts of 12 percent or more.

For a business that operates on low margins already, that’s a pretty dramatic reduction. And it will put a whole lot of pressure on the competition.

But that’s just part of the story. The fare cuts are also designed to make Uber more accessible to more people.

To demonstrate how it’s doing that, Kalanick ran through a couple of real-world examples with me to show how much cheaper UberX would be than the competition. In L.A., a ride from LAX to Hollywood, for instance, would cost $51 in a cab, but traffic permitting, an UberX would cost just $29.50. In San Francisco, a cab ride from the Mission to SOMA costs about $11, but an UberX would be just $8.

Combine that with a four-way fare split, Kalanick said, and the ride is the same price as taking the bus. All of which makes Uber not exactly a “luxury service” anymore.

With each previous reduction, Uber has seen the number of trips per driver increase, which means that even with the lower fares drivers end up making more money. In the case of this fare reduction, Uber is cutting its own margins in some markets to help push prices lower.

So how low can prices go? Uber wants to find out, but is aware that there’s only so much new demand it can drive with fare reductions. “There’s a ceiling to the number of trips per hour that a car can do,” Kalanick said.

Uber has said that it wants to offer a low-cost option in all of its markets, so you can probably expect it to expand the number of available UberX markets in the same way that it’s adding new cities in which it operates. That number is up to nearly 70 now, as Uber has moved aggressively into a number of international markets over the last year.

The company also has plenty of cash to play with. It raised $258 million from Google Ventures over the summer, bringing total funding to more than $300 million. Additional investors include TPG Growth, Benchmark, and First Round Capital, among others.

Update: When queried about Uber’s latest move, Lyft co-founder and president John Zimmer told TechCrunch: “Uber prices will still be higher. What does a price decrease mean when there is 8-10x surge pricing? It’s classic bait and switch and consumers see through that.”


Uber tries to win back goodwill by slashing UberX prices across country

Uber tries to win back goodwill by slashing UberX prices across country

Amid controversy over the death of 6-year-old girl and surge pricing during peak hours, Uber is attempting to win back your heart in a time-tested way — by cutting its prices.

Uber announced today that it is dropping prices across the country for UberX, the lower cost alternative to its black car service.

“What if Uber was actually the cheapest ride in every Uber city?” Uber CEO Travis Kalanick said in a blog post. “Some have asked how we do it. How can we keep getting prices down over time? More cars and drivers mean better coverage and lower pickup times. Lower pickup times mean better economics for drivers, and thus more drivers and cars.”

Screen Shot 2014-01-09 at 10.54.38 AMThe company is cutting UberX prices in 16 out of its 24 markets. The new fares are now up to 34 percent lower in Chicago, San Francisco, Seattle, Los Angeles, Phoenix, and Orange County. Minneapolis, Atlanta, Sacramento, Tucson, Denver, Dallas, Baltimore, Charlotte, and Nashville also receive price cuts.

Kalanick claims that on average, UberX is 26 percent cheaper than a taxi. He adds that the new prices also undercut competitive ridesharing services such as Lyft and Sidecar. He goes so far as to say that with the fare-splitting feature, it could be cheaper than the bus.

However Lyft CEO John Zimmer disagrees.

“Uber prices will still be higher,” Zimmer told VentureBeat. “What does a price decrease mean when there is 8x surge pricing? It’s classic bait and switch and consumers see through that.”

Uber is a popular app for hailing cars to you on-demand. It started out as luxury black car service and has since added SUV, regular taxis, and UberX, where drivers pick you up in regular cars. Kalanick built Uber’s brand around the ideas of professionalism, reliability, and quality. He is also known for being fearsomely competitive and doing whatever it takes to overcome regulatory challenges and edge out competitors.

But over the past couple months, Uber riders began complaining that the quality of the service has slipped, wait times are longer, and price spikes during busy times.

