NZ Uber war shows divide between dinosaur business models and new innovation

OPINION

Ian Apperley

Uber's app

Is Uber's arrival a positive or negative for NZ passengers?

Positive
91%
Negative
9%
Total votes: 256

Uber is under attack in New Zealand. The powerful Taxi Federation has engaged in an unrelenting campaign to see them shutdown and now the police are in on the act, fining drivers because a smartphone apparently doesn’t constitute a smart meter. Mainstream media are fuelling the fire as any controversial news about Uber is great click-bait. But what is really going on?

In New Zealand, Uber drivers have to jump through most of the same hoops as taxi drivers. They need a “P endorsement” — a passenger endorsement ticket from the New Zealand Transport Agency certifying the driver as “a fit and proper person” a Passenger Service Licence and a Private Hire Service Registration. A police check is done. – source

Uber is a very simple and very safe service that hooks you up with a driver via your smartphone. You enter your location and destination and can request an estimate before you commit. Your details and the driver details are exchanged including phone numbers, other details, and photos of yourself and the driver. The driver arrives and the trip is logged in real-time via GPS.

You can share that trip, live, with your partner, family, or friends, so they can see exactly where you are in real-time  – far safer than a traditional taxi. At the end of the journey you rate the driver and they rate you. Reputation is essential for both parties to use the service. The cost is automatically deducted from your credit card and no transaction in the car is required.

It beats the hell out of a normal cab, and, the majority of the time, it's a lot cheaper.

Criticisms vary, but in my opinion, are generally unsubstantiated.

There seems to be a belief that the drivers are not police vetted or certified professional drivers. We know that isn’t true and in my experience every driver I have had in Wellington is either a current or former taxi driver, or a professional driver (including some who regularly contract to government and diplomatic missions).

Safety is attacked, but as you can see above, safety is better in this model. Better, bad drivers will rate lowly and Uber has a threshold where they are cut off. Same as bad riders. If you are a bad passenger, you’ll find your account is suspended as well.

The Taxi Federation has raised the price increase issue. When demand is high, Uber increases its prices. Now, when they do that by the way, you get a big warning message before you order a cab, and you can still get an estimate. It’s not a surprise. At least Uber prices come down.

When was the last time a taxi company reduced their pricing? Oil prices have fallen by half, but as far as I am aware, not a single taxi company have reduced their fares. At least Uber is transparent in its pricing and can change it in real-time.

The Taxi Federation sites international examples of crime. Such as the rape of an Uber rider in India. This is used as a deliberate scare tactic and mainstream media love the click-bait opportunity it provides. Here’s the context.

I did some research on taxi crime in India and found that there are tens of thousands of reported crimes each year, from assault, to robbery, to rape, to murder. In fact, there are entire taxi cartels that simply survive through crime. So we have a single Uber incident versus an industry of taxi crime and tens of thousands of offences.

So why the attack on Uber internationally?

It’s simple. In my opinion, taxi federations globally largely represent a cartel situation and rake in a massive amount of money. If you aren’t part of a federation and paying your protection money, then you can expect business to be very hard. Also, using Wellington International Airport as an example, many other traditional businesses have managed to find a way to get their nose into the trough and clip the ticket on taxi rides as well. All of these business stand to lose as Uber grows.

Is the Taxi Federation just a leftover relic of yesteryear filled with old white guys who can’t work out a smartphone?

Rather than adapt their business models, like one Lower Hutt Taxi company (good on you!), they choose to try and kill the new player in the market to retain their profit. It’s an ugly approach to business and morally questionable in my opinion.

Uber is good for the passenger and the driver. The passenger gets a ride where they know what the cost is before committing, are far safer, and can see where there driver is in real-time. The driver can take jobs as they please and supplement their own work.

When Uber arrived in Wellington drivers told me that the Airport told them they weren’t welcome and if they were caught on premise they would be trespassed. Uber simply sat outside the front gate and picked up people. My understanding is that Uber and the Airport have come to an arrangement, which no doubt means that they will be paying the ridiculous flag-fall fare for being on airport property. At least the airport talked to them. Uber is still sitting outside the front gate though, customers have figured out it’s a lot cheaper to walk two hundred meters down the road to the service station and call a cab.

A couple of other points to cover off.

On the smart meter issue. Given that the traditional smart meter is a “dumb” device that could be tampered with, it does not compare to a smart phone which has a GPS accuracy of 5 meters or less and an extremely powerful computer behind it, linked to Uber central, so it can’t be tampered with.

Taxis have cameras. An interesting aside here, I asked a driver one day what they cost to install and he told me about $2000. $2000. You can buy these things, with an internet connection for $200. Someone is making a pretty penny out of those installs. You don’t need a camera in the Uber car. You are tracked in real-time and you have the driver’s photo.

I use Uber and taxis a lot for my work. I always ask drivers what they think of Uber and what they think of the Taxi Federation. In general, Uber is seen as a good thing and the Taxi Federation is roundly hated by the drivers I talk too. One driver became apoplectic with rage when I asked him, and I couldn’t repeat what he said here.

