SXSW 2013: Uber Innovation in the Face of Legislation
What’s the reward for getting up early for my first SXSW Salon? A free mimosa and a pair of bright orange sunglasses. Oh, and GEEKSTA PARADISE: The Ballers of Uber, Airbnb + Github. First up, Dave McClure (of 500 Startups) sat on the stage with Uber CEO Travis Kalanick and the overarching theme of their chat was innovating in the face of strict legislation.
Many startups are born of the desire to solve a problem and Uber is no different – the company coins itself as the future of transportation. They’re currently active in 28 cities and although they’re a darling of the tech startup scene they’re not so popular with local governments and cabbies, having been accused of illegal taxicab operation.
Kalanick cites the city’s resistance to embracing Uber as protecting an incumbent industry through anti-competitive measures. To launch Uber in Austin, the drivers have to charge 20 times the taxi rate. In Denver, the cars wouldn’t be allowed to operate downtown or charge by distance and Uber would have to own all the cars that provide the transportation – an unsustainable model.
Kalanick was asked about Side Car which is regularly heralded as one of Uber’s low cost competitors and the message was the same: Side Car is Uber, but with unlicensed drivers. It keeps the cost down, but there’s certainly more controversy and the long-term sustainability is questionable. While he stated that there has to be a low cost Uber, it is at the mercy of the law.
The philosophy of open source is the opposite innovation-crippling red tape and we’re hearing more and more about entrepreneurs having to engage a two pronged approach of being creative within legislative parameters, and lobbying to extend or even remove those parameters. Member numbers give weight to this lobbying, as does strategic PR that places your issue firmly on the public agenda.
It’s nice to see the content extend outside downtown Austin with a livestream feed. You can catch the replay at The Lean Startup SXSW site or sift through the Salon’s Twitter hashtag for key takeaways.