(photo credit: REUTERS)
What do you do if you’re an international company trying to get around local regulation so your product can thrive in a new market? If you’re Uber, you find loopholes in the law, then try to change it.
This weekend, from Thursday through Saturday, Uber will be offering its Uber X service in Tel Aviv for free. Unlike the normal services offered by Uber or its Israel-based competitor GetTaxi, through which users can order and pay for regular taxi cabs on their smart phones, Uber X offers rides by regular drivers in their regular cars.
The problem is that it is currently illegal for people without taxi driver licenses to accept money for giving rides.
“The way the current regulation is structured is that you can’t transport people for payment,” Uber Israel CEO Yoni Greifman told The Jerusalem Post. “So we’re offering it for free.”
The two-day Uber X deal is a way to publicize the possibilities of ride-sharing, which Greifman says can cost up to 40% less than regular cabs, while offering people who want to pick up a little extra work a chance to make more money. The company – which is also offering subsidized cab rides through the end of the year to attract users – says it is not compensating the volunteer drivers in any way.
But Uber has friends in high places. On Monday, MKs Boaz Toporovsky (Yesh Atid) and Moshe Feiglin (Likud) submitted a Knesset bill that would make ride-sharing services such as Uber X legal.
The “Uber bill” would allow anyone, instead of just licensed taxi drivers, to provide rides for pay, and is part of a greater effort to lower the cost of living, Toporovsky explained.
Feiglin viewed the proposal as increasing competition in the transportation market, which will lead to lower prices.
According to the Toporovsky, ride-sharing will lower public transportation costs, air pollution, traffic accidents and drunk driving.
“Lowering transportation prices in Israel will bring a real change for every citizen at a time when the cost of living is one of the most important [issues],” Toporovsky said.
“This will allow more people to make money [giving rides] whether as a primary job or a secondary one, including college students.”
He also pointed out that ride-sharing will be available on nights and weekends, when public transportation is less accessible.
“This is a revolutionary idea that combines helping others, community values, efficiency and economic liberty,” Feiglin stated.
Uber has been courting MKs and regulators to open up the market, and notes that changing regulation would also open the way for other companies, including Get- Taxi, Lyft, FanZone and Pick- App to enter the market.
Though many cities have allowed Uber and other ride-sharing companies freedom to operate – a move generally adored by consumers and reviled by taxi cab unions – Israel poses unique challenges for ride-sharing because of the security situation.
In recent months, terrorists have used cars to mow down innocent civilians, and Israelis are regularly warned against hitchhiking for fear of kidnapping or worse.
Greifman says that Uber has a stringent background check process in place that mimics and in some ways supersedes the state’s own requirements for drivers. Both the age requirement and experience requirement are higher than taxi cab licenses, and a clean police record is necessary.
Asked if the background check opened up problems of racial profiling, Greifman replied, “Currently in our system we don’t have any discrimination issues, and we have Arab Israelis, [Jewish] Israelis, and drivers that have been through the entire process from transportation office.”
“It’s all a comparison issue.
If you’re comparing us to riding in your own vehicle, I can see the concern; but compared to hailing a taxi on the street, we’re definitely above the minimum,” he added.