Ryan Ray
In its vigorous crusade to legalize “ridesharing,” Uber has made some enemies among decision makers. Two days after the firm announced a pointed withdrawal from all operations in Broward County, officials in Key West are now saying they may arrest drivers who run afoul of local ordinances banning electronic ride-hailing.
Meanwhile in Paris, French officials recently detained top Uber executives for questioning in a possible criminal probe.
Uber’s fellow travelers of the new so-called sharing economy at Airbnb, on the other hand, have steadily made gains and earned plaudits from pols around the globe for its similarly “disruptive” business innovations.
Mark Scott of The New York Times writes that the difference may be in Airbnb’s kinder, gentler approach to appealing to regulators.
Uber and Airbnb are similar in many ways. Both born in San Francisco, the companies are now two of the largest entrants in the so-called on-demand economy, in which services are available at the touch of a smartphone button. They are both flush with investor money — with valuations in the tens of billions of dollars — and are using the cash to expand rapidly around the world.
But the starkly different paths in France for these companies lay bare contrasting strategies as they encounter the world of global regulators. Since it began in 2009, Uber has entered city after city, in Europe and elsewhere, with a largely catch-me-if-you-can attitude. Airbnb … has instead tilted toward courting local politicians in many of its most popular markets.
Though Uber is by no means going broke because of its touchy relationships with transit policymakers in Florida and around the world, it may inhibit their long-term growth, writes Scott.
So far, Uber’s approach has not significantly slowed it down. The company operates in more than 300 cities in almost 60 countries and is valued by investors at more than $40 billion. But Uber’s aggressive attitude has put it at odds with regulators in many of the cities that are crucial to the company’s global ambitions.
“A lot of these start-ups initially don’t think much about regulation,” said Thilo Koslowski, head of the automotive practice at Gartner, a technology research company in California. “It’s all about having a punch strategy. They do things first, then ask questions later. As they mature, that starts to change.”
Airbnb has not gone unscathed by regulators. It has faced significant clampdowns in American cities like New York, where some local policy makers have argued that Airbnb rentals could reduce the amount of long-term housing in the city … But by and large, Airbnb’s approach has been to work with regulators, not against them.
Recent weeks have seen Uber escalate its abrasive tactics even further, with local officials predictably left nonplussed.
Uber’s problems escalated last week, when taxi drivers blocked roads, burned tires and attacked drivers who they thought were working for Uber.
“Modernity is innovation, the quality of service, the sharing economy,” said Bernard Cazeneuve, France’s interior minister, after the anti-Uber demonstrations spread across the country. “It is not black-market jobs and clandestine work organized against the rule of law by Uber.”
In the end it seems, though Uber is helping to remake the economy, it cannot remake the government apparatuses that regulate them. At least not yet.
“Any government can shut you down, so you have to be willing to play the regulatory game,” said Gerald R. Faulhaber, professor emeritus of business economics and public policy at the Wharton School at the University of Pennsylvania. “You need to work with regulators. There’s no way around that.”
