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China Businesses Government The Almighty Buck Transportation Politics

Uber Office Raided By Police In China, Accused of Running 'Illegal' Car Business 176

Posted by timothy from the didn't-ask-enough-permission dept.
albert555 writes: Uber's curse keeps on striking after Uber's office in the southern Chinese city of Guangzhou was raided by authorities on the 30th of April 2015. Uber is accused of running an 'illegal' transport service, according to the Guangzhou Daily. Uber has been implanted in China since August 2013 and is suspected of not having the proper qualifications to run a private car business in the city. Following the recent German court ban two weeks ago, who will win the fight for private transportation? Long-term, established transportation companies with powerful lobbying arms or the newcomer making use of disruptive technology? Does Schumpeter's creative destruction also apply to the transportation sector?
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Uber Office Raided By Police In China, Accused of Running 'Illegal' Car Business More

Uber Office Raided By Police In China, Accused of Running 'Illegal' Car Business

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  • Who will win? (Score:5, Insightful)

    by Anonymous Coward on Monday May 04, 2015 @07:11AM (#49610381)

    >Following the recent German court ban two weeks ago, who will win the fight for private transportation? Long-term, established transportation companies with powerful lobbying arms or the newcomer making use of disruptive technology?

    Timothy, have you gone full retard? The whole uber issue is that they break the law all over the world are un/under insured, time after time after time. This has nothing to do with "Long-term, established transportation companies with powerful lobbying arms". And neither do uber make use of disruptive technology, their system is the same or similar to many other systems, its just they have raised more VC than anyone else and spend a lot more money on advertising.

    • Re: (Score:1)

      by tmosley ( 996283 )
      Breaking oppressive and illegitimate laws is good for the people and humanity.

      Governments, especially the likes of the Chinese government, absolutely do NOT have the monopoly on moral authority.

      And yes, it has everything to do with "Long-term, established transportation companies with powerful lobbying arms". They are the ones who LITERALLY WROTE the legislation in question, and they did it to stop competition. This is not legitimate, and the politicians who took up this cause should be tried for co

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      Could this be the first company whose business model is to break the law, i.e. a criminal enterprise with VC funding? Of course other companies have broken the law, but Uber's specific business model is to break the law and hope to get away with it or get the law changed.

      It's kinda bizarre. Maybe VC firms feel a bit uneasy about investing the maffia due to the level of violence, but Uber sounds kinda legit and has a lot of willing customers so is somehow okay. Maybe it sounds more like the kind of white col

      • Hardly. AirBnb and PayPal are both good examples of this sort of thing. PayPal got raided a lot and got sent C&D letters by various state regulators when they were rolling out across the USA. Eventually they had to sell to eBay (their primary competitor) to get enough money and political immunity to survive. There's a book about it called the PayPal Wars that goes into more detail on this.

        • Re: (Score:2)

          by tlhIngan ( 30335 )

          Hardly. AirBnb and PayPal are both good examples of this sort of thing. PayPal got raided a lot and got sent C&D letters by various state regulators when they were rolling out across the USA. Eventually they had to sell to eBay (their primary competitor) to get enough money and political immunity to survive. There's a book about it called the PayPal Wars that goes into more detail on this.

          eBay and paypal were never competitors.

          eBay and Paypal are synergistic - eBay needed a low-friction payment platform

  • Uber must to, or work to change the laws

    just like everybody else

    • Re: (Score:1, Flamebait)

      by tmosley ( 996283 )
      Aztecs legally sacrificed children to their gods. Should their parents have worked to change the laws to divest legal authority from the priest class while allowing their children to be slaughtered? Would a (non-violent) rebellion have been justified?

      • Re: (Score:2)

        by Dunbal ( 464142 ) *
        Are you seriously comparing transportation with human sacrifice?

