Ridesharing company Uber has pledged to pay $20 million in order to settle allegations over the misselling of its earning potential. Their website Uber x had claimed that drivers earned $90,000 in New York and $74,000 in San Francisco. It turned out the real figures were considerably less than this. Filings to the Federal Trade Commision have shown the details.
The problems add to recent issues for the company over its self driving cars in San Francisco. While the dust has now settled on their move it goes to show that there have been significant teething problems for the wildly popular service. They have since moved their self driving car operation to Arizona after problems with the state of California, and more specifically their Department of Motor Vehicles. The spat came about after California DMV warned the companies that they required permits for the use of the vehicles. The company rejected the assertions and refused to pay up. After the DMV threatened to remove the vehicles from the road, the company decided to move its operation to Arizona.
They also have to deal with a rising opponent in Lyft. The company has been quietly acquiring drivers and customers, and is now picking up at a significant rate. The pickup of the two companies is only going to add more pressure to traditional taxi services. Rules in many countries simply aren’t designed to deal with the new business model, and traditional services are taking the hit. In London UK, there have been significant problems caused by black cab drivers protesting about the rise of Uber there. They have also had similar issues around the world. The disruptive nature of these new startups means that traditional models are simply not up to the task of stopping them in their tracks.
There will be significant pleasure taken in the traditional taxi world at the news. But the stark warnings are there. If the traditional model doesn’t change, then they face extinction. Many will be keen to try and avoid moving with the times, but that may indeed be their downfall.
Joseph is a 34 year old freelance writer from London. He has a wide interest in politics and specialises in the subject. He's also a blog writer in his spare time.