As someone closely following the recent battle between Uber and New York City, I was very happy to learn that Mayor De Blasio decided to back away from his war on Uber. Just a few weeks ago, Mayor De Blasio and his city council proposed legislation that would have halted Uber’s growth in one of their largest markets. The legislation – which was to be voted on tomorrow – would have limited the annual number of new Uber vehicles to a mere 1% during a study period of nine months. Originally the city council wanted the study period of traffic patterns and congestion to be 13 months, but according to my sources the Mayor was going to propose nine months in an attempt to pacify Uber and their onslaught against him and the City. All indications were that the ban would pass, and that the Taxi and Limousine Commission (TLC) would begin severely limiting the issuance of new for-hire vehicle licenses within 30 days. But in a surprising move late today, the Mayor announced that the city and Uber have come to an agreement to temporarily end the current battle. They city has agreed that – with Uber’s assistance – they will complete the study in four months, and that there will be no cap during that time.
This is a big win for Uber, but a much bigger win for startups that have been growing on the backs of ride sharing apps like Uber.
Startups like Buggy.
Sam Jurkovitz began driving for Uber in December 2012. Originally from Israel, Jurkovitz had been living in Brooklyn for most of his adult life. At the end of 2011, his business of helping people clean up their debt had failed. Jurkovitz and his partners spent most of 2012 tying up the loose ends that come with entrepreneurial failure. By summer, Jurkovitz was in real need of income. That’s when he learned about Uber. He applied to become a driver and was picking up passengers in a Lincoln Town Car by the end of the year.
Because he couldn’t afford to purchase the vehicle on his own, and since TLC rules require drivers to own their cars in order to qualify for TLC plates, Jurkovitz found a company that leased vehicles with TLC plates by the week. After driving for two months and seeing how archaic and difficult the rental company was – for example, Jurkovitz had to wait for two hours every Sunday to pay for the car in cash, the only form of payment the company accepted – he did what any good entrepreneur would do. He started his own company.
In summer 2013, Jurkovitz and his new partner Menachem Light launched Buggy, a car rental company that specializes in leasing TLC vehicles by the week. The concept was simple: make it easy for those looking to become Uber drivers to rent an Uber-approved car. Whether the driver needed to lease until they could afford to buy; or if they just wanted to try driving without investing in a vehicle, Buggy would be there to help. Buggys’ mission: do everything they can to make the process as easy as possible for their drivers. They even went as far as setting up a fund for drivers who couldn’t afford the minimal down payment needed to get into a car. Most of their renters are immigrants, and Sam and Menachem know that language barriers and unfamiliarity with tech can make the process daunting.
Buggy’s customer first attitude flows down to Buggy’s nine employees, who patiently deal with each of the renters pouring into their offices in Brooklyn.
At the same time Buggy began, Uber had just brought their taxi killer uberX to New York. On June 11, 2013 uberX launched in NY with the slogan “the low cost uber” and tag line “better faster cheaper, than a taxi.” Uber promised pricing 10% lower then a taxi and said, “It’s like a taxi — only quicker, cleaner and a little bit magical.”
The launch of uberX couldn’t have come at a better time for Buggy. Unlike all the other cities where uberX operated, in New York City, due to strict regulation, drivers needed TLC plates in order to pick up and drop off passengers. Knowing that people looking to become uberX drivers would begin flocking to the Uber offices, Sam and Menachem set up outside the Uber offices to find their customers; they posted flyers on Uber’s vehicle marketplace board, listing their number for any drivers looking to rent a fully approved TLC car. Their promise of hassle free rentals proved successful as they began growing their fleet with each new driver.
Today Buggy has a fleet of almost 400 vehicles. They’ve grown steadily with Uber and other ridesharing apps, providing jobs for many immigrants, and creating jobs locally in Brooklyn at their corporate offices. As a company only two years old and without institutional investors, Buggy has done a great job building a high growth startup. Unlike Uber, Buggy doesn’t do business out of New York State, so any ban on new TLC licenses would have stopped Buggy dead in their tracks, and stunted their growth completely. The ban would have meant Buggy would stop adding jobs in Brooklyn, depriving many immigrants of much needed income. But with the temporary end to the ban, Sam and Menachem can continue focusing on what they do best, purchasing new cars and getting them out on the road.
As an entrepreneur who built a business, I know first-hand how difficult it can be to launch and grow a startup marred by government regulations and labor laws. From dealing with local health departments as well as the USDA and Agriculture Departments, I understand that government only makes it harder to be an entrepreneur in this great country of ours. As Uber and other small businesses continue to get sued by contractors or dissed by politicians like Hillary Clinton, I just hope they understand the negative effect that can have on the economy and startups like Buggy. For now, Sam and Menachem are thankful that Uber has won this battle and Buggy can continue to grow but they are worried that it’s just one battle in a larger war on the on-demand economy.