American industry was shocked this past week when Uber announced they were halting their ride-hailing business in China to sell it to their Chinese competitor Didi Chuxing. They had lost $2 billion in China, Bloomberg reported. And they never seem to back down from a fight. But here, they did.
There is a precedent for this, though. Last spring, Uber shut down their East Hampton operation and walked away, or, as they put it at the time, “we got thrown out.”
People were shocked at that too. Uber usually wins in court. Today you can’t get an Uber in East Hampton or Montauk.
The battle revolved around the fact that there is a local taxi business in East Hampton and the rules for having a taxi license—and Uber was put into that category—were that you own or work for a taxi business, have an East Hampton office, and go through a vetting process where your company has to be approved and all the drivers vetted. Total cost for an arrangement like that was about a thousand dollars a year.
Uber’s original reaction to this, after their drivers got a bushel load of tickets, was to tell the town they were not a taxi company, they were a “facilitator” company, the drivers worked independently and Uber said the bushel load of tickets were the drivers’ responsibility—then walked out of the meeting with the Town in East Hampton. They then said they were essentially “thrown out” of the town to whoever asked, and also sent emails around the country urging customers and employees and drivers to flood East Hampton Town offices with emails of protest. Fans of Uber flooded East Hampton Town’s telephone message mailboxes, but it was all to no avail. And so they were not part of the competition last summer or this.
Of course, the withdrawal from China is of an entirely different scale from the withdrawal from East Hampton. In East Hampton, it involved a relatively small number of drivers—most got summonses in 2014 (one Uber driver was issued a summons for appearing to police to be driving while intoxicated, another was reportedly asleep in his car), and in the end up to $400 in fines for each. In China, I think they’re pulling out about a million drivers.
Since Uber fled a year and a half ago, they’ve pulled back in several other communities. But East Hampton was first. We ought to put that fact on the signs that people see they are entering East Hampton Town.
EAST HAMPTON TOWN
THE TOWN THAT BEAT BACK UBER
Other giant companies are fighting it out for business in China, but in our town Uber blinked and then ran. Can’t blame them after what East Hampton Town Supervisor Larry Cantwell put them through. Once burned, twice shy is what we say.