NEW YORK (TheStreet) — Several developments over the past few weeks suggest the tide could turn against ride-hailing service Uber. This should make investors think twice about investing in a potential initial public offering from this company. It should also make people question whether difficulties for taxi medallion lenders — including regulators’ takeover last week of troubled Montauk Credit Union — could eventually subside.
For example, drivers for Uber’s higher-priced UberBLACK service protested last Friday outside Uber’s Dallas offices. They felt cheated because they had invested in expensive cars to drive for UberBLACK, only to have the company undercut them by introducing the lower-cost UberX service in the city.
Some drivers may be earning decent revenue thanks to Uber’s surge pricing, in which the company automatically raises prices when there’s a lot of traffic and cars are scarce. But an increasing number of apps have appeared on the market that help riders avoid those charges.
Meanwhile, the company faces regulatory headwinds from local governments. In Austin, Texas, local officials are looking at increased regulations on Uber out of concern for providing a level playing fields for all transportation companies.
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Elsewhere, Massachusetts lawmakers are considering regulating ride-hailing companies such as Uber and Lyft. A bill from Gov. Charlie Baker would add at least five new employees to the Department of Public Utilities. They would make sure that ride-hailing companies had done appropriate checks on their drivers and insured them. The companies would have to cover the cost of this regulation, according to a report in the Boston Globe.
And last week, Boston’s police commissioner said that Uber officials lied to him about when he asked them about inspections on their drivers’ vehicles, the Boston Globe also reported. An Uber representative said the commissioner’s statement was a misrepresentation of conversations between the company and the police department, the report said.
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