It seems to me that the Taxi Federation would be better working on new technologies for its members rather than engaging in a propaganda war with Uber, and while it may win this battle, it risks losing the war.

This is a war between the old, dinosaur business model of the twentieth century and emerging, exciting new business models of the twenty first century. Uber may be the first casualty, but the flood is coming, and unless organisations like the Taxi Federation change now, they will be made irrelevant, which in my opinion, will be a great thing for the end consumer and the driver.

IT consultant and blogger Ian Apperely posts at Strathmore Park.

READ ALSO: Cops pounce on Uber (NZ Herald)


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63 Comments & Questions

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Why support uber who actually want a fund to investigate journalists who disclose negative press about uber.
Uber have very poor ethics in terms of their competition.
THEY dont even pay tax properly in nz, ironic considering they are about to disrupt courier and taxi compnies and add thousands of unskilled workers to the dole queues. Google it. Its well known.

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They don't want a fund to investigate journalists. Emil Michael, VP of Business said reporters critical of the company should be investigated (Nov 8 2014) and was roundly shut down for his comments by the rest of Uber.

I think the ethical debate applies to all sides. I'm not sure that Uber's competitors are behaving ethically, as displayed by the massive amount of fear, uncertainty, and doubt (FUD) they are generating.

All of the drivers I have spoken to so far use Uber as a complimentary way of adding to their income. I haven't seen a single report about Uber putting drivers out of work.

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1/ The VP Emil Micheal was not roundly shut down,
2/ In terms of anticompetitive behaviour UBER drivers have been systematically booking false trips on Lyft to clog their service in LA
3/this wont put taxi drivers and courier drivers out of work ? I'm a bit surprised you dont see this one. If everyone becomes an on demand taxi driver / courier driver do you think that wont affect the rest ?

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If only this information would get out into the 'mainstream' .

And loved the 'cartel' analogy , very accurate.

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Also re unsubstantiated criticism. Paid nearly 4 x taxi fare to use service. Was told "we can charge what ever we like". Users "can" request that fees are calculated in advance but drivers don't have to do this. The 300.00 odd dollars it cost to get out of sydney during the terror raids should be enough evidence for you.

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The thing I find strange about the Taxi Federation complaining about surge pricing is that Taxi drivers would love to be able to increase pricing at peak periods such as NYE to create market that ensures basic supply and demand. The fact some taxi companies already do this with higher rates at different times of the day shows they agree in principal with this.

As for the pricing to get out of Sydney during the terror raids (and the NYE story), given the choice of waiting 1-2 hours for a taxi or opting to pay extra for Uber, clearly some people chose to opt for Uber.

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That was, again, an isolated case, the only one reported the Southern Hemisphere, and Uber I understand refunded the money.

Again, you can request pricing in advance and if they choose not to provide that, you can choose not to ride.

Try doing that with a regular taxi.

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"you can request pricing in advance " - You cannot request fixed pricing in advance through the Uber app. You can request an estimate. It is non-binding.

"Try doing that with a regular taxi" - You absolutely can request a fixed price with a regular taxi, and the price you pay is the cheaper of that and the meter.

Having said that, I support Uber's pricing during the Sydney thing. Their pricing is set automatically based on demand. They raise prices to get more drivers on to the road - as they pass the extra money on to drivers. I like this as a consumer because it means there's almost always a car available, vs. traditional taxi companies where you potentially wait a long time during a high demand period.

The one time there wasn't a car available (in Dec), Uber gave me 2x$20 credits. Fantastic service.

The bad thing that Uber did re. Sydney was how they framed the surge pricing when they announced it. It led to people misunderstanding why the pricing was higher. I haven't seen Uber do much to correct this, either.

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Maybe because I have a decent amount of money, price is not very important to me. Efficiency is what I love. Uber is massively efficient and as a side benefit is usually cheap. Just see Sydney where taxi plates once sold for $450k: they now can't get bids of $20k. Uber type service is the future. Taxi cartels are dinosaurs.

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This comment does not disclose the full context. After consumer backlash at the high demand surge pricing, Uber refunded users and offered free rides to users. http://www.dailymail.co.uk/news/article-2874062/Uber-forced-dramatically...

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"filled with old white guys who can’t work out a smartphone?" Sorry, last time I checked, at least in Auckland, it's mostly Indians - very few white guys in taxis at all!

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I wasn't referring to the taxi drivers... :)

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Then who WERE you referring to? The Taxi Federation? Must be quite a few non whites on that as well considering the driver demographic!

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The article says - "because a smartphone apparently doesn’t constitute a smart meter". This is not the legal issue - though, I am not a lawyer, this is my interpretation of the rules and what Police have been saying (the girl quoted in Stuff today is a friend of mine).

I'm a big fan of Uber, but I've yet to see them say something that makes sense in this regard. The discussion seems to be muddied by this debate of whether a phone is a meter or not - the Uber spokeswoman even talks about it in Ian Steward's Stuff article this morning.