Kalanick responded earlier this week by saying that surge pricing is a method of finding the “market price” and necessary for balancing supply and demand. Hotel rooms or airline flights have dynamic pricing and people accept it, so why shouldn’t ground transportation?

“The price must go up for these rides to happen,” Kalanick said in a video interview with the Wall Street Journal. “If surge pricing doesn’t happen, there is no availability. You can’t get a ride.”

Whether or not it makes economic sense, no customer likes paying more (or feeling like they are paying more) for a ride.

Uber has some damage-control to do. And what better way to keep customers than by becoming the cheapest option in town?

This is the latest in a series of cuts. Uber lowered prices in San Francisco, Los Angeles, San Diego, and Washington D.C. last year shortly after raising $258 million in financing. The “ridesharing wars” between Uber, Lyft, Sidecar, Flywheel, and traditional cabs are heating up, and cost is a major battleground.

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Confirmed: Uber driver killed San Francisco girl in accident

Confirmed: Uber driver killed San Francisco girl in accident

An Uber driver killed a 6-year-old female pedestrian in a New Year’s Eve traffic accident in San Francisco.

Update: The driver was an Uber partner, Uber announced today in an updated statement. The company has deactivated his account. Earlier, Uber had said that if the driver involved in the accident was an Uber partner, the account would be deactivated. “The driver was not providing services on the Uber system during the time of the accident,” Uber said in the updated statement.

The statement may imply that the driver may have been in between Uber fares at the time of the accident, given it happened on New Year’s Eve.

Uber has positioned itself as a more tech-savvy alternative to the relatively hidebound and heavily regulated taxi industry. The accident could have big implications for Uber — and for ridesharing companies like Lyft and Sidecar — by giving taxi supporters ammunition for a political battle. It also raises questions about the company’s responsibility for the actions of its drivers.

Uber initially attempted to distance itself from the situation. A spokesperson declined via email to answer questions about the accident, offering the statement, “We work with transportation providers across the Bay Area, but we can confirm that this tragedy did not [Uber’s emphasis] involve a vehicle or provider doing a trip on the Uber system.”

The San Francisco Police Department later identified the driver as Syed Muzzafar of Union City, Calif. Muzzafar posted the $300,100 bail yesterday, and he will return to court on Jan. 7, a spokeswoman for the San Francisco Superior Court wrote in an email to VentureBeat.

In a phone conversation with VentureBeat, Officer Gordon Shyy of the San Francisco Police Department said the driver was booked for vehicular manslaughter.

Shyy told VentureBeat that he’s looking into the case and will release more information as soon as he can.

The news came in a report yesterday from ABC7 News, which attributed the information to police.

Earlier on New Year’s Day, the San Francisco Chronicle reported the death of Sophia Liu, 6, of San Francisco. The accident occurred at around 8 p.m. in the Tenderloin neighborhood. The car also struck Sophia’s brother and mother. All three went to San Francisco General Hospital after the accident.

VentureBeat will update the post if we receive more information on the accident or the company’s actions.


What Uber Will Do With All That Money From Google

Uber cofounder and CEO Travis Kalanick. Cody Pickens

When Uber cofounder and CEO Travis Kalanick was in sixth grade, he learned to code on a Commodore 64. His favorite things to program were videogames. But in the mid-’80s, getting the machine to do what he wanted still felt a lot like manual labor. “Back then you would have to do the graphics pixel by pixel,” Kalanick says. “But it was cool because you were like, oh my God, it’s moving across the screen! My monster is moving across the screen!” These days, Kalanick, 37, has lost none of his fascination with watching pixels on the move.

In Uber’s San Francisco headquarters, a software tool called God View shows all the vehicles on the Uber system moving at once. On a laptop web browser, tiny cars on a map show every Uber driver currently on the city’s streets. Tiny eyeballs on the same map show the location of every customer currently looking at the Uber app on their smartphone. In a way, the company anointed by Silicon Valley’s elite as the best hope for transforming global transportation couldn’t have a simpler task: It just has to bring those cars and those eyeballs together — the faster and cheaper, the better.

