Last month, a judge of the California Public Utilities Commission issued a $7.3 million fine and gave Uber 30 days to hand over its ride sharing data before possibly being shut down.
Uber chose to appeal the order, but the outcome remains up in the air, potentially preventing students from being able to use the transportation network service in the future.
The California Public Utilities Commission requires documentation from Uber and similar companies to show that they are not discriminating against low-income passengers or passengers with disabilities and violating California state law.
The Daily Bruin’s Sylvia Lutze spoke to Juan Matute, associate director for research and administration at the UCLA Lewis Center who has researched transportation and transportation network series like Uber and Lyft, and asked him to predict how Uber will respond and how its possible shutdown could affect UCLA students.
Daily Bruin: How did you become involved with Uber research?
Juan Matute: I started following the transportation network companies in 2012. When they got bigger in San Francisco and launched in Los Angeles in 2013, I tried to get an understanding about how these markets might evolve in the future.
DB: Why do you think Uber will choose to comply with the fine and data sharing?
JM: California is a very large market for Uber. It’s where the headquarters are and where they launched. It’s also one of the first states to regulate how companies like Uber would operate. It would be a lot to jeopardize over a fine that is relatively small to how much money Uber has.
The state of California wants Uber to share more information because they think Uber doesn’t serve low-income areas or people with disabilities. Lyft and others have already submitted the data, but Uber sees it as (private) information.They think they don’t have to share it with the state, and they think the data is unreasonable.
The California Public Utilities Commission regulates a lot, so Uber is not the first. Two very large and powerful organizations have a disagreement. I don’t think there’s a chance Uber will actually be shut down in California. I guess Uber could decide they wanted to shut down temporarily to get people mad at the state, but not in the long term.
DB: What do you think Uber will do to solve the problem?
JM: I think Uber will look towards a political solution as well as a regulatory solution. The California Public Utilities Commission creates regulations but the state legislator can change the rules. I think they will continue to pursue a state legislative solution while coming to some sort of an agreement with the California Public Utilities Commission.
Uber currently has 30 days to give the fine and date, but the appeal will stop the clock and I think that’ll last many months that will give them time to come to a better solution.
DB: How will this affect UCLA students and L.A. residents?
JM: The big difference is that there’s Uber and then there’s Lyft and these other companies that aren’t getting into the same trouble. It means students might be more likely to use Lyft because they’ve heard about the state having issues with Uber.
DB: What other issues could affect student use of Uber?
JM: There are two classifications in the U.S. of how people can have a relationship with someone who pays them money, an employee and an independent contractor.
Uber would rather set the drivers as independent contractors. There was a recent court decision that ruled a single Uber driver had to be classified as an employee; however, this does not currently extend to any other drivers. If all drivers had to be employees, that would greatly affect drivers and the cost of the service, making it harder and less convenient for students.
Uber is pushing for a third category that would be an in between, and that would require a legislative solution for them.
Compiled by Sylvia Lutze, Bruin contributor.