The issue is that a car can either be operating as a taxi, or a private hire, it cannot be both simultaneously.

A taxi has to have signage, approved pricing displayed, a meter, etc. The meter is the primary form of rating a fare. If you pre-agree a price, you pay the cheaper of the meter and the pre-agreed price - the meter always runs.
Meters must be certified, which is totally fair enough.
See http://www.nzta.govt.nz/resources/rules/operator-licensing-2007.html#4

In contrast, a private hire must not have signage, a meter, etc. A private hire must pre-agree a fixed price for a fare - it cannot be charged by a meter.
See http://www.nzta.govt.nz/resources/rules/operator-licensing-2007.html#61

I don't see how Uber can fit in to the current rules. It can't be a taxi because its fares can't be pre-agreed and displayed, as they change with demand. It can't be a private hire because it isn't fixed price.

Despite this, Uber has said they are a "private hire".

My friend who was stopped said "He[Police] said private drivers have to agree to cost upfront, they can't run meters, weird."

Whether the phone is a "meter" or not is irrelevant, because Uber doesn't claim to be a taxi.
Uber has an option to get an estimate, which gives you a range - this is not a fixed price, fares often go over or under.
You can also optionally enter your destination at any time during the booking process, or while in the car. This is used so the driver can get an accurate destination and the app suggests a route for them to take. It also lets you share an ETA with friends. I have noticed that in the last month or so, drivers have been asking more and more for me to add my destination, and I had wondered in the last couple of days if it was because of this fixed price thing, but the destination is not used for pricing so I don't think it's related.

For Uber to continue to operate, they surely must change their system to pre-agree a fare. That sucks for the driver if there's traffic, and it's potentially difficult if you want to stop to pick something up on the way somewhere (I regularly use Uber when going to friends houses, and stop at a liquor store, for example). What happens if you change your plans mid-trip?

The only way I see this working out well, is if the licensing rules are changed to allow metered private hires, or, to relax some of the requirements to be called a taxi.

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Actually, Katie's quote in the Stuff article makes it clear that Uber think that the driver's smartphone is *not* a meter. I really can't see how you arrived at the opening paragraph for this article.

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"It can't be a taxi because its fares can't be pre-agreed and displayed" - I should have said its tariffs, not fares.

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If taxi fares weren't so high, there wouldn't be the incentive to introduce a competitive service. It costs about $70 from AIA into the city. In Shanghai, it would probably cost a third of that although admittedly, the cabs are a bit less classy (although all VWs)

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Good article but you didn't mention the waste of Police resources in being involved in this commercial battle. I'd prefer the Police spent their time chasing criminals not Uber drivers!

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The only good thing about the police harassing people partaking in entirely voluntary transactions is that at least they aren't out harassing people driving 1 kmh over the speed limit.

But it is great to see from police actions this summer that they have pretty much eradicated all crime in New Zealand; I look forward to seeing them advocating for budget cuts due to having nothing to do.

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Uber is great, have used it more than 50 times now since signing up last year and only 1 rude driver so far (who I marked down and will hopefully get moved off the service.) who complained I wasn't going far enough. I hope the courts etc see common sense with them.

Also, Surge times have a reminder prompt so if you don't need to ride straight away you can get a notification when the rates have settled down. I have paid surge pricing maybe 3 times tops (incl Xmas rush at night when it was 2.3x) - you have to be blind not to read the notice of how much the fare will go up. you then have to physically punch in the surge factor in when you hit the request button , it could not be more clear. I find Surge normally takes between 5-10 min most times to come off, but Xmas / Vector Concert rush one night it stayed on for a while when I was trying to ride. I tried calling a Co-Op and was engaged, then tried their app (which didn't even load on that night) so swallowed the extra with Uber but they picked me up in less than 5 min and got me home , so happy with that. It was an extra $30 but they have saved me way more than that over the last 6 months.

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Great column Ian.

I think it is ridiculous for taxis in NZ to be regulated. What does this accomplish, except keep prices high and new taxi companies or new business models out?

These days, taxis area perfect case of where the market (customers) can do their own regulation. Got a bad taxi driver? Post it on social media - his business will decrease right away. Got a good driver - put that out on social media and the guy will be flooded with business. Same thing with fares. A taxi feedback website and on social media would be a great public service for us taxi users (don't see how that could make money).

Taxi companies or "federations" in most cities - certainly in Auckland - are certainly cartels, not businesses oeprating in a competitive environment.

It is disgraceful that publicly listed companies - such as AIA - cow-tow to and even join the extortionate tactics used by taxi companies. Why should AIA grant access licenses to the airport only to a few selected taxi companies? Yes, I know, its all about the kickbacks (in the form of fees, licenses) from the taxis to AIA - not about helping taxi customers at AIA get a good deal.

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Taxis are just yet another government-coddled, ticket-clipping rort of an industry.

And they wonder why everybody prefers to drive their own cars?

