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Reinventing taxis, part 1: A Q&A with Uber’s Northwest regional manager

Posted by on September 16th, 2014 at 9:19 am

brooke

Brooke Steiger, Uber’s Washington general manager.
(Photo: M.Andersen/BikePortland)

Portland is now one of just two major U.S. cities where you can’t hail a ride with either Uber or Lyft — and that’s something the car-summoning companies would, of course, love to change.

The services essentially let anyone who passes their background checks become a paid cab driver using a personal car. But Uber has balked at expanding illegally into Portland, where you can be thrown in jail for six months for operating an unlicensed taxi.

We’ve been watching these trends closely because services like Uber are already having a huge impact on low-car life in other cities. Last week, I met a young Chicagoan who gets around by bicycle in nice weather but said she’s spent $2,000 on Uber this year for foul-weather commuting and late-night rides home; two years ago, she probably would have bought her own car by now and started using it for most trips.

Local media coverage of Uber has stuck with the basics: will they or won’t they? But we’d rather find a solution, so we sat down with two experts to explore the downsides, risks, complications and benefits of this rapidly spreading but controversial new service.

“I think the future is removing people out of their personal vehicles.”
— Brooke Steiger, Uber

Today’s Q&A is with Uber’s Seattle-based general manager for Washington state, Brooke Steiger, who talked with us last month about the ways Uber could fit into a low-car city and her answers to some of the complaints of Uber’s critics.

Tomorrow, we’ll be following up with a similar conversation with one of Uber’s loudest critics: the general manager of Portland-based Radio Cab.

Why would a company that makes it easier to travel by car be part of a low-car transportation network?

I think the future is removing people out of their personal vehicles. Providing more options to people will encourage that behavior. Options like Uber and bike share and public transportation feed into this huge option. I really see the future as options like Uber and no personal vehicles.

No personal vehicles?

Limited personal vehicle usage in the day-to-day.

I assume that eventually, Uber’s dream would be to get rid of the driver, too.

Obviously there are companies out there exploring driverless cars. There is new innovation coming out every single day.

This summer you reached a big compromise in Seattle over the amount of insurance Uber provides to its drivers if they hit somebody while they’re using the app.

We do carry $1 million when the driver is engaged in a trip. That covers anything from external property damage to, God forbid, if someone is hurt.

A different period is when you’re logged into the app. [But not driving someone.] In Seattle, we currently have $100,000 in contingent coverage during that period, and we will be raising that to $300,000. That means in the event that the driver’s insurance doesn’t cover, then our coverage will kick in.

But you say that’s a short-term deal and you’re lobbying Washington state for a different insurance requirement. What requirement are you hoping for long-term?

In Colorado, the requirement is to have $1 million while engaged in a trip and $100,000 in contingent coverage when you’re logged into the app.

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Wouldn’t Uber lead to distracted driving? The only way you can be an Uber driver is to be looking at your phone while you’re behind the wheel, right?

The very simple thing is you mount your phone on the dash. What happens when a request comes in is the phone beeps. So you don’t have to look at the phone. And you can touch any point on the screen to accept it. It’s simpler than changing your radio station.

“You don’t have to look at the phone. And you can touch any point on the screen to accept it. It’s simpler than changing your radio station.”
— Brooke Steiger, Uber

Why do we need Uber? What’s wrong with the current taxi system?

Uber brings an extreme amount of accessibility for the rider. It just provides this extra level of safety that is really unmatched. And from the driver level, it provides a level of opportunity that they love.

In any city that we enter, the city sees so many benefits that I think it’s something that Portland should look into. It’s pretty phenomenal to see the reduction of DUIs. It’s taking people off the road.

I also remember seeing a headline that Uber was trying to cut prices so low that using UberX, your peer-to-peer taxi service, is cheaper than owning a car.

It was a 25 percent price cut, in January.

Our first product was Uber Black [a towncar summoning service]. There were so many towncars that have downtime. It really helped these small businesses succeed. It was also the idea of being able to get a very, very nice ride on demand.

We had a huge interest in both a greener option and a more cost-effective option. UberX seeemed to be a perfect option for that. And we also want to encourage people to get rid of their vehicle. Providing an affordable alternative was essential.

One of the most important taxi regulations is that they have to accept every trip request. Uber drivers don’t. So what’s to stop your drivers from rejecting an East Portland grandma’s 5-minute trip to the grocery store, because it’s not going to be profitable enough?

If a request comes in, they’re not required to accept that request. However, when you get the request, you have 10 seconds to accept. You don’t know where that person is going. They won’t know how much money that trip is worth. I think that’s why the taxi regulations are in place.

We provide thousands and thousands of minimum and short trips a day. We’ve had no issues at all with people not taking those short trips.

But the driver could still deny the ride based on the location of the trip, right?

We’re always trying to meet all that demand that we see. So if we see that there is demand in an area of town that there typically aren’t cars available in, then that’s something that we communicate to drivers as well. In Seattle, we actively messaged drivers that there were rides in Bellevue that weren’t being accepted, and the supply built up.

Qs & As edited for brevity and clarity. Watch this space tomorrow for our Q&A with Steve Entler, general manager of Radio Cab, Portland’s largest taxi company.

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15 Comments
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    Michael M. September 16, 2014 at 10:37 am

    Good interview. I wish you’d asked her about Uber’s underhanded tactics against it’s competitors, particularly Lyft, like booking thousands of fake rides and then cancelling them last minute. I suppose she would have just denied it, which seems to be the corporate line. It makes me question whether we really want these kinds of companies operating in Portland.