“Uber should feel magical to the customer,” Kalanick says one morning in November. “They just push the button and the car comes. But there’s a lot going on under the hood to make that happen.”

A little less than four years ago, when Uber was barely more than a private luxury car service for Silicon Valley’s elite techies, Kalanick sat watching the cars crisscrossing San Francisco on God View and had a Matrix-y moment when he “started seeing the math.” He was going to make the monster move — not just across the screen but across cities around the globe. Since then, Uber has expanded to some 60 cities on six continents and grown to at least 400 employees. Millions of people have used Uber to get a ride, and revenue has increased at a rate of nearly 20 percent every month over the past year.

The company’s speedy ascent has taken place in parallel with a surge of interest in the so-called sharing economy — using technology to connect consumers with goods and services that would otherwise go unused. Kalanick had the vision to see potential profit in the empty seats of limos and taxis sitting idle as drivers wait for customers to call.

But Kalanick doesn’t put on the airs of a visionary. In business he’s a brawler. Reaching Uber’s goals has meant digging in against the established bureaucracy in many cities, where giving rides for money is heavily regulated. Uber has won enough of those fights to threaten the market share of the entrenched players. It not only offers a more efficient way to hail a ride but gives drivers a whole new way to see where demand is bubbling up. In the process, Uber seems capable of opening up sections of cities that taxis and car services never bothered with before.

In an Uber-fied future, fewer people own cars, but everybody has access to them.

In San Francisco, Uber has become its own noun — you “get an Uber.” But to make it a verb — to get to the point where everyone Ubers the same way they Google — the company must outperform on transportation the same way Google does on search.

No less than Google itself believes Uber has this potential. In a massive funding round in August led by the search giant’s venture capital arm, Uber received $258 million. The investment reportedly valued Uber at around $3.5 billion and pushed the company to the forefront of speculation about the next big tech IPO — and Kalanick as the next great tech leader.

The deal set Silicon Valley buzzing about what else Uber could become. A delivery service powered by Google’s self-driving cars? The new on-the-ground army for ferrying all things Amazon? Jeff Bezos also is an Uber investor, and Kalanick cites him as an entrepreneurial inspiration. “Amazon was just books and then some CDs,” Kalanick says. “And then they’re like, you know what, let’s do frickin’ ladders!” Then came the Kindle and Amazon Web Services — examples, Kalanick says, of how an entrepreneur’s “creative pragmatism” can defy expectations. He clearly enjoys daring the world to think of Uber as merely another way to get a ride.

“We feel like we’re still realizing what the potential is,” he says. “We don’t know yet where that stops.”

From the back of an Uber-summoned Mercedes GL450 SUV, Kalanick banters with the driver about which make and model will replace the discontinued Lincoln Town Car as the default limo of choice.

Mercedes S-Class? Too expensive, Kalanick says. Cadillac XTS? Too small.

So what is it?

“OK, I’m glad you asked,” Kalanick says. “This is going to blow you away, dude. Are you ready? Have you seen the 2013 Ford Explorer?” Spacious, like a Lexus crossover, but way cheaper.

As Uber becomes a dominant presence in urban transportation, it’s easy to imagine the company playing a role in making this prophecy self-fulfilling. It’s just one more sign of how far Uber has come since Kalanick helped create the company in 2009. In the beginning, it was just a way for him and his cofounder, StumbleUpon creator Garrett Camp, and their friends to get around in style.

They could certainly afford it. At age 21, Kalanick, born and raised in Los Angeles, had started a Napster-like peer-to-peer file-sharing search engine called Scour that got him sued for a quarter-trillion dollars by major media companies. Scour filed for bankruptcy, but Kalanick cofounded Red Swoosh to serve digital media over the Internet for the same companies that had sued him. Akamai bought the company in 2007 in a stock deal worth $19 million.