From one emotional string-tugging media hype to the next, bad laws and regulations keep raining down misery and costs onto society. And then we all wonder how we woke up in a totalitarian, communist dystopia.

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I have been using Uber in Auckland for a couple of months. In fact I just used one from town about 10 minutes ago. It is brilliant! Sure it's cheaper, but t's also a hell of a lot simpler and painless than either trying to hail a cab, or call the taxi company.

Rather than bleating about enrolling the police in protectionism why don't the Taxi companies get off their butts and build some of the parts that make Uber so attractive.

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As a frequent flyer I use taxis regularly. One taxi driver I see a lot told me his camera cost $700. It's not something the taxi drivers can install and they don't have access to the recording unless there is an incident. So to talk of a $200 camera is nonsense.

With regards to the petrol price - the petrol prices has, until recently, being steadily rising. The taxi drivers do not increase their prices regularly. So they were absorbing cost increases.

The use of a taxi from an established company provides me with the comfort of the backing of an organisation that has a standard of service that I can look forward to. Uber are at arms length, whatever they say.

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thank you Mr Taxi Driver

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How wrong you are.

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I'm not sure anybody is advocating getting rid of taxis - some people prefer cabs for exactly the reasons that you describe; some don't. NZ is meant to be a relatively free country - so why the hell are police out there harassing people who have both voluntarily entered into a transaction that has zero effect on others?

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Because it dosent have zero effect on others
Uber has a strong history of anticompetitive behaviour against other taxi companies, lyft, rideme and various others.
Regulation in this case pretty much ensures people keep their jobs.
Do the maths there are 130,000 cab and courier drivers in NZ - if you put them on the dole queue and let joe blogs do it it may be more efficient but what does it cost the country that hardly benefits in terms of tax thanks =to ubers taxation arrangements

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Would these so called out of job taxi drivers simply turn around and become Uber drivers?

More than a few can easily remove sign-age, turn off/remove the meter, and they're instantly on a new payroll.

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Jobs are a cost and aren't there to be protected by regulation. It is the effect on consumers that is important.

Or are you advocating for more blacksmiths to create horseshoes?

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Kiwis are sick of taxi drivers who often don't show up correctly and provide very average service for amongst highest fares in world. I use Uber in Europe, USA, Asia, Australia and NZ. Service is always at least average and often excellent. Better product. Better drivers. And cheaper. Simple really.

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Perhaps we need to entertain the idea that the laws and regulations that govern this sector need to be reviewed and updated to accommodate this new era we've entered. It seems to me the issue revolves around the antiquated laws that govern taxi services and private hire. Our world is changing so fast as technology creates new opportunities for business. The law is simply not geared for the change that's occurred. It's about time we reviewed the system and created a new standard to encourage the disruption of the cartels that currently run the taxi industry in New Zealand.

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You miss the point of it all J dean. That being we, as the public, are waking up to the fact we don't need some busty body making the 'laws', when we can write our own. You have a car, wanna offer me a ride for some extra cash, we can agree together, or use an app if we want. The gummitt need not be involved.

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Mavericks like you, proclaiming we don't need the 'gummitt' or 'busty bodies' to write rules and regulations that govern these technological advance, make it harder for the rest of society to accept their introduction.

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The Uber issue demonsrates how most have yet to appreciate how the internet will demolish many business models. Retailings is a known, but just wait till that really takes off (full 3d body scan, clothes made to'fit'), bitcoin and harmoney money types will erode the banks cash cows, Xero and its time/staff savings, ... and on it will go.Taxi fed is on a hiding to nothing... a tsunami of change is on the way.

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Dead right.
But if you are going to demolish business models why disrupt the low skilled labour jobs that anyone can do,
It 's a bit impartial when western governments tried to absolutely obliterate Bitcoin, will we see context sensitive computers determining law, robotic dentists, online universities, yes we will.
So the next immediate question is when autonomous cars take 240,000 jobs how will we feed these people.
Those who disrupt with technology have an ethical responsibility to ensure it's not all take take take, otherwise you really will end up with a heavily divided community and the backlash to that will be a communist regime.

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Every single time we have developed technology and advanced productivity people have whinged about lost jobs - yes, some people will lose their jobs, but new jobs appear as a result of the technological changes - be they to service the additional leisure time or through some totally unforeseen effect.

And jobs are a cost to society, we don't want them - which is why people have to be paid to do them. The important thing is whether we are capable of consuming. Yes, one often leads to the other but it is important to always look at the consuming side of the equation as then we don't do stupid things like picking winners and protecting producers.

