Why Uber would rather be suspended in New York than hand over data to the TLC
Another month, another regulatory battle for the company everyone loves to hate and hates to love: Uber.
In December, the car-ordering platform was banned in Portland because it failed to comply with city laws designed to protect immigrant cab drivers. Now it's been partially suspended in New York after refusing to provide data requested by the city's Taxi and Limousine Commission. And what's been Uber's response to both scenarios? To quote Kanye, the Uber of rappers if there ever was one, "I'm sorry, was you sayin' something? Nuh-uh you can't tell me nothing."
Uber eventually went back on its promise to keep operating in Portland unlawfully, but nevertheless the company is famous for skirting regulations it deems unwarranted, even when the cost to its business is negligible. By the company's own estimation, complying with Portland's taxi laws would have only cost Uber $100,000 -- which is basically nothing when you consider Uber is reportedly on track to generate $10 billion in annual revenue in 2015 and has raised $3.3 billion, and counting.
But the refusal to hand over data to the TLC is about more than CEO Travis Kalanick's well-publicized love of Ayn Randian libertarianism. It's about the other great love in Kalanick's life: protecting trade secrets, even if it's done at the expense of the users and municipalities it serves.
The city of New York has good reason to ask for demographic and location data on Uber's users -- and not because it wants to spy on them. As the Washington Post's Emily Badger wrote when DC legalized UberX without demanding this data:
Anonymized versions of this data — designed to protect the privacy of individual drivers and riders — would help cities verify that Uber drivers aren't discriminating against certain neighborhoods or disabled passengers, that Uber is actually weeding out drivers who do, that the company is truly serving the public in exchange for the public's confidence in it.Moreover, transportation planners would have a field day with the data, which would reveal in real-time how people move around the city. And finally, the payment information would reveal precisely how much Uber drivers make, providing a good picture of the economic trade-off of giving so much of the city's transportation market to just one company.
But as we saw when Uber sued the state of Ohio to prevent its insurance policies from being shared with the public, Uber would rather protect this data, which it views as proprietary and thus a "trade secret," than to offer valuable insights to the public it serves. This is with good reason: Presumably, the TLC, looking for any advantage it can find, would look to use that data itself to become smarter about how its cab and livery services distribute drivers at various times and locations in the city.
And finally, Uber won't turn over the data because the consequences for its refusal are, quite frankly, irrelevant to the company. Car services traditionally operate through multiple "dispatch bases." If I want a car in Bushwick, my request goes through a base affiliated with that area. As punishment, the TLC has asked Uber to suspend operations in five of its six New York dispatch bases – although it's permitted to consolidate operations through its single remaining dispatch. But it's not as if Uber has individuals stationed around the city filling car requests over the phone. It's a software platform. If anything, Uber might be thrilled to cut down on the duplication of having multiple dispatch bases.
The biggest takeaway from Uber's latest spat with regulators is that, even if cities request pickup data as a stipulation of Uber operating there -- as Badger chastised DC for not doing -- that's no guarantee they will ever see that data. Once Uber knows it has a foothold in a market, it will continue to do everything in its power to avoid regulations it doesn't like, even if it means operating what's essentially a criminal organization as it did briefly in Portland.
[illustration by Hallie Bateman]