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Uber: Car-For-Hire ControversyHave you heard about Uber? This innovative ride service is based in San Francisco. It was started in 2009 by two people. Now it is worth about $18 billion, and operates in over 200 cities. Uber has been astonishingly successful – but it has also made a few enemies along the way.App-based ridingThe service works like this. Customers download a smartphone app that finds the location – via GPS – of privately-owned cars for hire. Customers indicate where they want to be picked up and what kind of car they want. Then, Uber finds and sends the nearest available driver with the right vehicle to that location. Joining is free for drivers and passengers. The fare is determined by the length of the trip and the driver’s time. Credit cards are used instead of cash. Uber takes a 20 percent cut of the driver’s fare. A ‘Classy Ride’At first, Uber only used full-sized luxury cars.“We just wanted to push a button and get a ride,” says Travis Kalanick, Uber’s Chief Executive Officer. “And we wanted a classy ride.” But in 2012 Uber became more ambitious. Under the brand name UberX, it expanded to include sedans and SUVs. This meant Uber could compete for customers with taxi services.Undercutting The CompetitionUber is so popular because users like the convenience of using an app – and because it is able to charge, on average, 30 percent less than traditional taxis. Why? Because drivers don’t have to buy an expensive license to operate. The service also doesn’t have to follow other industry rules that can cost taxi companies money. Taxi drivers say that’s unfair. They warn that Uber could put many of Canada’s roughly 50,000 taxi drivers out of work. “There’s a lot of people that make a living at this [whose lives] are at stake and the company, Uber, is not really fair competition for us,” stated Ottawa cabbie Estas Absa Mwakyeledzi.Breaking The Rules?Others are opposed to Uber because they believe that the service is unsafe. Since Uber drivers don’t have to follow the same rules as other taxi drivers, there’s no guarantee that they have good driving skills. They may not have had criminal record checks, either. “I wouldn’t get into a plane... with an amateur pilot. So why would you take that risk and go into an unregulated vehicle?” asked taxicab spokeswoman Carolyn Bauer.Insurance companies also warn that Uber drivers aren’t covered if one of their passengers is injured.Safe And InsuredFor its part, Uber insists that its service is safe. The company says it requires its drivers to complete background checks, and has its own insurance to cover all Uber passengers.“Every ride on UberX in Canada is backed by $5 million of auto liability insurance,” said Lauren Altmin of Uber, “so... the community at large can rest assured knowing that ride-sharing partners are covered.” Moreover, the Uber app allows both drivers and riders to rate each other. Bad drivers won’t last long with the service, the company says. Uber In CanadaIn Canada, Uber operates in Montreal, Ottawa, and Toronto. It is also seeking drivers in Calgary and Edmonton. However, Ottawa and Toronto want to ban the controversial company. Officials in Calgary and Edmonton say they don’t want it in their cities either.Meanwhile, Uber tried to expand into Vancouver in 2012, but was blocked by provincial rules. So, the company responded by starting a petition through social media. In November 2014, Vancouver’s taxi industry filed a lawsuit against Uber hoping to prevent it from starting up there. City council voted to stop Uber for a further six months, but may change its taxi licensing rules. Change can’t come fast enough for Uber.“Many jurisdictions have recognized that their current, outdated regulatory framework doesn’t account for new technologies such as ours,” Uber said in a statement. “We look forward to working with policymakers to create smart regulations that would recognize Uber’s role in Vancouver’s transportation ecosystem.”Did You Know?Cab drivers in London, England must take a test called The Knowledge to get a licence. To pass, they have to memorize the names and locations of 25,000 streets and roads.Getting A LiftMost North American cities restrict the number of taxicabs in service. So taxi licences are hard to get, tightly regulated and expensive. They cost as much as $800,000 in Vancouver, for example. Cab companies buy licences, then charge a lot to lease their cars to drivers. For instance, taxi drivers pay up to $700 weekly for shifts in Toronto. Those who support regulations say the rules ensure that drivers receive standard training. They are also meant to prevent bad behaviour like over-charging.Critics of the regulations argue that more competition could lower prices and operating costs for all taxis. Demand could also increase as service improves.Chief Executive Officer (CEO): the top manager with the greatest responsibility and most decision-making power in a companyinnovative: featuring new methods; advanced and originaljurisdictions: countries or areas in which a particular legal system operatesliability insurance: protects an individual or business from lawsuits and being held legally responsible for something such as malpractice, injury or negligenceWeigh The Pros And Cons1. Summarize, in the space below, your understanding of how Uber works.2. Using the information in the article and your own thinking, what are some of the advantages and disadvantages of Uber? Give specific examples to back up each point. ProsCons3. After completing the organizer, answer the following: Are you more in favour of or more opposed to Uber in your city? Give reasons to support your response. Between The Lines An inference is a conclusion drawn from evidence. A plausible inference is supported by evidence in the article and is consistent with known facts outside of the article.What inferences can you draw from the fact that Uber, started in 2009, is now worth about $18 billion and operates in 200 cities? Just Talk About It1. How is Uber able to undercut traditional taxi services? Explain. 2. There are over 50,000 taxi drivers in Canada. More than half of them are immigrants, and many of those are doctors, engineers, or other university-educated citizens who are overqualified for the work. If Uber continues to grow, do you think it will have a positive or negative impact on taxi drivers? Discuss both the positives and negatives before deciding. On-LineVisit our student website at and click on the What in the World? tab to: 1. Watch the Uber driver training video that explains how the service works: (or search YouTube: “Uber Driver Training Video”).2. Tour Uber’s website: . Read an 11-page Canadian Citizenship and Immigration Report entitled, “Who Drives a Taxi in Canada?”: QuizUber: A New Car-For-Hire ServiceWrite the letter that corresponds to the best answer on the line beside each question:______ 1. How many taxi drivers are there in Canada?a) 7,000b) 20,000c) 50,000d) 85,000______ 2. In which city did Uber first start operations?a) Seattleb) San Franciscoc) Los Angelesd) London______ 3. Which of the following is NOT true regarding Uber car-for-hire?a) joining is free for drivers and passengersb) customers wanting a ride call a toll-free 1-800 numberc) credit cards are used instead of cashd) the driver pays 20 percent of the fare to Uber______ 4. True or False? Uber only operated full-size luxury cars when it first started.______ 5. True or False? In 2012 Uber expanded under the name UberX to include sedans and SUVs. ................
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