  • Comment removed (Score:5, Insightful)

    by account_deleted ( 4530225 ) on Monday May 04, 2015 @07:14AM (#49610409)
    Comment removed based on user account deletion

  • Skewed (Score:2, Insightful)

    by Anonymous Coward

    The established transportation service does *not* have to lobby. The relevant laws where established a long long time ago.

    It is uber who must lobby, and it should do so *before* opening up business.

    • The established transportation service does *not* have to lobby. The relevant laws where established a long long time ago.

      It is uber who must lobby, and it should do so *before* opening up business.

      Not to mention, if they do lobby and manage to get the law changed such that they don't have to have insurance or be registered or have medallions, the same law would apply to the other transportation companies, so Uber STILL wouldn't have any advantage. They talk about being a tech company, but I don't see where they have any more tech than any other company. They have a mobile phone app and a scheduling system. Color me unimpressed. Plenty of other transportation companies have those as well and ALSO hav

      • Ah, but Uber's story only works if they can basically re-define what the local law is according to their own wishes.

        Uber likes to hide behind their lie about only being a tech company, and they love to stress this whole "little guy fighting for the underdog".

        The problem is they have to deal with reality, and the Libertarian notion of subverting regulations making you a noble and better person isn't an argument which is accepted in most places. In fact, it will simply get you arrested or fined.

        The regulatio

        • I'm in total agreement with you. If Uber wants to claim to be a technology company then I am all about that. Just stop transporting people. Develop your smartphone app and your scheduling system and sell it to Yellow Cab, ABC Limo, whoever. Let the transportation companies deal with the regulations. It is what they have been doing for 100 years.
          • That doesn't solve any problem. The issue is that in many places, taxis are given government-granted x-opoly in the form of taxi medallions which effectively shield them from competition, allowing them to overcharge.
            In addition, it's pretty dumb to begin with that you can take some action which is perfectly legal (in this case, letting someone ride in your car), but as soon as you add a transfer of currency (also perfectly legal), it somehow becomes illegal.

            • in many places, taxis are given government-granted x-opoly in the form of taxi medallions

              So could we start with saying that in only such "many places", Uber's activities are moral, and even there illegal?

              At other places, they are both immoral and illegal so we will talk about them when they shut their services at least in places where there are no medallions. And let us be clear from the start that Uber knew about this immorality and illegality when they started their business and it didn't stop them from operating in such areas, so Uber cannot ride any high horse - moral or legal.

    • Re: (Score:2)

      by tmosley ( 996283 )
      "The relevant laws where established a long long time ago."

      And who do you think wrote those laws?

      Uber is wise to open immediately, since the people using it absolutely love it, and will complain if the government tries to get rid of them. The solution is to get rid of the longstanding laws that were born of corruption. They only serve the people who hired the now long dead lobbyists that paid off a few long dead politicians to sign unconstitutional legislation in smoke filled back rooms far from the

      • Re: (Score:2)

        by bws111 ( 1216812 )

        Yeah, the 'transportation industry' wrote those laws. Just like the meat packing industry wrote the meat packing laws, the building industry wrote the fire codes, the coal industry wrote the clean air laws, the mining industry wrote the mining safety laws, the restaurant industry wrote the health codes, etc.

        Maybe you should read up on what conditions were like before those laws (and still are in some places), then maybe you could understand why the PEOPLE wanted those laws.

        • Re: (Score:2)

          by tmosley ( 996283 )
          No, meat packing laws were written after "The Jungle" was published, something you are no doubt referencing. Each case of those were, indeed, written by politicians, but only AFTER some tragedy or news article or book brought the subject into the full view of the people, where they demanded action. This is a case only in the vast MINORITY of regulations, most of which you have already named.

          Just because a government makes a law against killing babies doesn't mean that every law they create is legitimat

          • Re: (Score:2)

            by bws111 ( 1216812 )

            You don't think there were tragedies, news reports, public outrage about unregulated cabs? I suggest you do some research.

