‘Uber Wars’: How regulations almost froze-out a brilliant innovation

Matt K. Lewis Senior Contributor
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Innovation and free markets can make our lives better. Such is the case with Uber, the app that connects you with a driver “at the click of a button.”

For the consumer and the company, it’s a win/win. Of course, not everybody wins. Creative destruction has consequences. Just as the automobile killed the horse and buggy, incumbent cab companies in a lot of major citites are obviously not happy with Uber. And so, in places like the nation’s capital, the DC Taxicab Commission has attempted to freeze Uber out, via onerous governmental regulations. And that’s what a new short documentary, Uber Wars, (written and directed by Rob Montz) is all about.

William Beutler, president of Beutler Ink, and a co-producer of the doc recently sat down with me to discuss the company and the project (listen to our full conversation here.) But before we get into that, for those who haven’t used Uber, here’s how the app works: You just click a button on your smart phone, and a driver shows up (usually in a matter of minutes.) Because of GPS technology, they know where you are — and they can summon a driver who already happens to be in the neighborhood (you can track where the driver currently is. And they send you a text message when you place the order, and when the car arrives to collect you).

My experience has been that service is typically very good. That’s because it’s not easy to become (or remain) an Uber-certified driver. After each ride, customers and drivers rate each other — and drivers who earn poor ratings are weeded out. Drivers have a strong incentive to provide a safe, clean, professional environment, because — unlike with cab companies — anonymity is out the window — and reputations are at stake.

“Uber takes that very seriously,” says Beutler, recalling that once he gave a driver just 3 out of a possible 5 stars, and “within a few hours, I get an email from someone in the Uber office…the customer service is really very good,” he says.

Another benefit: There is no need to carry cash or to tip. That’s all build into the system. Your credit card will automatically be billed. Customers get safe and clean cars for a reasonable price (“It’s an affordable luxury,” says Beutler.) And drivers (many of whom already own their car and/or car service business, but may have some down time before their next client) get to make some extra money — in a pretty efficient manner.

The irony, of course, is that urban hipsters love this technology, and yet their liberal ideology is responsible for trying to snuff out such technological innovation. Beutler and I discuss this, and more, on the podcast.

As you might have gathered, Beutler and I are both fans of the technology. But his film isn’t about extolling the virtues of the app, but instead, telling the story of how the company had to fight for the right to do business.

And the scary thing is how — in having to fight for their very survival — Uber had to effectively go over to the dark side. Yes, of course, they hired lobbyists and co-opted local politicians. That’s, unfortunately, the unseemly part of surviving in a hostile business environment. But “the part of it that is less laudatory,” says Beutler, is that Uber was “instrumental in helping to draw up new occupational licensing requirements for drivers in Washington. And what did they do? They, of course, got it tailored to Uber’s business model, and to effectively shutout [competitors] Sidecar and Lyft.”

It’s a fascinating story, and — I hope — instructive for young progressives who love technology, yet support a political ideology (and liberal politicians) that regularly tries to stifle it.

Listen to streaming audio here and download the podcast on iTunes.

Matt K. Lewis