Unstoppable Randite versus Unmovable Bureaucracy: fight!

The Uber model runs into the DMV

There's been a lot of press about Uber's latest problem -- the California Department of Motor Vehicles has announced that ride-sharing drivers, who are in fact using their vehicles for a commercial purpose, need to get commercial plates.

That's not the end of the world -- but it's a big blow to the Uber model, which calls for people to buy cars, with Uber-backed financing, and turn them into taxis without following the rules that apply to taxis. Getting commercial plates takes a little longer (if there are 11,000 Uber drivers in San Francisco, and all of them have to get appointments at the DMV, the backup could take a while.)

But Uber is saying it doesn't care: The company protests the ruling, and will keep right on encouraging people to register their cars as personal, noncommercial vehicles -- the same way the company has offered to pay the fines in some cities for Uber drivers who illegally pick up and discharge passengers at airports.

The same way Airbnb encouraged people to violate city zoning and tax laws and rent out their homes as hotel rooms.

Here's the motto: It's better to ask forgiveness than permission -- particularly if you have a billion dollars or more in the bank and some very powerful people on your side.

Previously, previously, previously, previously.

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2 Responses:

  1. What's missing from the discussion of the "it's better to ask forgiveness" strategy is the fact that Uber and AirBnB are insulating themselves legally from the legal violations by having their operators break the law. The police and the building department just don't have the manpower to cite everyone. Prosecuting the companies for some kind of conspiracy would be a hard case even without the typhoon of campaign contributions.

    This diffusion of liability is a feature of their business model, not a tactic of last resort.

  2. What's missing from the discussion of the "it's better to ask forgiveness" strategy is the fact that Uber and AirBnB are insulating themselves legally from the legal violations by having their operators break the law. The police and the building department just don't have the manpower to cite everyone. Prosecuting the companies for some kind of conspiracy would be a hard case even without the typhoon of campaign contributions.

    This diffusion of liability is a feature of their business model, not a tactic of last resort.

  • Previously