            • Re: (Score:2)

              by tmosley ( 996283 )
              I'm not talking about gypsy cabs, I'm talking about Ubers, who are tracked by GPS, along with their riders, and as a result, can't rape or murder anyone while working without getting caught. And don't talk to me about the guy in India. He wasn't working when he raped that woman.

              Might as well have regulations on stores because the employees might rape or murder the customers.

              • Re: (Score:2)

                by bws111 ( 1216812 )

                So SOME types of unregulated cabs should not exist, but Uber is special so it gets a free pass? The law does not work that way.

                Also, the primary purpose of these laws in not to prevent murder and rape of fares, it is to protect the safety of the public who are NOT fares. For instance, your wonderful GPS (and Ubers much-ballyhooed 'insurance') does nothing for the poor schlub who gets mowed down by an Uber driver on the way to pick up a fare.

                • Re: (Score:2)

                  by tmosley ( 996283 )
                  " but Uber is special so it gets a free pass"

                  Uber is special, for the reason I mentioned. Not that gypsy cabs should be regulated either. If I want to offer someone a ride for pay, that is a private transaction between me and another person. The government has no business butting in.

                  If an Uber driver runs over someone, how is that different from a regular person running over someone? Or are you saying that people need to be punished for trying to make a little money?

                  • Re: (Score:2)

                    by bws111 ( 1216812 )

                    The 'regular driver' is INSURED, so the victim is compensated. An Uber driver on his way to pick someone up is driving for commercial purposes so his 'regular' insurance will not pay, and neither will Ubers insurance as it is in effect only when there is a passenger. Yes, this has happened more than once.

                    • Re: (Score:2)

                      by tmosley ( 996283 )
                      Sounds like you have a problem with insurance, then, not Uber. Perhaps the insurance industry needs some more regulation, or more likely, need to be sued until they figure out who is liable.

  • No matter what Uber says ... (Score:5, Insightful)

    by gstoddart ( 321705 ) on Monday May 04, 2015 @07:19AM (#49610421) Homepage

    Uber isn't some magical entity which exists outside of laws and regulations, no matter what its owners keep trying to tell us.

    Uber has basically said "why, no, we're special because we say so, and we don't give a crap about your laws", and then they go on to say "we're not a transport company, we're a tech company, who happens to behave like a transport company".

    I have precisely zero sympathy for Uber, and I think more places should be impounding cars and arresting people who have basically decided "fuck you, I'm going to run a commercial car service and keep saying loudly how I'm not a commercial car service".

    This bullshit about "Long-term, established transportation companies with powerful lobbying arms or the newcomer making use of disruptive technology?" is exactly that ... it's bullshit. It's how Uber tells their underdog story, but it's a complete lie.

    This has nothing to do with established players with powerful lobbying arms. This has everything to do with how governments have regulated commercial vehicles, and Uber using their bullshit story to sound like the plucky underdog.

    Uber is a tech startup, acting like a spoiled child, and decreeing they aren't subject to laws.

    The whole underdog thing makes for great PR copy, but is otherwise a complete fucking lie.

    • The trouble with impounding cars is that those aren't the people who are behind it all. They're just the people desperate enough to themselves into the ground for negative income once you subtract out costs like fuel and depreciation, or those gullible enough to think they are gonna be rich. Maybe a few true believers or those who just treat it like entertainment to meet people. It would be like attacking Herbalife by arresting every seller.

      But I agree with you about Uber not being a tech company. U.S

      • The trouble with impounding cars is that those aren't the people who are behind it all.

        Within the first week of Uber showing up in a city, you can hear quite plainly how this is an illegal cab, frequently operating with improper licensing and insurance, and which is in violation of the law.

        At which point, you are either a gullible fool who thinks he is going to 'fight the power'. Or you have willfully said "fuck it, I'll keep being an illegal cab and make some money".

        What you can't argue is that poor littl

      • Re: (Score:2)

        by msobkow ( 48369 )

        So by your logic, the police should never be bothered with "busting" street-level drug dealers, pick-pockets, or muggers because they aren't the "big fish" in their criminal organization.