By the time he reached his thirties, Kalanick was a seasoned veteran in the startup trenches. But part of him wondered if he still had the drive to build another company. His breakthrough came when he was watching, of all things, a Woody Allen movie. The film was Vicky Christina Barcelona, which Allen made in 2008, when he was in his seventies. “I’m like, that dude is old! And he is still bringing it! He’s still making really beautiful art. And I’m like, all right, I’ve got a chance, man. I can do it too.”

Kalanick charged into Uber and quickly collided with the muscular resistance of the taxi and limo industry. It wasn’t long before San Francisco’s transportation agency sent the company a cease-and-desist letter, calling Uber an unlicensed taxi service. Kalanick and Uber did neither, arguing vehemently that it merely made the software that connected drivers and riders. The company kept offering rides and building its stature among tech types—a constituency city politicians have been loathe to alienate—as the cool way to get around.

Uber has since faced the wrath of government and industry in other cites, notably New York, Chicago, Boston, and Washington, DC.

One councilmember opposed to Uber in the nation’s capital was self-described friend of the taxi industry Marion Barry (yes, that Marion Barry). Kalanick, in DC to lobby on Uber’s behalf, told The Washington Post he had an offer for the former mayor: “I will personally chauffeur him myself in his silver Jaguar to work every day of the week, if he can just make this happen.” Though that ride never happened, the council ultimately passed a legal framework that Uber called “an innovative model for city transportation legislation across the country.”

Though Kalanick clearly relishes a fight, he lights up more when talking about Uber as an engineering problem. To fulfill its promise—a ride within five minutes of the tap of a smartphone button—Uber must constantly optimize the algorithms that govern, among other things, how many of its cars are on the road, where they go, and how much a ride costs. While Uber offers standard local rates for its various options, times of peak demand send prices up, which Uber calls surge pricing. Some critics call it price-gouging, but Kalanick says the economics are far less insidious. To meet increased demand, drivers need extra incentive to get out on the road. Since they aren’t employees, the marketplace has to motivate them. “Most things are dynamically priced,” Kalanick points out, from airline tickets to happy hour cocktails.

Kalanick employs a data-science team of PhDs from fields like nuclear physics, astrophysics, and computational biology to grapple with the number of variables involved in keeping Uber reliable. They stay busy perfecting algorithms that are dependable and flexible enough to be ported to hundreds of cities worldwide. When we met, Uber had just gone live in Bogotè, Colombia, as well as Shanghai, Dubai, and Bangalore.

And it’s no longer just black cars and yellow cabs. A newer option, UberX, offers lower-priced rides from drivers piloting their personal vehicles. According to Uber, only certain late-model cars are allowed, and drivers undergo the same background screening as others in the service. In an Uber-fied version of the future, far fewer people may own cars but everybody would have access to them. “You know, I hadn’t driven for a year, and then I drove over the weekend,” Kalanick says. “I had to jump-start my car to get going. It was a little awkward. So I think that’s a sign.”

Back at Uber headquarters, burly drivers crowd the lobby while nearby, coders sit elbow to elbow. Like other San Francisco startups on the cusp of something bigger, Uber is preparing to move to a larger space. Its new digs will be in the same building as Square, the mobile payments company led by Twitter mastermind Jack Dorsey. Twitter’s offices are across the street. The symbolism is hard to miss: Uber is joining the coterie of companies that define San Francisco’s latest tech boom.

Still, part of that image depends on Uber’s outsize potential to expand what it does. The logistical numbers it crunches to make it easier for people to get around would seem a natural fit for a transition into a delivery service. Uber coyly fuels that perception with publicity stunts like ferrying ice cream and barbecue to customers through its app. It’s easy to imagine such promotions quietly doubling as proofs of concept. News of Google’s massive investment prompted visions of a push-button delivery service powered by Google’s self-driving cars.

If Uber expands into delivery, its competition will suddenly include behemoths like Amazon, eBay, and Walmart.

