There's no doubt that Uber, the company that developed a ride-for-hire app, is known for disruption. The service, now available in over 66 countries and 507 cities across the globe, continues to shake up a number of industries, including the taxi and auto-insurance businesses.

On Friday, the company (which investors have estimated is worth over $60 billion) was in the news again, after a clash with California regulators. The disagreement is tied to Uber's new test of self-driving vehicles in San Francisco, which regulators say is illegal because Uber hasn't obtained the necessary permits.

The dispute is rooted in Uber's refusal to seek a permit from the California Department of Motor Vehicles, which would allow it to test autonomous vehicles under certain conditions. Companies like Google, Tesla Motors, and Mercedes-Benz have all gotten such permits.

Uber officials contend that under the letter of California law, the company does not need a permit because the motor vehicles department defines autonomous vehicles as those that drive "without the active physical control or monitoring of a natural person." Uber said its modified, self-driving Volvo XC90s require human oversight, and therefore do not fit California's definition of an autonomous vehicle.

In an official statement provided via Uber's website, Anthony Levandowski, vice president of Uber's advanced technologies group, argues that the California DMV is inconsistent in its application of the law.

"This type of technology is commonplace on thousands of cars driving in the Bay Area today, without any DMV permit at all," said Levandowski. "It's hard to understand why the DMV would seek to require self-driving Ubers to get permits when it accepts that Tesla's autopilot technology does not need them. We asked for clarification as to specifically what is different about our tech from the DMV, but have not received it."

Of course, this isn't the first time Uber's decided to flout laws that it felt didn't apply.

For example, after a court barred the ride-sharing company from operating in Germany, it continued anyway. (Uber has since backed off after further legal setbacks in Europe.)

One could argue that Uber is actually picking these kinds of fights.

Why in the world would it do that?

Because the company is confident that current regulations aren't only outdated, they're harmful.

Take Uber CEO Travis Kalanick's TED talk from earlier this year, for example. In it, he tells the story of the Uber before Uber -- the "jitney."

What's a Jitney?

According to Kalanick, it was way back in 1914 that a Los Angeles car salesman named L.P. Draper noticed long lines of people waiting for trolleys. To solve this problem, he put a sign on his car advertising to take people wherever they wanted to go for a jitney (slang for a nickel).

The jitney business grew by leaps and bounds. In just a year, there were 150,000 rides per day in Los Angeles alone. But trolley owners, the existing monopoly of the time, didn't like this one bit. According to Kalanick, they got regulations put in place to slow down the jitney's growth. (These included the need to obtain an expensive license in order to drive a jitney, and a requirement for drivers to be in their cars 16 hours a day.)

By 1919, says Kalanick, the jitney "was regulated completely out of existence."

Kalanick claims that today's monopolies and regulators are attempting to do the same thing.

"If by 1915 this thing was taking off," he says, "imagine without the regulations that happened, if that thing could just keep going. How would our cities be different today? Would we have parks in the place of parking lots? Well, we lost that chance. But technology has given us another opportunity."

Uber claims it's already taken millions of miles off the roads, removed thousands of metric tons of CO², from the air, and reduced the need for millions to own a car.

If the company can continue, it just may build a wave of momentum that can't be stopped.

Which leaves us with a couple of questions:

  • Will the Uber tsunami leave a series of changed laws and regulations in its wake?
  • Or, if not, will the company continue to do what it wants anyway?

Of course, time will tell.

But I have a feeling that this version of the jitney isn't going away anytime soon.

Published on: Dec 19, 2016