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Uber’s ‘hustler wonks’ defend taxi app

Uber Technologies Inc. signage stands inside the company's office prior to Senator Marco Rubio, a Republican from Florida, speaking in Washington, D.C., U.S., on Monday, March 24, 2014. Rubio addressed the need to adapt antiquated government regulations to increase economic opportunities for the 21st century and outdated regulations limit consumer choice. Photographer: Andrew Harrer/Bloomberg©Bloomberg

When Uber hits a regulatory roadblock, it sends in the “hustler wonks”.

Fuelled by last summer’s $258m investment from Google Ventures and TPG, Uber operates in almost 100 cities, twice as many as six months ago. But throughout the driver-hailing app’s rapid expansion, it has faced court challenges from taxi unions, fines from local governments and even threats of violence against its drivers.

That’s when Uber’s public-policy team is flown in, as it was last week to Berlin and Brussels. Corey Owens, the former Facebook manager who heads Uber’s public policy unit, calls his 12-person team “scrappy and lean”.

“The reason we look for hustler wonks is that transportation policy intersects with a lot of legal regimes,” he says. “You need someone thinking about the future of cities: a wonk. The reason we hire hustlers is the taxi industry has existed for more than 300 years . . . The only way to disrupt that industry is to think creatively and aggressively.”

Yet Uber’s mission to become “everyone’s private driver” is itself being disrupted by the establishment.

Last week Uber drivers in Brussels were threatened with €10,000 fines for carrying private passengers. The order was branded “outrageous” by Neelie Kroes, the European Union’s digital commissioner. But two days later, a Berlin court sided with the local taxi association against Uber in ruling that its drivers are in effect rental car businesses rather than taxis.

That classification of Uber’s service, which can hail professional limos or part-time “ride-sharing” drivers but does not employ either directly, is a familiar challenge to Mr Owens – and often trickier to handle than the tough-but-clear rules in New York and London.

“What you’re seeing in Berlin or Brussels is a repeat of what we saw in Dallas or Boston,” he says.

The San Francisco start-up and rivals such as Lyft continue to operate in Dallas and Boston despite long-running inquiries by the city halls there that have so far failed to produce clear new rules. “If the trajectory in Asia and Europe is the same as we’ve seen in the US, those cities that start with ambiguity and try to move into aggressively protectionist camps – that doesn’t tend to end well for the cities.”

Whatever happens, after being valued last year at more than $3bn, Uber cannot afford to slow down.

Lyft, its chief Silicon Valley rival, recently received a $250m investment that puts the ride-sharing start-up’s total funding ahead of Uber’s. Other rivals include the Alibaba-backed Kuaidi Dache in China or London’s Hailo.

However, all these strongly funded rivals face a common competitor in the law and the traditional taxi business.

“You can’t regulate them like taxis because they’re not. This is something fundamentally new,” says Nicole Shanahan, a lawyer-turned-tech entrepreneur.

“If other countries are too hasty about taking ride-sharing out, they risk being perceived as unfriendly to innovation,” says Ms Shanahan, editor at the Santa Clara High Tech Law Journal and chair of a recent Silicon Valley event on regulation and the sharing economy.

Last September, California became the first in the US to regulate ride-sharing companies, creating a new category of “transportation network companies” that are required to train drivers, run background checks and provide insurance.

Uber initially challenged the Californian rules, but Mr Owens now hails it as a “full embrace of innovation in transportation”.

But as new battles begin abroad, Uber – which has been hit by calls in Miami and Paris for minimum fares and wait times – faces fresh problems on its home front.

On New Year’s eve, an Uber driver killed a six year-old girl in San Francisco. Uber has denied responsibility, because the driver was not carrying a passenger at the time of the accident. The child’s family has sued the company. In the wake of the incident, the Californian Public Utilities Commission has reopened its inquiry into ride-sharing.

So Uber has done what it does best: hustled. It updated its $1m insurance policy last month to add commercial liability coverage between trips. Last week it added a new $1 “safe rides fee” for some rides to cover increased costs associated with future development of safety initiatives. So, even as it fights the minimum fares imposed by some cities, it has added one of its own.

Despite these challenges at home and abroad, Uber is confident that even the likes of Berlin and Brussels will eventually come around to its point of view.

“The arc of history is long, but it bends towards Uber,” says Mr Owens. “We are seeing that globally.”