Kalanick acknowledges that the most recent round of investment is intended to fund Uber’s growth, but that’s as far as he’ll go. “In a lot of ways, it’s not the money that allows you to do new things. It’s the growth and the ability to find things that people want and to use your creativity to target those,” he says. “There are a whole hell of a lot of other things that we can do and intend on doing.”

But the calculus of delivery may not even be the hardest part. If Uber were to expand into delivery, its competition—for now other ride-sharing startups such as Lyft, Sidecar, and Hailo—would include Amazon, eBay, and Walmart too.

One way to skirt rivalry with such giants is to offer itself as the back-end technology that can power same-day online retail. In early fall, Google launched its Shopping Express service in San Francisco. The program lets customers shop online at local stores through a Google-powered app; Google sends a courier with their deliveries the same day.

David Krane, the Google Ventures partner who led the investment deal, says there’s nothing happening between Uber and Shopping Express. He also says self-driving delivery vehicles are nowhere near ready to be looked at seriously as part of Uber. “Those meetings will happen when the technology is ready for such discussion,” he says. “That is many moons away.”

At the same time, Krane is clear that Google’s big investment was motivated not just by Uber’s potential but also by the potential for the two companies to work together. Krane mentions maps as one technology the companies are looking to collaborate on. He doesn’t offer specifics, but it’s easy to imagine one day searching for a restaurant on Google Maps and seeing not just its location but the wiggling web of Ubers that could take you there. For now, however, Uber shows little interest in getting ahead of itself. Of Kalanick, Krane says: “He’s a heat-seeking missile. He’s undistractable.”

Such focus will be vital as Uber looks to expand from dozens to hundreds of cities. In the meantime, the pure, hard calculus of getting every ride to arrive within five minutes will be plenty to keep Kalanick occupied. As much as business success, the charge he gets from cracking this code drives his commitment to Uber, just as making videogames did when he was a kid. “I just enjoyed it. It was fun,” Kalanick says of his days as a preteen coder. The same, he says, applies to his willingness to go all in on Uber. “When something’s fun, it’s obvious: That’s when you just need to do more of it.”


Uber’s Denial Of Liability In Girl’s Death Raises Accident Accountability Questions

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A six-year old girl named Sophia Liu was tragically killed last night when an SUV driver confirmed to be an Uber-contracted driver struck her in a San Francisco crosswalk. Uber has essentially denied liability, noting in a statement that “this tragedy did not involve a vehicle or provider doing a trip on the Uber system”. Uber’s insurance does not cover drivers between rides, but the accident raises questions of whether it should.

Uber’s Denial Of Liability In Girl’s Death Raises Accident Insurance Questions

The San Francisco Police Department told local news channel KTVU that just before 8pm on New Year’s Eve, a mother and her two young children, Sophia and her brother, were crossing the street at Polk and Ellis in SF’s Tenderloin district. Supervisor Jane Kim said an SUV driver that Uber confirms was one of their contractors turned right into the crosswalk without yielding to the pedestrians who had the green light, and struck the entire family. Sophia was brought to SF General Hospital where she sadly passed away. Sophia’s brother is expected to survive but her mother was recently listed in critical condition due to life threatening injuries from the accident.

Above in a screenpic from KTVU’s coverage, you can see the grey Honda Pilot vehicle in the crosswalk at Polk and Ellis.

Uber-contracted driver Syed Muzzafar involved in fatal acciddent

Uber-contracted driver Syed Muzzafar involved in fatal acciddent

Officer Gordon Shyy tells SFAppeal that the driver was 57-year old Union City man Syed Muzzafar. Muzzafar stayed on the scene and was cooperative with police. He was later arrested on suspicion of vehicular manslaughter. The SF Superior Court told VentureBeat that Muzzafar posted $300,100 for bail yesterday, and will return to court on January 7.

