Uber 21st Century Technology Confronts 20th Century Regulation

Uber 21st Century Technology Confronts 20th Century Regulation

By
Steven Callander, David Hoyt
2012|Case No.P81| Length 10 pgs.

Uber, which began operations in 2010, provided a service that allowed customers to call for a limousine using their mobile device. A car would arrive within minutes, and the fee for the trip (including gratuity) would be charged to the customer’s credit card. The service was more expensive than a taxi, but cheaper and more responsive than a conventional limousine service. Uber did not own limousines, but contracted with existing, licensed, limousine owners and drivers. By mid-2012, it had service in 16 cities, mostly in the United States.

Taxi and limousine operation are heavily regulated at the city and/or state level. Uber’s business model did not fit into the conventional regulatory framework for either taxis or limousines, and the company faced intense opposition by taxi drivers and regulators in some cities. The case focuses on Uber’s regulatory challenges in Washington, D.C. In July 2012, the Washington D.C. City Council was preparing to vote on a measure that would legitimize Uber’s existing operations, but prevent it from offering a planned lower-priced service. The case explores how the company dealt with regulators as part of its corporate strategy.

Learning Objective
To illustrate and discuss the impact of existing laws and regulations on innovating companies, and how to strategize about them.
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