Le Lézard
Classified in: Transportation
Subject: AVO

The NLA's Gary Buffo Details 3 Hurdles Uber Must Overcome Before Going Public


NEW YORK, Oct. 27, 2017 /PRNewswire/ -- As a veteran of the Transportation Industry, I understand the importance and impact of connecting people. Over the past several years, I have been in awe of Uber's (and Lyft's) ability to utilize technology to foster connections on a massive scale. In many ways, it has been truly wonderful to watch, and has brought about important technological innovations that taxis and limousines now use to lift their own businesses. While the technology is now standard, there remain vast disparities between the way private car companies operate, and the ways in which transportation network companies (TNCs) operate.

New Survey Reveals Public Response to Ride-Hailing Apps (PRNewsFoto/The National Limousine Associati)

With talk of Uber being the first of the TNCs to go public, as early as late 2018, it's worth exploring the issues that the company must first overcome before it can expose itself to the public ownership and scrutiny. These issues ? many of a cultural and ethical nature ? will ultimately impact the perceived margins enjoyed by the ride-hailing sector.

1. Vehicle Regulation 

When you get on a plane, you take solace in the fact that everything from the engines to the windows and wings are regularly inspected in adherence to a strict set of guidelines to ensure the safety of those on board. When you enter a taxi or limousine, you know that the vehicle has been commercially inspected, factoring in excess wear and tear. However, when you order an Uber, you're getting into a private vehicle that has not been evaluated with commercial use in mind. Tires, breaks, steering systems and the myriad tech that comprises today's are not commercially maintained on most Uber vehicles. The liability that Uber assumes by not regulating its fleet of vehicles is massive, and should not be ignored. Their insurance has been able to cover them up until this point, but the company is a major lawsuit away from a monumental problem.

2. Background Checks & Drug Testing

When you're placed into a vehicle with a hired driver, your life is in the hands of that individual. Their criminal history, drug and alcohol use and mental state are all factors that have the potential to directly impact individuals that get into the backseat. While Uber does conduct cursory criminal background checks, they often use services that don't uncover crimes across state lines. There have been hundreds, if not thousands, of incidents that prove the need for enhanced driver screening. Additionally, with the opioid epidemic that our country is facing, it is baffling that drivers are not screened for drug use before being granted their driving privileges. Again, if past is prologue, safety issues like these often lead to lawsuits and, ultimately, congressional inquiries and investigations. 

3. The Worker Classification Conundrum

Hurdles one and two have clear cut solutions, with low cost remedies that will likely pay dividends down the road. However, Uber's misclassification of the drivers ? the workers on which the company was built ? will be the biggest hurdle of all. In 2017 alone, stories have come to light concerning overpromised/underpaid wages, predatory auto leases and even drivers who have become homeless while driving for Uber. The company continues to consider itself a SAAS, and insists that its drivers are independent contractors. However, under many definitions of the law, it is clear that these drivers are directed to perform in a manner consistent with a full-time employee. Denying benefits such as healthcare, worker's compensation, proper insurance and fair reimbursement to such a large, dedicated set of people sets a terrible precedent and positions the economy for failure. When workers do win their rights, Uber will face the reality with a vastly different profit model than the one they enjoy today.

The hurdles that Uber must overcome before going public, are not only important to investors, but have an impact on our economy and the greater good of our great nation. When Uber (and all TNCs) can take the steps to ensure public safety and worker's rights, it will be a better day for taxis, limousines and ride-hailing companies alike.

National Limousine Association(PRNewsFoto/National Limousine Association) (PRNewsfoto/National Limousine Association)

SOURCE National Limousine Association


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