Uber posted a “Statement On New Year’s Eve Accident” on its blog, offering condolences to the victim and her family, but also distancing itself from any cuplability:

“Our hearts go out to the family and victims of the accident that occurred in downtown San Francisco last night. We work with transportation providers across the Bay Area, but we can confirm that this tragedy did not involve a vehicle or provider doing a trip on the Uber system.

Our policy is to immediately deactivate any Uber partner involved in a serious law enforcement matter. For that reason, we urge the police to release information about the driver in question as soon as possible.  If the driver is a partner of Uber, his or her Uber account will immediately be deactivated.

UPDATE: We thank law enforcement for the quick release of information. We can confirm that the driver in question was a partner of Uber and that we have deactivated his Uber account.  The driver was not providing services on the Uber system during the time of the accident. We again extend our deepest condolences to the family and victims of this tragic accident.

The statement implies that Uber is not liable for the accident as it did not occur during an official Uber ride. It may have occurred either between Uber rides, when the driver was on his way to start giving rides, on his way home or to another personal destination, or providing a ride not booked through Uber.

Uber typically requires drivers to buy their own commercial car insurance, and provides an additional $1 million in insurance above and beyond the driver’s. But in California, the Public Utilities Commission has given Uber permission not to require drivers to have commercial insurance. Either way, since this accident didn’t occur during an active ride, it’s not eligible to be covered by Uber’s insurance. Muzzafar may be covered by additional insurance from a third-party car fleet operator if he rented the SUV.

Scene of the accident, from Google Street View. The arrow marks the location of the vehicle

Scene of the accident, from Google Street View. The arrow marks the location of Muzzafar’s vehicle

Should App-Based Car Services Provide Insurance Between Rides?

People have scrutinized Uber’s approach to insurance in the past. But this terrible accident on New Year’s Eve brings a specific question into focus. Should app-based taxi and ridesharing should provide insurance to cover drivers while they’re between rides but actively looking to pick up passengers?

To be clear, there’s no way of knowing what exactly caused Muzzafar’s car to collide with the family. We also don’t know if he was between Uber rides, heading out to start work, on his way home or elsewhere, or giving a ride booked outside of Uber.

Old version of Uber Driver app

Old Uber Driver app

Ridesharing and taxi app drivers do typically use a dashboard-mounted phone opened to an app that shows nearby requests for rides, though. Unlike a traditional GPS system that simply points drivers to their destination, car service apps often directly ping drivers with pop-ups and sounds whenever someone nearby asks for a ride. Drivers may have to respond quickly to secure the fare, or another driver may swoop in and claim it. These apps could be distracting to drivers by pulling their attenton off the road and onto their phone, even if they haven’t accepted a ride yet.

That means the apps could negatively influence a driver’s on-road safety even when they’re not actively on their way to pick up a passenger or currently transporting them. Some might consider this reason enough for these services to extend insurance as long as the driver has the app open and is receiving digital hails from potential passengers.

For comparison, taxi accidents happen quite frequently, but taxi drivers and their vehicles are insured at all times, whether or not they’re in the middle of a ride or on the way to pick up a passenger. Taxi Magic‘s Director Of Marketing Matt Carrington clarified that “In SF, any taxi driver is going to have commercial insurance on their vehicle, and if they are aligned with a fleet, the fleet will also have an insurance policy.”

If rideshare and car services don’t provide insurance whenever drivers partnered with them are working, it could create an insurance gap. A rideshare driver might only have personal insurance that might not cover them while they have a rideshare app open, but the rideshare service might not cover them between rides. That means in the case of an accident where victims have significant medical bills, the driver’s personal insurance could deny the claim and the rideshare service could deny liability. That means the victims may only be able to sue the driver for their personal assets, which may not be enough to cover the medical bills.

By bringing up this issue, I’m not trying to blame Uber or any other service for accidents, which are typical in transportation. I’m saying that app usage by ridesharing and car service drivers may impair driving, and so there should be a discussion of whether car services should extend insurance to drivers whenever they have their apps open, not just when they’re on an official job.

[Images: KTVULCTMag]