Note: I sent this email today in response to the news that the City of Chicago’s “consumer protection” bureau is about to shut down the Uber black car service in Chicago. I hope someone in Chicago reads it!
Dear Mayor Emanuel, Rosemary Krimbel, Michelle Smith and the City of Chicago,
I was disheartened to hear that the Department of Business Affairs and Consumer Protection is seriously considering an addition to its regulations, the No Measured Rates Provision (PPV Sec. 1.10), that will restrict the use of certain technologies in reserving black cars in Chicago. It is no secret that these new subsections are an attempt to curtail the productive activities of one service in particular, Uber, which has been running a premium black car reservation service in several US cities since 2011. Uber has unequivocally stated that if these regulations go into effect, they will be forced to shut down their black car service in Chicago.
As an Uber customer and a 5-year former resident of Chicago, Ward 43, I am appalled at the actions taken by the BACP in what is a transparent (and thus far, almost successful) attempt to cut out competition and reduce consumer choice in Chicago, backed by the established taxi industry against innovators like Uber. These new regulations are nothing less than an attack on the consumer and the economy.
The origin of these new rules is supposedly the department of “Consumer Protection,” but it is unclear which consumers these regulations are supposed to protect. Customers of Uber are certainly aware of the service they are buying when they download the Uber app, enter their credit card information, and order a car. It is hard to imagine that the customers use this service willingly and pay for it–and tell their friends about it–if they didn’t derive some benefit from it. Why would thousands of customers have flocked to Uber if it wasn’t a better choice? And if it’s a worse choice, what’s the harm in letting Uber compete for customers like every other company? Even if some customers have been ripped off (which I doubt given Uber’s excellent customer service) it is wholly unfair to deprive thousands of happy customers of their choices because a vocal few are dissatisfied. By that logic, every company in Chicago with a few unsatisfied customers could face censure and delicensing.
If you don’t care about the consumer, what about the worker? Over 1,000 drivers in Chicago depend on Uber for income. These new regulations would put these drivers out of work in an already depressed economy. Uber provides an alternative employment option for drivers to make money from their assets and skills, and put cars to use that would otherwise go undriven. Drivers for Uber stand to lose the most from your unilateral action–hard working people who provide these services and make a living off of them. I have spoken to Uber drivers, and drivers for comparable services like Lyft and Sidecar, who are happy and vocal about their ability to choose among many options for earning a living. Shutting down Uber takes away employment options for good service providers, and indirectly creates a monopsony among existing employers which can be used to exploit drivers and drive down wages and working conditions.
If you have no interest in the consumer or the worker, what about the investor? Uber has raised $49.5 million in venture funding since launching in January 2011. Investors saw the long term potential of a service like Uber to provide a service, create jobs, grow the economy and return dividends. If your new rules go into effect, and other cities follow suit (as many of them already have), the willingness of future investors to take a risk on innovation, especially in a badly under-innovated space like transportation, would be affected. In addition, entrepreneurs like Garret Camp and Travis Kalanick are vital to economic growth and improving the quality of life for everyone else. Would they have taken the leap to start Uber if they had known how hostile markets like Chicago would be to their innovation? Where would our economy be without investors and entrepreneurs like the good people at Uber?
Of course, the dirty secret is that these regulations have nothing to do with consumer protection, and everything to do with legally strong-arming out competition. It is not a coincidence that a coalition of industry Yellow Group, Yellow Cab Affiliation, Taxi Affiliation Services, YC1, 5 Star Flash, Chicago Medallion One and Your Private Limousine all filed suit against Uber on October 5 in an attempt to shut down Uber. It’s one thing to let a lawsuit work its way through the courts in a judicial review; it’s quite another thing to create an end run around any dissent by changing the regulations unilaterally. It seems wholly capricious that one swipe of a pen can threaten the livelihood of thousands of people, put millions of dollars of venture funding at risk, and take away the transportation options of countless happy customers.
But, given that you have that power, why not use it wisely? Instead of stifling innovation, let the market open and let consumer choice drive the economy. Put the consumer in the front seat, where companies like Uber have to be accountable to the people that matter most: their customers.
I hope you will do the right thing and revoke these proposed rules before it’s too late.
San Francisco, CA