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James commented that "Every single time we have developed technology and advanced productivity people have whinged about lost jobs - yes, some people will lose their jobs, but new jobs appear as a result of the technological changes" - obviously this is right and has been most visible in the few hundred years since the Industrial Revolution. The bit that is easily missed is that the new jobs frequently require a higher level of skill and education, and scarcity drives wages (and hence cost to society) up not merely for these jobs, but for the relatively speaking low/unskilled service industries. People at the bottom of the socio-economic pyramid tend then to fall out of the job market (this phrasing as a palliative to the trolls!). The New Zealand model has moved to view anything more than basic education as a private rather than a social good - this model is as much a dinosaur as the Taxi Federation or any of the countless other intermediary industries whose business model is being disrupted. There is ample evidence in the economic literature to confirm that long term economic growth depends materially upon retention of a well-educated workforce. Shouldn't we be thinking forward about our policy on funding higher education in New Zealand, and ensuring that we get even slightly better outcomes for those in the lower half of the socio-economic pyramid? I know it's not much of a soundbite, or political rallying cry.

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The tsunami of police nonsense rolls on. Protecting public safety by making sure uber drivers don't charge by distance travelled - spare us this utter drivel please.

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An important distinction is that when you travel with Uber, your primary contractual relationship is with the driver, not Uber. This is why all rides it brokers are 'private hires'. The key distinction is that Uber is a "request tool and not a transportation provider". This is why Uber maintains it is not required to register as a taxi provider under NZ regulations. It is therefore not required to provide the services and protections to customers that are mandatory as part of the registration process, two of which are to warrant the quality and safety of every ride and to investigate every complaint made about any aspect of the transaction and to take appropriate action. As Uber is not the transportation provider, it is not contractually responsible for anything that 'goes wrong' on the ride. Hence it cannot be made to enforce any terms of the agreement or pay compensation in the event of a problem arising when an individual passenger and an individual driver agree to a "private hire". Thus, passengers have fewer legal protections on a Uber ride than on a registered taxi ride.

That does not mean that Uber is a bad deal. Some passengers may be prepared to forgo some of these provisions in order to get a cheaper ride. But they need to be aware of what they are forgoing if they are to make an informed decision. Uber states in its terms and conditions that "YOU AGREE THAT UBER HAS NO RESPONSIBILITY OR LIABILITY TO YOU RELATED TO ANY TRANSPORTATION OR LOGISTICS PROVIDED TO YOU BY THIRD PARTY PROVIDERS THROUGH THE USE OF THE SERVICES OTHER THAN AS EXPRESSLY SET FORTH IN THESE TERMS". Further, "UBER DOES NOT GUARANTEE THE SUITABILITY, SAFETY OR ABILITY OF THIRD PARTY PROVIDERS. IT IS SOLELY YOUR RESPONSIBILITY TO DETERMINE IF A THIRD PARTY PROVIDER WILL MEET YOUR NEEDS AND EXPECTATIONS. UBER WILL NOT PARTICIPATE IN DISPUTES BETWEEN YOU AND A THIRD PARTY PROVIDER. BY USING THE SERVICES, YOU ACKNOWLEDGE THAT YOU MAY BE EXPOSED TO SITUATIONS INVOLVING THIRD PARTY PROVIDERS THAT ARE POTENTIALLY UNSAFE, OFFENSIVE, HARMFUL TO MINORS, OR OTHERWISE OBJECTIONABLE, AND THAT USE OF THIRD PARTY PROVIDERS ARRANGED OR SCHEDULED USING THE SERVICES IS AT YOUR OWN RISK AND JUDGMENT. UBER SHALL NOT HAVE ANY LIABILITY ARISING FROM OR IN ANY WAY RELATED TO YOUR TRANSACTIONS OR RELATIONSHIP WITH THIRD PARTY PROVIDERS".

Hence, Uber does not (and indeed cannot) guarantee (for example) that the car you will ride in is of warrantable standard, that the appropriate taxes and insurance have been paid and that the driver of the car is actually the individual with which Uber has the relationship (and not just the possessor of the cellphone on which the transaction is recorded. It cannot offer such a guarantee because under its business model, the responsibility for these factors lies with the driver and not Uber. However, under taxi firm registration, the taxi firm shares the responsibility for these factors, so it faces financial risks if it does not ensure these standards are met. Hence it expends effort (cost) in following them up, and can therefore offer a credible guarantee to passengers.

In effect, what Uber has done is unbundle booking the car from providing the ride. Booking a ride on Uber is no different to booking a flight or hotel on Expedia. The terms and conditions prevailing for the actual transportation are those offered by the flight/ride provider, even though Expedia makes the booking and pays the provider on your behalf. If the flight is not on time, or the room you are given differs from the one booked, the onus is on you and the provider to sort it out. Expedia and Uber will not help you. The terms you agree to are those offered by the provider, not Expedia/Uber. The feedback mechanisms used to rate drivers/properties/airlines are no substitute for contractual warranties by Expedia/Uber that the flight/room/ride you actually receive meets specific standards, in the same manner that a taxi company warrants the ride provided by one of its drivers meets either its own standards or even those required for legal purposes. Monitoring and enforcing the performance of the flight/room/ride is the customer’s responsibility, not Uber’s. The feedback mechanisms relate only to past activities. They have no bearing on the contractual risks relating to the ride actually provided, because many things happen that may mean the actual ride differs from that expected. Arguably , these feedback mechanisms serve Uber better than the customers, because it allows Uber a cheap way of identifying and eliminating bad drivers that will damage its reputation, without having to incur the same incentive and monitoring costs as taxi firms which are bound by law to provide warranties to passengers. If the provider is not a registered taxi provider, then none of the default protections offered by the taxi provider registration regulations apply. Under NZ law, if the driver is not affiliated to a registered taxi provider, the ride is a 'private hire'. The driver must have a licence with a P endorsement (like the pilot of the plane must have a commercial pilot's licence), and that the fare be agreed before the ride commences, but if the agreement is direct with a driver, then it is the driver that must be pursued for redress. Uber cannot be pursued, and is not required by law to assist the passenger seeking redress. Laws governing private hire presume that the parties are cognisant of the lesser protections when the private hire provider is not a registered taxi provider. Yet most Uber passengers appear to be quite unaware of the distinctions.

