Michael Allegretti FRSA is Director of Public Policy at Uber Technologies in New York City. In 2010, he ran for the Republican seat in New York 13th congressional district with the backing of his party, and he has previously served as a Senior Advisor on environmental policy at the Climate Group. In light of the RSA’s investigation into the sharing economy, we talked to him about his role at Uber and some of the challenges thrown up by businesses using disruptive technology and sharing economy models.
What inspired you to get involved with politics?
Well, it was a relatively humble beginning. At 16 I was selected to join the US House of Representatives Page Program, which is actually no longer available, but basically I provided administrative support, delivered mail, that sort of thing. The interesting thing was that it was an important time in US legislative history – Democrats and Republicans came together to pass comprehensive welfare reform and I also witnessed the balancing of the budget. I saw how government could work collaboratively and achieve real change in spite of ideological differences.
Uber has been one of the biggest success stories of the sharing economy, but it has also attracted its fair share of criticism. What appealed to you about working at Uber?
I was eager to work in the emerging tech space for a company that was clearly reshaping public policy in real time. More specifically, I care about cities, so it brought together everything: dynamic policy making in real time, and cities.
Sharing economy models empower consumers by offering them a broader range of options, but often they have little to no agency over the data they generate through and for online platforms. Do you think this is an issue?
The basis of a sharing economy company is that people can opt in – it’s made clear that you’re opting in so that you can be provided with a suite of options that better suit your needs. You share information about yourself which is what allows the options to be more tailored. Traditional companies have competitive advantages too, but ultimately consumer preference in the market will dictate where everybody goes. If it becomes the case that people do not want to share information about themselves, companies that rely solely on this will not succeed. Broadly speaking, in order to remain competitive as market leaders, companies such as Uber have to take great pains to safeguard people’s data.
Most industries have some kind of standardisation system that ensures benchmarks for quality, but sharing economy models rely on ratings and review systems to guarantee quality. Do you think this allows too much subjectivity?
It’s important to distinguish between regulation and ratings. Companies remain legally bound to meet certain safety requirements but quality is subjective and it is based on consumer feedback. That’s been the paradigm shift with the sharing economy, because now it’s the consumer who’s in the driver seat determining quality. The traditional taxi model, for example, is regulation heavy but not so great at obtaining customer feedback. So by using ratings you’re adding layers to the model and ultimately improving the quality.
Companies such as Uber that use two-way rating systems could result in a situation where a customer submits a good review just to ensure they don’t receive a bad one back. Do you think this model is flawed?
This isn’t an issue at Uber as ratings are not traced back to individuals. Ultimately, I believe that the rating system reinforces good behaviour, which leads to an overall improvement in the behaviour of drivers and passengers, and that’s a significant step forward.
In London, the Mayor Boris Johnson wants to cap the number of private hire cars on the road because of worsening congestion and air pollution. How do you reconcile demand for Uber’s services with environmental concerns?
At its core, the sharing economy is about maximising the use of existing resources. A shared ride is better than a private ride, and a shared ride with multiple riders is even better. That’s why we have created services like UberPool, a product that allows two riders or more to share a ride together. For Uber, I think there is a great opportunity for government and businesses to work together to provide the first or last mile to and from public transport. In New York City, we know that a large proportion of our trips are outside of the central business district (over 33%), in the outer boroughs, so people are actually using the service to reach established public transport systems and to increasingly move beyond the urban core in historically underserved areas.
Have you found that cultural differences impact how well Uber is able to work? For example, in London it takes 3 weeks to become a taxi driver, in Paris it’s about 9 months.
Uber operates in over 350 cities and yes, there are different policy challenges in every city concerning the regulations around ride sharing. However, the similarities greatly outweigh the differences. The notion of peer to peer and working with complete flexibility is common in cities because people want that kind of freedom everywhere. And the function of the app is pretty much the same everywhere too.
Uber says that it is a neutral intermediary helping supply to meet demand, but how far is it possible to be neutral when you are a for profit company?
Uber’s valuable proposition is being the safest, most reliable ride on the road: a ride when you need one at the push of a button. We have a relentless focus on safety and reliability and strive for three minutes wait time in NYC. Often, it’s the cheapest ride too, though not always. Safety and reliability are our main concerns, our core values.
Many sharing economy initiatives were born out a community based approach to business. Is there a risk that the community approach will transition into a faceless commercial one once a company scales up?
I don’t think so, at least not for Uber. Every single driver partner is an ambassador for the brand. So really it’s a company full of faces culminating in hundreds of thousands of daily interactions. Ultimately, Uber is something you experience, rather than a company.
What do you think has made Uber so successful?
There’s a number of reasons. Its elegance and simplicity in the user experience. Reliability, which has been achieved in numerous cities relatively quickly. The rating system too, because it reinforces positive behaviour, and the safety features we have. With Uber, you know you’re in the safest ride on the road.