19 November 2015

When Your Business Model Is to Use Law Breaking to Enter Markets, This Is Inevitable

In Pennsylvania, a $50 million dollar fine against Uber in response to their deliberately and knowingly breaking the law:
Judges for the Pennsylvania agency that regulates buses and taxis recommended on Tuesday a record $50 million fine against ride-sharing company Uber for operating in the state without approval.

Two administrative law judges issued the decision, subject to approval by the Public Utility Commission, to punish Uber Technologies Inc. for rides by its subsidiaries from February 2014 until it received experimental authority six months later.

The judges rejected Uber’s argument that it did not run afoul of commission rules because it’s a software company whose services aren’t necessarily available to the public at large.

“Uber took a more active role in providing transportation service than simply providing the Uber app for people with cars to use to provide rides for people who need transportation — it was not a disinterested invisible entity in the background,” wrote judges Mary Long and Jeffrey Watson.

Uber spokesman Taylor Bennett said the San Francisco-based company was disappointed and hoped to come to a “reasonable resolution” after being unable to settle with the commission.

After a 30-day period to allow both sides to respond, the Public Utility Commission will consider the recommendation. If approved, it would be the largest fine ever imposed by the agency.
Uber's arguments in this hearing describe their business model in a nutshell:
  • Break the law.
  • Profit
  • When the hammer falls, blame their employees while claiming that their employees aren't their employees.
While there are a tech business models that make no sense, Uber's business model makes a lot of sense.

It's been used by con men and organized crime for years.


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