In 2015, the New York City Council declined to proceed with Mayor De Blasio’s proposal to cap the number of new Uber drivers (in part based on Uber’s vigorous advocacy). Looking back on that decision, the new Speaker of the New York City Council, Corey Johnson told WNYC radio that he had chosen the wrong approach. In particular, he explained, “given what we’ve seen and the explosive growth of this industry and how it’s affected the streets of New York City, I think we should have done more.”
Opposed De Blasio plan to limit number of vehicles
Concerned about growing congestion, New York City Mayor De Blasio proposed a bill to limit the issuance of new for-hire vehicle licenses. The proposal would have limited Uber to about 200 new drivers in New York during the subsequent year.
In response, Uber alerted its New York Customers — creating a “De Blasio’s Uber” feature that always showed either no cars available or a wait time of 25 minutes. Uber also sent emails to all Uber users in the district of New York Councilman Steve Levin who was sponsoring the bill. And Uber investor Ashton Kutcher Tweeted to criticize the proposal — as did Neil Patrick Harris, who had made money by Tweeting Uber signup links, as well as Kate Upton.
All told, Uber spent $1 million lobbying New York city government officials to defeat the driver cap bill.
Australian competition regulator scrutinized Uber Eats contracts
The Australian Competition and Consumer Commission said he would examine controversial contract provisions Uber required restaurants to accept when selling food through the Uber Eats delivery service. Restaurants complained about contract terms that said they, and not Uber, were responsible for late deliveries — though they thought it was Uber, and not them, that caused delays and was better positioned to make sure deliveries were on time.
EU’s top court said France can bring criminal charges against Uber managers
The Court of Justice of the European Union (Europe’s highest court) ruled that France can bring criminal proceedings against Uber. Uber had argued that its service was an “information society service,” but the Court said that Uber is a transport service. The difference was important: A new national law regulating an information society service would require that a member state (such as France) notify the Commission, and the absence of such notification would make the law invalid and unenforceable. But regulation of transport requires no such notification, making the law valid and enforceable.
Uber responded by saying the service at issue, UberPOP, was already discontinued in France.
Then-CEO Kalanick indicted in South Korea for violating transportation law
Then-CEO Travis Kalanick was indicted in South Korea in December 2014 for violating that country’s transportation law. South Korea’s Ministry of Land, Infrastructure and Transport said that Uber’s provision of paid transportation using unregistered vehicles was “clearly illegal activity,” and that this was the basis of the indictment.
Multiple competition regulators questioned Uber-Grab deal
Reviewing Uber’s proposed sale of its Southeast Asia business to Grab, the Competition Commisison of Singapore (CCS) announced that it is looking into the transaction.
Broadly, CCS said the proposed transaction would bring “substantial lessening of competition in relation to the chauffeured personal point-to-point transport passenger and booking services market in Singapore.” CCS therefore required Uber and Grab to maintain their pre-transaction pricing, policies, and products, and not to exchange any confidential information.
After CCS’s statement of concern, Malaysia’s Land Public Transport Commission also announced that it would examine the proposed transaction. The Philippines’ anti-trust agency, the Philippine Competition Commission, then stated similar concerns: “There are reasonable grounds that the said acquisition may likely substantially lessen, prevent, or restrict competition.”
Coverage from TechCrunch and prior critique from the author of this site.
Relationship with Arizona governor questioned
In its efforts to court Arizona governor Doug Ducey, Uber built a relationship with Ducey that was unusually close. The Guardian obtained emails showing that the relationship included joint press conferences, Uber service on the governor’s policy committees, Uber providing meeting space to the governor when he visited San Francisco, and even the governor potentially wearing an Uber shirt.
Ducey enacted policies favorable to Uber. In Phoenix, city staff reported “pressure placed on us by the governor” to enact policies that Uber requested. In one episode, Uber asked that the governor promote Uber Eats via a tweet, which he did the next day. Ducey’s Uber dealings were particularly close on the subject of self-driving cars. After California revoked DMV registration of Uber vehicles that had not obtained the permits California said were needed, Uber sought to bring those vehicles to adjacent Arizona, which the governor permitted. Moreover, prior to Uber’s announcement of its self-driving vehicles on the road in Arizona, Ducey had allowed the vehicles to operate unannounced.
The public benefit of Ducey’s pro-Uber policies was not always apparent. The governor touted collaboration between Uber and Arizona’s College of Optical Sciences, but that school’s dean commented that “Our dialog with Uber has not led to any significant ongoing research engagement.” The governor allowed Uber to test self-driving vehicles on Arizona roads, only to backtrack when an Uber self-driving vehicle struck and killed a pedestrian in Tempe, Arizona. The governor touted economic benefits expected to result from Uber’s activities in Arizona, but while Uber brought self-driving cars to the state, its engineering teams largely remained elsewhere.
Ordered to take self-driving vehicles off Arizona roads
After an Uber self-driving vehicle struck and killed a pedestrian in Tempe, Arizona, the state’s governor ordered all self-driving Uber vehicles off the road. The governor called Uber’s approach “an unquestionable failure to comply” with the state’s expectations for public safety.
Overlapping investor SoftBank sought to reduce competition
As Uber announced its sale of Southeast Asia assets to Grab, some flagged the overlapping investor that facilitated the transaction. In particular, SoftBank (a Japanese investment firm) held shares in both Grab and Uber. Owning part of both companies, SoftBank stood to profit no matter which one prevailed in the markets where both operated — but stood to lose if the firms engaged in continued competition with each other.
Furthermore, SoftBank specifically sought to broker peace between Grab and Uber: When investing in Uber in December 2017, SoftBank sought a discount exactly because it could influence Uber’s competitors across Asia.
Similar concerns arose from SoftBank holding shares in both Uber and Ola, a ride-hailing competitor in India. Discussing those overlapping holdings, SoftBank told the Economic Times of India: “we are hoping that we make peace between them at some point.” Such a “peace” could raise competition concerns in so far as it entailed competitors agreeing not to compete.
See Edelman’s critique of SoftBank’s role as well as economist Martin Schmalz’s tweet on the impact of cross-ownership.
Poised to sell Southeast Asia assets to Grab
Uber announced plans to sell its Southeast Asia assets to Grab, the dominant ride-hailing firm in that region. This transaction raised competition concerns because Grab and Uber jointly controlled the overwhelming majority of ride-hailing service in the region. The transaction thus created an effective monopoly for Grab — allowing the company to charge higher prices and fees, to the detriment of both drivers and passengers.