Uber's latest missteps could affect other ride-hailing services

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Ride Hailing Apps

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In the latest of a series of scandals to hit Uber recently, reports emerged Friday that the ride-hailing service conducted a wide-ranging operation to evade police and regulators investigating the company, according to The New York Times.

The operation involved the use of a program, dubbed Greyball, that denied rides to police or regulators conducting investigations or sting operations. 

Uber has clashed with local authorities in several cities around the world including Paris, Austin, and Philadelphia. That’s because it often expands into new markets by leveraging loopholes in regulations regarding paying for rides from noncommercial drivers. In some cases, authorities have responded by investigating Uber’s practices and launching sting operations to catch the service’s nonprofessional drivers.

The company countered these investigations by using the Greyball code, which prevented law enforcement or regulatory agents from ordering rides with the service. For example, when inspectors in Portland tried to order rides through Uber’s app as part of a sting operation in 2014, their rides were immediately canceled. The app also sometimes showed authorities cars and drivers that didn’t exist to throw off their efforts.

The news comes on the heels of several other scandals that have rocked Uber — an online video recently surfaced of Uber CEO Travis Kalanick berating an Uber driver, and an Uber engineer sparked an internal investigation at the company after writing a blog post detailing sexual harassment she experienced while working there. In addition, the company received public backlash against its reaction to protests over President Donald Trump’s travel ban, leading to the widely publicized #deleteUber social media campaign. This latest revelation will likely further damage Uber — reports emerged Monday that employees at Uber headquarters are fleeing the company because of its damaged reputation.

The scandal could also draw more regulatory scrutiny in various jurisdictions that might impact the wider ride-hailing industry. Regulators have largely been playing catch up with this emerging industry, showing hesitancy in many cases to put strict restraints on ride-hailing services because of their increasing popularity. For example, New York City pulled back a regulatory proposal in 2015 that would have capped the number of Uber drivers allowed to operate in the city. The Greyball scandal could provide a catalyst for local authorities to take a more stringent stance toward ride-hailing services, like via regular compliance audits of firms' data and operations to ensure they are in line with regulations.

Since the start of 2016, automakers, tech companies, and ride-hailing services have been racing to create a driverless taxi service. This service would mirror how an Uber works today, but there wouldn’t be a driver.

So far, the race has been brutal, as companies jockey for position by spending billions to acquire/invest in companies that will help make a driverless taxi service a reality. Uber recently took the pole position by announcing it would begin piloting its self-driving taxi service (with a driver still behind the wheel) in Pittsburgh later this month. But other companies, including almost every automaker, are quickly catching up as we reach the mid-way point in the driverless taxi race.

For the past two years, BI Intelligence, Business Insider’s premium research service, has been tracking the progress of the self-driving car space. As our reports have shown, the evolution is happening much faster than many expected, but there are still many barriers that have to be overcome before driverless cars become a reality.

BI Intelligence has compiled a detailed report on driverless taxis that analyzes the rapidly evolving driverless taxi model and examines the moves companies have made so far in creating a service. In particular, it distills the service into three main players: the automakers who produce the cars, the components suppliers who outfit them to become driverless, and the shared mobility services that provide the platform for consumers to order them.

Here are some of the key takeaways from the report:

  • Fully autonomous taxis are already here, but to reach the point where companies can remove the driver will take a few years. Both Delphi and nuTonomy have been piloting fully autonomous taxi services in Singapore.
  • Driverless taxi services would significantly benefit the companies creating them, but could have a massive ripple effect on the overall economy. They could cause lower traffic levels, less pollution, and safer roads. They could also put millions of people who rely on the taxi, as well as the automotive market, out of a job.
  • We expect the first mass deployment of driverless taxis to happen by 2020. Some government officials have even more aggressive plans to deploy driverless taxis before that, but we believe they will be stymied by technology barriers, including mass infrastructure changes.
  • But it will take 20-plus years for a driverless taxi service to make a significant dent in the way people travel. We believe the services will be launched in select pockets of the world, but will not reach a global level in the same time-frame that most technology proliferates.

In full the report:

  • Analyzes the moves 18-plus companies have made in creating a driverless taxi service.
  • Discusses the corporate and societal benefits of a driverless taxi service
  • Examines the regulators conundrum when deciding if they should or should not allow driverless taxis to operate
  • Determines the potential cost of a driverless taxi vs. owning a car, riding in a ride-hailing service, or riding in a taxi
  • Explains the barriers including the technological and regulatory barriers these companies will face 

 To get your copy of this invaluable guide, choose one of these options:

  1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> START A MEMBERSHIP
  2. Purchase & download the full report from our research store. >> BUY THE REPORT

The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the future of driverless taxis.

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