uber_liability

Update: A month after the kerfuffle, sources confirm to Pando that Uber has stopped deactivating Breeze cars from the platform. Only three cars in total were deactivated before Uber presumably got bored with the policing effort and moved on to other priorities.

Pando has learned that Uber is laying the smackdown on newcomer Breeze, which provides rental vehicles to car-less people who want to become ridesharing drivers. Reached for comment today, Uber confirmed that it has been deactivating Breeze cars which it finds using its platform.

A driver who wants to remain anonymous said that he’s spoken with several fellow drivers who have been contacted by Uber and deactivated. “I’m weirded out about taking a ride [through the Uber app] after they told everyone this isn’t going to fly,” this driver said. “Your source of income could disappear overnight.” 

 Lane Kasselman, Uber’s head of communications for the Americas, told Pando, “We’re not deactivating the driver. Just the vehicles.”

It’s a devastating blow for the young, pre-venture company Breeze, which has only been in operation for a few months. Breeze posits itself as a “platform” and not a transportation company, just like Uber. It connects willing drivers to new rental cars provided by an unnamed third party company. Smartly, it was going after the biggest need that ridesharing companies face: Driver supply. By allowing people without cars to become ridesharing drivers, it looked like a win-win for all parties involved — except those potentially hit by such a car who have to deal with the convoluted insurance and liability chains.

Unfortunately for Breeze, Uber didn’t agree. Kasselman told Pando that the company was deactivating Breeze cars to ensure that Uber abides by the law.

We’re not allowing rental vehicles on the Uber platform because of regulatory ambiguity,” Kasselman says.

When Transportation Networking Companies — TNCs — were legalized by the CPUC in September, they were defined as:

…organization[s] that provides prearranged transportation services for compensation using an online-enabled application (app) or platform to connect passengers with drivers using their personal vehicles…

(emphasis mine).

But if drivers start using rental vehicles for such services, that blurs the lines and could potentially mean Uber doesn’t qualify as a TNC. “We are following the letter of the law,” Kasselman says. “We made it clear to the CPUC that there was ambiguity [in the TNC permit] and they need to work on clearing it up.”

Anyone who has followed Uber closely might laugh at this argument. Since when does Uber balk at fighting regulations? Uber’s former New York general manager reportedly said in 2011, “Their strategy has been ‘try and stop us, and if you try and stop us, then we’ll cross that bridge when we come to it.’”

But Kasselman says that’s not the case. “I think there’s confusion in looking at how Uber approaches regulations and jurisdictions. We support regulations that are reasonable and built around the reality of a new industry,” Kasselman says. “This should not be confused about us challenging regulations created 50 years ago.”

The Breeze driver Pando spoke with had other theories on why Uber might not want the drivers on the platform. He believes it has to do with their preferred financing program, where they help drivers get a loan to purchase a new car for the purposes of driving for Uber.

“They’re really trying to push these subprime auto loans for drivers, and they’re trying to edge us all up to get the numbers up for those loans,” the driver said. He claims that within a month of being on boarded to the Uber platform he was called by a company salesperson to talk about buying a car. He’s received several emails from Uber since then about the program which tout the fact that even drivers with poor or no credit qualify for the financing option.

Uber has told Breeze drivers who they threatened to deactivate that they should consider buying a car through Uber’s financing partner instead. “We’re trying to find a solution while the CPUC figures out what to do about the ambiguity,” Kasselman says. 

[Image by Brad Jonas for Pando]