        I don't give a damn if you're some greedy schmuck who bought into Uber's lies. You are providing the end service, and your activity is illegal, so why shouldn't the book be thrown at you?

        It's not like you're innocent. Even if you are ignorant of the law, that has never been held as an excuse in court.

    • Re:No matter what Uber says ... (Score:4, Insightful)

      by Nidi62 ( 1525137 ) on Monday May 04, 2015 @07:36AM (#49610493)
      If an airline was touting the fact thay they use uncertified mechanics, pilots without commercial ratings, and insuring 737s like they were single engine Pipers and that it makes them the cheapest and most competitive people would be all over them yelling for them to be shut down. That is essentially what Uber is doing. It's a lot easier to be cheap and convenient when you are ignoring laws and regulations that are put in for very good reasons.

    • The whole underdog thing makes for great PR copy, but is otherwise a complete fucking lie.

      Uber (valued at US$40 billion after its most recent funding)

      Yeah. Wish I could be that kind of underdog.

    • ...Uber is a tech startup, acting like a spoiled child, and decreeing they aren't subject to laws.

      The whole underdog thing makes for great PR copy, but is otherwise a complete fucking lie.

      OK, I get they want to be a startup and complain about the establishment.

      However, complaining about this establishment does have it's valid points.

      When you hear of taxi medallions costing hundreds of thousands, it reminds me of the restriction and control around county-issued liquor licenses. In fact, it's the exact same bullshit. And yeah, it is bullshit, because we've allowed greed and corruption to essentially block almost anyone from entering the market due to the costs that are out of fucking control

      • Re: (Score:3)

        by bws111 ( 1216812 )

        Medalliions cost what they cost because they are limited. They are limitied because there is only so much taxi service a city can handle. Adding more cars to the street doesn't move more people, it just creates more congestion. And congestion leads to aggressive driving and such stupity as using the sidewalk as a way around traffic. A glut of taxis means aggresive actions in trying to get fares (like picking up on the wrong side of the street, etc). A glut of taxis also means it is difficult for any pa

        • Medalliions cost what they cost because they are limited. They are limitied because there is only so much taxi service a city can handle. Adding more cars to the street doesn't move more people, it just creates more congestion. And congestion leads to aggressive driving and such stupity as using the sidewalk as a way around traffic. A glut of taxis means aggresive actions in trying to get fares (like picking up on the wrong side of the street, etc). A glut of taxis also means it is difficult for any particular taxi service to make enough money to stay in business. Who will survive? The one that spends the least money on luxuries like proper maintenance.

          Yes, this describes conditions before the taxi laws were introduced. It is why the people wanted regulation.

          There are good reasons for the taxi regulations and the medallion system. Just because you want to pretend they don't exist does not mean the don't exist in reality.

          So a taxi medallion at a cost of over $750,000 is somehow justified to you due to the need for scarcity?

          Oh, this should be downright fucking hilarious to hear your argument as to why liquor licenses cost so much, but hey I'm up for a laugh if you want to try and justify that corruption too.

          • Re: (Score:3)

            by bws111 ( 1216812 )

            Medallions and liquor licenses are not usually 'priced' (especially for high-dollar ones like you state), they are auctioned. The price goes that high because someone thinks it is worth it. Not that difficult of a concept.

            Of course, in many places there is not a single auction, there are different auctions for different classes of bidders (fleet operators vs owner/drivers, etc). Naturally the price of a owner/driver medallion is usually much less than you quote, but that never gets mentioned.

            Could they d

    • You forgot to add that people who are employed by Uber need to be investigated to make sure they have the added insurance required when you are transporting people for money.

      What should happen is insurance companies should use the service then cross-reference the driver with their insurance policy. If they don't have the required insurance, send them a bill.

      Same goes for the state department of revenue. Since these people are operating a business they need to claim the money on their tax returns, though t

  • Would a taxi service by any other name behave as badly? Apparently yes.

