Uber In The Sunshine Economy
A revolution in South Florida began in early June 2014. That revolution is due to end this week. It’s a change in how we hire and pay someone we don’t know to drive us someplace.
It was almost two years ago that Uber launched its service in Miami-Dade County. Uber began three weeks after competitor Lyft started it’s own app-based transportation service, but quickly came to dominate the market throughout South Florida for both riders tapping on its app and drivers signing up to drive passengers in their own cars.
This week, Miami-Dade County is due to join Broward and Palm Beach counties in having rules for these transportation network companies to legally operate. Miami-Dade’s regulations largely fall in line with what the industry has successfully pushed for in other places. Dade County commissioners OK'd the rules last week.
Even without the rules, the businesses have grown. Uber says it has 10,000 drivers in Miami-Dade County alone and thousands more in Broward and Palm Beach counties. The company conducted email, radio and television advertising campaigns, urging its drivers and riders to push politicians into writing industry-friendly regulations against the wishes of the taxi industry, which they largely have done.
Uber’s presence touched off a debate over how South Florida greets companies that disrupt well-established industry, and over transportation.
Kasra Moshkani has been at the center of much of this for Uber. He grew up in Miami and is Uber’s general manager for South Florida.
Regulations in South Florida
Will Uber operate under the rules OK'd in Miami-Dade County?
Moshkani: Yes, absolutely. We're very excited to do that.
Did Uber write the legislation?
Moshkani: The legislation is really the culmination of input from a lot of different stakeholders. What we worked on was the education piece -- informing some of the issues that are important to allowing the riders to have access to the transportation while also allowing the drivers to take advantage of that economic opportunity.
In Broward County, tighter regulations were passed last summer and Uber stopped operating in Broward County for a time until easier regulations were passed. What will be in place by the end of this week in Miami-Dade County? Are those regulations that Uber can operate under?
Are you satisfied with the rules in Palm Beach County?
You're comfortable that an Uber driver in Palm Beach County who picks up a rider in Palm Beach can operate legally in Broward and in Dade County as well?
Moshkani: Yeah. Because it's such a transient part of the state we find that when a driver gets requests they pick someone up; sometimes they take them to Broward or Palm Beach or to one of the other counties. For that driver to not have to drive back empty or end their day there, it just makes the operation a lot smoother. Having that continuity is important.
By your calculation how much does Uber owe in county fines in Dade County and Broward County?
Moshkani: There were a number of drivers on the platform who have gotten fines. It's our position that in Dade County the law that was imposed and enforced on those drivers doesn't necessarily apply to those drivers in this industry.
So you think those fines were levied wrongly?
Moshkani: That is our position – that that specific law that was enforced doesn't apply. That is our position.
Same for Broward County?
Moshkani: That's our position with regard to where most of the conversation around the fines [issue] has centered. We're going to continue the conversations with the county around that. Our goal is to be good players. And so we're going to continue that conversation and hopefully come to a resolution with the county on that.
You're comfortable continuing to operate without it being resolved under the legislation that was approved last week?
Moshkani: The county's going to take some time and come to the table. We're going to have conversations around it. Over that time period it will be resolved.
Under the legislation that is operating in Palm Beach and Broward counties and soon in Miami-Dade County, transportation network companies like Uber and your competitors are not required to do a government Level 2 background check. What kind of security assurances can you provide the traveling public without that kind of regulation?
Moshkani: Your question is really around fingerprinting. To clarify, over the last couple of decades in Miami-Dade County, taxi drivers haven't actually been fingerprinted. Safety is important and background checks are an important part of that. In terms of background screenings, we do a number of things so every driver who goes through the process of wanting be a driver on the platform has to go through, including submitting certain documentation, consent to a background check and that background check includes screenings at the county level, at the state level and at the federal level. One of the important parts of safety is that initial screening, and that's how the industry has always worked. You have individuals who go through a process to get the screening. In a lot of ways historically safety has sort of ended there. But what's really important here is that you have technology and you have a lot of transparency. As a rider when you request a ride you get a lot of information on the driver. You have a picture of their face, their car and their license plate. You see them on the map. You can contact them through an anonymous bridge so you can be in touch with them. That trip is GPS-tracked from the moment you get into the car to the moment you're dropped off. Then you're sent a receipt. And at the end of the trip, you get out of that vehicle. The driver hits “end trip” and you're then presented with a screen. It’s information on the driver. It has five stars giving you the opportunity to rate that trip. How good was it on a one-to-one, a five-star scale? And you also have the opportunity to submit open-ended comments. People submit comments on the vehicle quality, on how their experience was -- of any part of the experience they want to. And then on our end, we have a team that is constantly reviewing that feedback.
