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New York, Washington allow Uber to compete with taxis

A little known company, named Uber, makes an app that lets customers summon and pay for a car service with their smartphone. Uber's got branches in New York, San Francisco, Washington D.C. and Los Angeles.

Uber partners with existing sedan companies. The app connects users with providers located in a specific city. Uber and driver usually split the proceeds with 80 percent of the are going to the driver.

Therein lies the problem, because in some cities, Uber has been less-than-warmly welcomed by the existing taxi establishment. Today, New York has agreed to let apps be used to get a ride.

Travis Kalanick is the CEO of Uber. He says he's not surprised the company has faced some resistence when they expand into a new city.

"When you're coming up with a new alternative for transportation, there's going to be incumbent players like the taxi industry that are going to be very worried about new technology and how that might change the landscape for their industry," he says.

Kalanick points to lobbyists as a reason Uber has faced eviction from certain cities. He says a lack of competition creates bad taxi services.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

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