    Laws around taxi services exist for a reason, regardless of what uber would like people to believe.

    • Re: (Score:2)

      by tmosley ( 996283 )
      If you were a citizen of Nazi Germany, I suppose you would think that the laws for internment of undesireables was a good thing as well? How about in the good old USA? If not, please tell us what you would have done. One solution that you must apply in both cases.

  • In the long run, private industry will win, if only because the government cannot stifle disruptive competition forever. But in the meantime, government can -- and obviously will -- inconvenience an awful lot of people by fighting Uber.

    I see tons of posts here bashing Uber for not following the rules, basically saying they're competing unfairly with cab companies that are required to carry insurance, etc. All that is true, but it's also completely irrelevant. You do realize these cab companies came up wi

    • Re: (Score:2)

      by Dunbal ( 464142 ) *
      Private industry being the mentally unstable guy who will charge you a fee for sitting in his disgusting car which he has an expired license for, while you pray not to die from the fumes and that the car actually holds together long enough to get you to your destination. Laws exist to regulate private industry because private industry too easily focuses on the "my profit" part of the equation and not enough on the "quality of service" part. The race to low prices is a race to the bottom unless artificial fl

      • Private industry being the mentally unstable guy who will charge you a fee for sitting in his disgusting car which he has an expired license for, while you pray not to die from the fumes and that the car actually holds together long enough to get you to your destination. Laws exist to regulate private industry because private industry too easily focuses on the "my profit" part of the equation and not enough on the "quality of service" part.

        You amply illustrate the thinking of the nanny state. Yeah, people are just too fucking stupid to make their own decisions. Why not let the all powerful, all knowing, all seeing government tell you what's best for you.

        You talk about "minimum level of service acceptable" as if it were an absolute. Why don't you let people decide on what they'll accept instead of you -- or, by proxy, your totalitarian vision of government -- decide for them? What's acceptable to me may not be acceptable to you, but that d

        • Re: (Score:2)

          by Dunbal ( 464142 ) *
          Setting norms for industry is not "nanny state". Are you glad that the pilot of your airline has a license, the mechanics who work on the plane are certified, etc or is that "nanny state"? Maybe I should buy a plane and start flying people around. I have a history of heart disease and haven't actually flown anything apart from my dad's piper when I was a kid and he let me take the controls, but I have plenty of simulator time. I should start my own airline.

    • Ok, so what is your argument about Uber flouting the laws in the UK, where anyone can get commercial passenger carrying insurance and then get a taxi cab license from the local council for less than £3,000 to operate from a taxi rank or a private hire license to operate point to point on prebooking jobs?

      Is it perhaps because those drivers dont have to prove that they have taken out the commercial passenger carrying insurance, nor pay the license fees, and instead just sacrifice a smaller amount to Ube

  • AFAICT it was illegal.

  • Long-term, established transportation companies with powerful lobbying arms or the newcomer making use of disruptive technology?

    Who will win, long-term, established ecologies or kudzu?

    Maybe it's inevitably kudzu, but does that mean we should cheer for it? Cancer is also a disruption. Should all laws be dissolved if they get in the way of anyone's business plan? Why insist on anyone having drivers licenses at all, let alone commercial ratings and proper insurance to carry fares? It would be cheaper to build

    • Why insist on anyone having drivers licenses at all, let alone commercial ratings and proper insurance to carry fares?

      Good questions. You should reflect on them. Are those the best ways of ensuring road safety or are there better ones?

      It would be cheaper to build cars without seat belts and airbags.

      Indeed it would be. And that too is something you should reflect on.

      Let's disrupt that!

      Good idea. Let's replace it with something that makes people safer and saves money in the process.

  • Does Schumpeter's creative destruction also apply to the transportation sector?

    Obviously, the more crony capitalism and rent seeking there is in a sector, the harder it is to innovate, drive down prices, and deliver a better product, viz transportation, healthcare, education.

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