The vast majority of the provisions in NZ's (and other countries’) taxi provider registration processes are intended to protect consumers, not taxi drivers. And they are there for good reasons - mainly because of problems that emerged in the past from contracts between passengers and providers, that date from the Roman times, and have covered travel on wagons, stagecoaches, canals and railways, long before taxis came into existence, and have been extended for air travel. They relate to the laws of 'common carriage', and are predicated upon significant information asymmetries between passengers and providers, in large part because passengers transact only infrequently, and which place them at a relative disadvantage to the providers of the rides.

Arguably Uber is succeeding because its passengers mistakenly believe that rides booked on it are perfectly equivalent to a ride provided by a registered taxi. Eventually, the contractual differences will come to light when Uber rides go wrong, and the redress available to Uber passengers is demonstrated to be less than that available to passengers of registered taxi services. As in the past, this will lead to calls for Uber to be regulated, just as existing taxi regulations have emerged as a result of redress available under other unregulated arrangements not being considered satisfactory. If Uber and its drivers wish to avoid being regulated as taxi firms, they must change their business model so that they provide identical assurances. For example, individual Uber drivers may federate into larger groups (all of New Zealand’s large taxi firms operate as either federations of owner-drivers who receive shares of the profits of the booking agency as well as rides, so have strong incentives to monitor each other’s quality, or as franchisees whose contracts with the booking agency hold the franchise fee as a bond against the provision of ongoing ride quality) or contract with third-party verification parties that warrant rides as well as vehicle and driver condition (e.g. a sort of Pay-Pal for Uber drivers). These arrangements may or may not be more costly than government registration processes, but they will be necessary to 'fill the gap' created by the contractual differences between what Uber is offering and a ride in a registered taxi.

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You seem to be of the misunderstanding that regulation is there to protect consumers; the vast majority of it is not - it is there to act as a barrier to entry and thus protect the business models of those already within the industry. If the taxi regulation were there to protect consumers then we would have compulsory sat navs showing the recommended routes in all cars to protect us consumers from the fact that we do not necessarily have local knowledge (and as someone who was ripped off frequently when I first came to NZ I know that this often happens).

Where Uber is successful is in taking a great big pair of scissors to that regulation and putting in place a simple system that actually does work for consumers, with estimated fares, driver (and passenger) reviewing and surge pricing to ensure that supply increases with demand. It works well.

There will be room in our economy for both models - I just can't see why it is any business of governments when we are perfectly capable of entering into contracts without their say so.

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If you are so against regulation and the governments need to impose it please organise your own private medical insurance and opt of of the public health system in preparation for the possibility your Uber ride goes wrong. For all their down sides Taxi firms at least pay insurance and ACC (as required by the government) to cover the cost of mishap based on the time their vehicles spend on the road. I am sure Uber drivers pay ACC through their registration but this will likely be for a private motor vehicle rather than as a commercial operator. Sure, there is room in our economy for both models PROVIDED both models adhere to the same regulations and pay the same fees for peripheral services - the health system and fire rescue to name a few - their operation may have cause to need. Simply saying its a new business model versus an old one is simplistic and ignorant. You may be capable of entering a contract on your own but please make sure the rest of us taxpayers don't have to cover the cost if the contract gets broken.

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I'm sorry Tomato Sauce, but the IRD does not let me reduce my tax to reflect the fact that I have organised my own private provision for health, education, post retirement lifestyle and a range of other public services which I would like to opt out of. I would be delighted to pay my taxes for the public services which I do not wish to opt out of. In fact I seem to be collectively supporting a rather substantial wealth transfer to other people I didn't choose to assist, (many of whom might be tinged ripe tomato red, perhaps like yourself? <NB: intended as joke rather than abuse>), and partially funding in addition a range of publicly provided services I have no effective choice in managing, or meaningfully deciding on the delivery of. I choose to live here, pay tax, and accept that New Zealand law mandates and enforces this outcome and tacitly accept the public contract even if I would opt out of it if I legally could. OH .... please make sure that I don't also have to cover the cost of the rest of you if THAT contract gets broken.