Are you convinced that the insurance industry is responding to the disruption that Uber and others are putting on it?
Moshkani: For the first time you have individuals who are using their vehicles in a way that's a little bit different than what it has been historically. What we currently have in place and what has been codified in a lot of the jurisdictions that have started to regulate ride-sharing is a $1 million policy. From the moment that a driver starts to drive towards the passenger to the moment that the passenger gets out of that vehicle there is a primary $1 million insurance policy that's in place. Here in Florida that's actually more than three times what the state requires.
Can Uber co-exist with the taxi industry?
Moshkani: I think to get to get a look into the future of what transportation will look like in South Florida and in Miami we can look at some of the cities where we have operated for a longer period of time. What we see is that there is coexistence. You go to San Francisco, for example, the city that we first launched, and you see taxis driving. You go down the street, put up your hand and a taxi will stop. There will be times where it will make more sense for certain people to use taxis. It's about options.
The taxi industry claims new rules like those approved in Miami-Dade and those that are in operation in Broward and Palm Beach counties don't allow for equal treatment under the law. For instance, the regulated fares at the taxi industry has to operate under vs. unregulated fares that Uber can operate under, including surge fares. Do the rules create two systems?
I think the regulation recognizes is that this is a new way of operating in the industry. This is a new part of the industry that has been created and there are some key differences that the regulation specifically recognizes and creates regulation around. Our viewpoint is the riders want the options. Those options will have certain pros and cons. Those pros and cons will change over time. So we don't have a particular viewpoint with regard to how fares, for example, are regulated for another player in the industry. But what we do support is having those options available and regulating them each in a way that makes sense.
What is the Uber policy on tipping drivers?
The philosophy is that a tip is not included in the fare. But it's also it's not expected. - Uber South Florida GM Kasra Moshkani
Moshkani: The philosophy is that a tip is not included in the fare. But it's also it's not expected. And it's not required so there's no need to tip.
Can a rider tip if he or she wants to?
Under the Uber technology how does he or she do it?
Moshkani: Again, the tip is not part of the experience, but if a rider feels compelled to do so, and they can feel compelled for various reasons including a great experience, the rider's welcome [to tip the driver]. It would be the rider having cash and giving cash to the driver.
Federal lawsuits, including one Florida, have been filed arguing that Uber violates the Fair Labor Standards Act by not paying overtime and not paying minimum wage. Does it?
Moshkani: I'm not familiar with that specific lawsuit. What I will say is: Look at the driver partners who partner with Uber. These are people like you and me. They are part of our community. The thing that we hear over and over is that it's really about the flexibility. If you look at the profiles of drivers on the platform we see folks who might be between jobs. It might be someone who is looking to earn some extra money on the weekends. It might be a single mother who just dropped her kids off at school and has a couple of hours free before she goes and picks her kids up again. That ability to work when, where and however long you want is just something that is so critical to this opportunity being so attractive to the driver partners.
What is the median wage of a driver in South Florida?
Moshkani: It varies. We offer a number of different products in South Florida. You look across the board at various types of drivers and you can see anything from say $20 to $35 an hour if that's how you want to cut the data.
Is that an appropriate way to cut the data?
Moshkani: It can be.
Is it a way that you cut the data?
Moshkani: We cut it a lot of different ways because people look at it differently. Some people think about it in a particular week: 'I want to earn this much money because my goal is to pay for this specific thing.' Others think about it on an hourly basis. Others think about it in different ways.
How important is South Florida to Uber?
Moshkani: It's a very important market. One of the advantages that we have as a technology company is that the people who have the app move around. When they move around they open up that app wherever they are. They try to request Uber. So what we saw here in South Florida about two years ago was that people were coming to Miami; they were opening that app in Miami. They were getting a message that said basically we do not exist here. That was an indication of the number of people who were doing that. It was increasing. Miami was one of the last major cities in the U.S. to launch. Based on what we saw with that incumbent demand we decided to pull the trigger. Adoption has been phenomenal.
The company's valuation is approaching $70 billion with its worldwide operations. What's the South Florida market worth to Uber?
Moshkani: That's a difficult question to answer.
What does revenue look like in South Florida for Uber?
Moshkani: It's the same answer.
Moshkani: It's one of the fastest growing markets for us especially here in Florida.