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      dan September 16, 2014 at 11:17 am

      Yeah, we should let the cab companies keep their monopoly on shady business practices like not showing up. 😉

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      Alex Reed September 16, 2014 at 11:50 am

      Here’s a seemingly balanced article about that topic:
      http://www.theverge.com/2014/8/29/6083867/lyft-releases-more-details-on-ubers-sophisticated-poaching-campaign

      It seems like Uber wasn’t trying to directly take away rides from Lyft by occupying its drivers with rides that were then cancelled. It was using contractors to book actual rides with Lyft drivers and, during the ride, talk to them about joining Uber. Apparently the contractors were cancelling a lot of rides in the process (supposedly, Uber has directed them since to stop cancelling rides). I think it’s still a no-no to impose that cost on the drivers, but it doesn’t smell like an overtly anti-competitive campaign by Uber corporate to me.

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    A.K. September 16, 2014 at 10:41 am

    “Last week, I met a young Chicagoan who gets around by bicycle in nice weather but said she’s spent $2,000 on Uber this year for foul-weather commuting and late-night rides home”

    On the surface that looks like a lot, but is still cheaper than a car – even if you own a car outright, the cost of insurance + gas + maintenance + parking is likely to exceed that amount easily.

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      dan September 16, 2014 at 11:19 am

      And monthly transit passes are $100, so she’s running a bit more than 2x what it would cost to carry a bus pass and take all your trips on transit. Not horrible.

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      davemess September 17, 2014 at 12:49 pm

      No true. If you have a car you own and don’t drive much, it can cost you less than $2k year. Cheap cars don’t cost a ton for insurance ($200-300/yr). Registration is roughly $100. Even with $300-500 maintenance, that still leaves you with over 27 tanks of gas (roughly $40/tank) at $2,000 total. And there are a lot less places that require payment for parking in this city than have free parking.

      I agree that isn’t a crazy amount to spend on Uber, but one can own/operate a cheap car for under $2k/year.

      (Granted this is all barring having no MAJOR repairs necessary on the car, but plenty of cars go years and years between major repairs)

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    Rodeocab September 16, 2014 at 11:59 am

    As a night time cab driver of almost 10 yrs in Bend Oregon ..I look for the stories involving Uber Lyft etc…and they are nothing but a pain to any cab company no matter what state or city. Now the other side of the story is background checks are they really doing them or are you just taking a chance every time you open that app>? Why would anyone take that chance and as a female driver I myself would never trust anyone but a well known cab company!! ~Karla w/a K! :*)

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      Indy September 16, 2014 at 2:26 pm

      Your post reads like a very scared person. Seriously, “are they really doing background checks?” Yes, Carla, yes, they are.

      Of course they are a pain, they usurp your fat margins of monopoly. You’ve been riding high with those margins for 60+ years now. It’s time to pass the torch.

      “Why would anyone take that chance and as a female driver I myself would never trust anyone but a well known cab company!!”

      uh, these “cab companies” have limited liability, and aren’t responsible for say rapes that a driver does against a passenger or vice versa. You should know this, of all people. Uber/airBNB/Lyft etc has reputation-based models that are far more trusted than podunk cab company that has independent contracts with drivers.

      Indy with an I

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      • Anne Hawley
        Anne Hawley September 16, 2014 at 5:48 pm

        It’s great to correct misperceptions – even fear-based ones – but less great to take such a mean tone towards the person expressing them. Generally speaking, BikePortland commenters hold to a bit higher standard of discourse.

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        Marid September 17, 2014 at 11:06 am

        Purposefully using “Carla” instead of “Karla” is a cheap shot. Having experienced cab drivers offer comments should be considered valuable.

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      Adam H. September 16, 2014 at 3:34 pm

      FUD

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    Peter W September 16, 2014 at 11:54 pm

    Also, if Portland is going to drastically improve the ability for people to get around without parking, and to carpool (via Lyft Line and Uber Pool), I would hope that the city takes the opportunity to repurpose space currently dedicated to on street parking (Parklets, anyone?), to convert some standard lanes to carpool lanes, and to consider things like congestion pricing.

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    keith September 17, 2014 at 9:16 am

    Here in San Francisco ride share companies are a nightmare. This is essentially a white flight scenario away from our transportation infrastructure. It further excaserbates the two tiered society we currently live in. Rich folks take uber/lyft/sidecar, poor folks take increasingly unsafe public transportation. Meanwhile thousands of illegal cabs pour into our city every day. Their car payments (and car dependent lifestyles) are subsidized by selling “ride sharing”. I hope portlanders like cars entering bike lanes without signalling and parking there because it happens all day long here. Come ride a bike around San Francisco for a week. I challenge you not to get forced off the road or doored by someone staring at their ride share app. Meanwhile cab driving which has always been a way into middle class for people of color and new immigrants will be no more. I’d like to see someone write “uber driver” on a mortgage application and see how quickly they’re laughed out of the bank.

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    Rodeocab September 17, 2014 at 11:01 am

    Endy w/a Y as why you so angry… 3 million dollar bond with the compny I driver with 20 plus yrs experience! And here’s to your Uber and illegal cab podunk lyft companies.. Tuscaloosa police arrest Uber driver for possession of nearly quarter pound marijuana, drinking vodka while driving http://s.al.com/qdcwoYc via @aldotcom and Police: Suspect Who Posed As Livery Cab Driver Before Attacking Family In Queens Arrested « CBS New York http://cbsloc.al/1sp3ZBi do you need more…. Do a little research and there is story after story of these asshats driving for these so called companies!

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