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The reason Uber is succeeding. Is not because passengers think they are a taxi service. It is because they are not. Taxi service has dumb and dumber answering the phones with lazy 'do it when I finish my donut' drivers. Uber simply tells you the car is 4 mins away and they show up. Uber is not succeeding as much as taxi drivers have failed.

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Have you ever tried making a complaint to a taxi company? Now that is a lesson in understanding you have no rights.

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Lawyer for the taxi feds?

All drivel.

Regulations, contractual obligations, blah, blah, blah. Not needed my friend.

I hired a guy to mow my lawn the other week. glad you weren't around to advise us of all the legal obligations and the need to regulate transactions between an independent lawn mower and me.

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Maybe you should have. How are you placed with your insurer if the uninsured (did you check?) contractor ran over a hidden obstacle in your grass that ruined his lawnmower? If he injured himself in the process, were you aware that you failed some basic Health and Safety obligations when he didn't ask and you failed to tell him there may have been obstacles? Real risks that happen frequently with 'casual' lawnmowing contracts. Especially when the 'contractor' is the local schoolboy and your agreement is verbal. Less likely when you contact with a franchised operator.

With Uber, unless the driver is a registered taxi provider, your agreement for the provision of travel is a private deal with the local schoolboy,with none of the provisions spelt out in the NZTA regulations governing taxi iperators. So if the Uber driver damages your luggage putting it in the boot, YOU (not Uber) will have to sort it out (that is, if you can find him after the damage is done - as Uber says, its not their problem, so they may not be inclined to help you there). Even if you can find him, if he is not insured, your chances of being compensated for large amount of damage are small, as it is the individual driver who may have no assets, and not Uber (or a large taxi firm, which may have assets) who is liable.

Caveat emptor!

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What is the point of "plod", after the reduced drink drive limit & zero kms over the speed limit & now this! they are really looking like a pain in the ass.

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Ian, very emotive and congrats for jumping on the click bait bandwagon yourself. However there are some basics that have nothing to do with the Federation. We don't make the rules and we don't enforce them - that's the NZTA's job. We are subject to them like everyone else.

Our comments on safety in NZ come from experience. The way the rules are written, allows drivers to undertake behaviour that would not be tolerated in a normal company and still maintain their P-endorsement. These drivers are removed from Federation Taxis and gravitate downwards. Case in point: https://twitter.com/Uber_Auckland/status/554108708284682240

Regarding the Delhi incident, you will not have found the Federation commenting on that as it has nothing to do with us or NZ. As you well know, journalists are free to add what they wish in order to sensationalize stories.

Pricing - Taxi pricing is totally transparent. It is written on the door so you always know what you will get.Whether you agree with it or not is a different matter. We do not suddenly slip in an extra $25 surcharge just because it is New Year's Eve http://www.smh.com.au/digital-life/smartphone-apps/sydney-new-years-eve-... or surge.

Additionally, when surge pricing is removed and the price returns to normal - that is not a price decrease! On the contrary, given that Uber is in the Private Hire sector and just requires a car with no safety, dispatch or other associated equipment, your arguement regarding falling oil prices should be directed at them.

The question you should really ask is "Why doesn't Uber just make a very simple change to their pricing system that would permit them to work legally in NZ"

Finally, if you download the Blue Bubble App you will find that it not only incorporates many of the features enjoyed in the Uber App but also has a variety of seamless payment options and can be enjoyed nationwide.

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The app may have seamless payment options but those payment options are still twice the price of other similar countries.

And are we able to review the drivers to ensure that we aren't being ripped off? I no longer use Blue Bubble group cabs due to too many bad experiences when I first arrived in NZ.

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It can take 1-2 hours in Sydney on NYE to get a taxi.

You can't tell me for one minute taxi' wouldn't jump at the chance to manage supply and demand by increasing pricing at busy times like this if they were able to do that.

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Uber will be loving the publicity to help continue building their profile in another market. For Uber, it's ground hog day debate and counter PR tactics in country # 71 (or whatever they're now in)...The dinosaurs need to adapt and start competing with technology and start listening to the reasons why more people are catching on to Uber (both current Taxi drivers and customers). There's more transparency in an Uber taxi ride than the current inefficient model that needs to change, or die a slow death for some...

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I work for a major taxi company in Auckland which is hurt most of all. And obviously everyone knows Taxi federation only looks after interests of this taxi company, same director in this company and fedration board ( isn't it interesting)
Whenever there is media news and comments options, messages spread around to jump on to internet and oppose all the comments which are in favour of Uber.

Personally I believe, only people opposing everywhere on internet are hurt taxi drivers with not real names obviously.

But this is future, taxis I believe are charging extremely high, and that is reason Uber is successful. If these companies took care earlier, Uber would have found it hard to enter market.

They still are doing every negative publicity and all dirty tactics including involving police, but the real thing which is going to work is pricing, which they are not willing to even talk about.

Uber is future and has got everyone happy.

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The taxi federation and companies are missing the point and deserve to go out of business. Customers use UBER because it is a better experience that gives the customer more control. These companies have had years to build a decent APP that competes, the technology all exists. Instead they continue to rip us off, charge $2.50 for using a credit card and have no idea of how to get anywhere.
Any wonder UBER is the fastest growing taxi company on the planet?
I travel extensively and have used UBER for years overseas, I'm delighted they are here and look forward to the day they introduce self driving cars and really disrupt the world. Anyone who is currently driving needs to start training for the new age.
Ben

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I carpool to work and pay $40 per week towards the cost of my colleagues petrol, this is an pre agreed arrangement, I also own a cell phone, are we breaking the law?

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I HATE using a taxi in a city where there is a monopoly or duopoly and the customer is royally ripped off, $160 from the Airport to the Shore!!, ridiculous charges for using a credit card and inconsistent service, the market should dictate the success or failure of both Uber and the current Taxi companies, not our police

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Re all the comments around Crime / Safety that Uber apparently exposes its customers / drivers to - A Quick Google of "Taxi Crime NZ" brings 2 sad articles One story from December 2014, a Taxi driver molested 2 women in a separate instances in Mt Roskill (he covered the camera in the car!) The instant feedback that Uber makes you provide would mean the driver would have been caught after the first victim made a complaint, and presumably got him banned from the service before he could carry out the 2nd crime.

The 2nd story is a poor Taxi driver in Henderson in October who was beaten up and robbed when the passenger did not have any cash to pay the fare. Uber avoids this situation as its all on Visa cards so no cash needed and you don't even need you Visa on you as it is preloaded into the system. There is no passenger that would not be able to pay.

Just saying.

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Someone commented about taxis being safer than Uber. Really? Serious?
Read this http://m.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11385892

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With silly dinosaur laws operative, why not change the Uber offering here to a "chat and local guide service" whilst I drive you where you want to go? The cost is time related or agreed upfront, nice and simple.

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Uber is good. Had no issues with drivers... Ive used Zoomy, even Cabchooze apps half the time cant get a cab..

Yet Uber, 9times out of 10.. turn up... the only time they let me down.. i was fairly compensated with 2 free rides.

My local taxi company gives me jack when they leave my on the side of the road for hours... or rip me off when the driver overcharges me or goes the long way.

Uber is a good alternative... to traditional Taxis... and I cant wait to see more of them in my part of Auckland...

Theres room for both to co-exist

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If only what you say is accurate. Alas it's wrong, bordering on dishonest.
Try harder Iain.

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Uber has changed mobile app industry overnight. Many services have benefitted using the uber business model like food delivery, grocery, dog walking etc., Uber business model can be cloned and can be implemented for android or IOS phone. Uber app source code is the only option when you needed to create an uber clone. Uber is only for taxi service but this source code can be re-coded for various needs of the business provider. ondemandbay.com

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i think it is good have competitions for consumer. cheap price and good services will always in a favor of consumer. but in saying that Uber should be operate in alevel of playing field and take on repsonsiblilties for their brand incase unknown risks involve.
All companies should be responsible for how they're operate.....not just to leave it to customer and driver to deal with when accident happen. it is not fair for consumer and drivers as they doing all the works and the only one who prosper is an outsiders!
if you're going to operate in nz, you must have a physical contact address in nz.....so people can contact company directly when things goes wrong.....not just emails to people not in nz and wait 12hrs for respond.....that will be too late to act to protect consumer or drivers.
As Uber, if you willing to make a brand and afortune in nz...you must be willing to take on responsibilities as operators in nz do to protect the consumer and your drivers in nz when things goes wrong.
At the moment i think Uber is pouring money from its own pocket to invest in drivers and consumer but 0 into the safety of the consumer and drivers.
Uber dont even have a physical address in new zealand for both parties( consumer and driver) to contact them incase emergency, only way to contact Uber is vai email and that show Uber have no interests in taking up responsibilities for their operation.
Uber is a billion dollars asset company and they investing in drivers and consumer hundred and thousand or million of dollars since they started in auckland and wellington.....why can't they invest in a small cost of physical address ( office) to operate and deal with the complaince?
Uber take commision from drivers 20% for a job, they controlled the consumer credit cards and their driver by using the feedback system on their app.
As their feedback system....i think it not very reliable and misleading as consumer and drivers have no controll over it but only uber.
the stars on uber driver profile and consumer is misleading!
As the uber driver, the stars will go up or down is not just depend on how the customer rate them..its how driver spend their time with uber...that's what consumer should realised!
As the uber customer, stars does not matter....you will be pick up doesnt matter how low the star is as driver have no choice but to pick up...if driver dooes not pick you up....their star will decrease. customer will always win!
As Uber, they dont care how both parties did it as long as the transaction complete, they already earned 20% commission for a job and the consumer's credit card is in their hand.

Uber is the one that enjoy the fruit of labour without having to committed to any responsibilities.

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