Whatever you might think of Uber in terms of its attitude and practices (and, really, people feel this weird need to rant on about such feelings, but that’s unrelated to the point of this post — so no need to tell everyone), you can’t really deny that it has truly revolutionized the way that many people are able to get around in a variety of metropolitan areas.
And Uber and its various competitors have done this by building a better system that is much more convenient and easy to use, and actually using much more realistic market forces, rather than doing silly things like artificially limiting the number of taxi medallions to keep taxi services scarce and expensive.
Of course, the old beneficiaries of the system, have hit back any way they can. As we’ve written repeatedly, various cab companies and bureaucrats seem to go out of their way to attack such ride sharing services. The typical go-to claim from those hating on ride hailing services is that because they’re less regulated, they’re more subject to fraud and abuse or unsafe driving conditions. There is, however, little evidence to back that up. While there are some anecdotal stories of bad ride hailing drivers, we’re already seeing innovative ways to deal with that. For example, in India, Uber recently added an emergency button to its app, which would directly alert police if a rider was in trouble.
In short, what we’ve seen is that, through innovation, competition and (most importantly) an abundance of information, a better overall result can occur. The reasons for many taxi regulations in the past was because of clear information asymmetry: taxi drivers could (and frequently did) screw over passengers, because there was basically no recourse. There was no way for a rider to know if the driver was safe or not, and (more importantly) no real way for that rider to then warn future passengers. But ride hailing services changed that in a big way by flipping the equation, and allowing a good way to rate drivers and to create incentives for those drivers to do a good job. It’s not perfect, but, frankly, my own experience in using Uber and Lyft has been that the overall experience has been much, much better than using a traditional cab.
In New York City — a place where cabs have long been limited by its famous medallion system — there’s been a struggle to deal with this innovative change. Just last year, we wrote about the Taxi and Limousine Commission declaring Lyft to be illegal. And, a few months ago, a NYC politician proposed a bill that would require the TLC to create its own Uber-like app. Because, apparently, innovation works by having the government mandate another part of the government copy an innovative company?
Either way, the TLC is now looking to go even further, in proposing new rules that say that basically any ride hailing app should be fully regulated by the NYC TLC and including a bunch of conditions that really don’t seem necessary. Some of them just seem like relics from a previous era that are there because they were there in the past. It’s difficult to see why that makes any sense. And then there are new requirements that also seem bizarre. Like this:
The website and/or smartphone application must provide Passengers, upon request, with an estimate of the total fare, inclusive of all fees and any price multiplier or variable pricing policy in effect, for the ride.
I can see how that would be a nice feature to have, but should it be required by the government? If Uber doesn’t provide that and Lyft does, then isn’t that just a competitive advantage for Lyft? And, really, do existing taxi systems already do that beyond a driver tossing out a random estimate off the top of his head on how much it will cost to go somewhere?
Then there’s something really concerning: buried in the rules is the idea that drivers can only work for one provider at a time. I’ve seen many drivers that work for both Lyft and Uber (and sometimes others as well). Specifically, the rules have a “one device” rule — saying drivers can only use a single device at a time, but many drivers that I’ve seen who work for multiple services have separate devices (and some, like Uber, will offer to rent you a special phone just for being an Uber driver, if you don’t want to/can’t use your own phone).
A Base Owner must not dispatch a For-Hire Vehicle that is equipped with more than one electronic device in addition to the dispatch equipment required by the Vehicle’s affiliated Base…
Again, I’m sure the TLC would argue that this is for safety reasons. Elsewhere in the document it suggests that by arguing that this single device cannot be handheld:
a For-Hire Vehicle may be equipped with one electronic device that is used to accept dispatches from a Base or FHV Dispatch Application, provided that that the device is mounted in a fixed position and not hand-held and use of the electronic device is limited to either voice or one-touch preprogrammed buttons or keys while the Vehicle is in motion.
And, sure, you can reasonably worry about the driving safety of someone who has multiple such devices, though I’ve seen plenty of drivers with two or three phones lined up in a way that seems perfectly reasonable.
The more glaring concern here, though, is that such a rule basically locks in the incumbents and harms the upstarts. If a driver can’t drive for Uber and a new ride hailing startup, they’re likely to just stick with Uber, and the upstarts get cut out. That’s a problem. Even if that’s not the intention, it’s these kinds of regulations that all too often lock things in so that incumbents stay in power, while startups are blocked.
Furthermore, just the idea that any new service in this space has to now go and plead with the TLC to get “licensed” is going to slow and limit the opportunities for new and innovative players in this space. Uber got to where it was by building a useful service, not having to ask local bureaucrats for permission every time. The next generation of companies looking to reinvent the space won’t be so lucky — and that may mean we all suffer.
With thanks to thoughtful Techdirt
The Latest on: Ride Hailing Services
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The Latest on: Ride Hailing Services
- Ola and Uber are shutting service in this Indian city from today, here are detailson January 31, 2023 at 7:46 pm
Ola and Uber have been alleged to mistreat drivers of cab, taxi and bike. In protest against the harassment, services will be discontinued in Guwahati, Assam.
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Russian-owned mobile hailing app inDrive insisted on Monday that it was not currently monetizing its service in the country after being flagged by the Land Transportation ...
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- Global Ride-Hailing Platform inDrive Partners SHIELD to Boost Trust and Fairnesson January 25, 2023 at 6:02 pm
SAN FRANCISCO, Jan. 26, 2023 /PRNewswire/ -- inDrive, the world's fastest-growing online ride-hailing service, today announced that it is utilizing global risk intelligence company SHIELD's Device ...
- Ride-hailing passengers who follow the rules shouldn’t pay for bad behavior of otherson January 25, 2023 at 7:56 am
Ride-hailing and food app drivers deserve protection and should be reimbursed if they have their privileges revoked because of the made-up tales of disgruntled passengers. But we don’t think other ...
- Uber’s quest for sustainability: Partnering with auto manufacturers to design customized electric vehicles for ride-sharing and delivery serviceson January 24, 2023 at 10:39 am
In recent years, the ride-hailing industry has significantly shifted towards electric vehicles (EVs). Companies like Uber have recognized the environmental and economic benefits of using EVs for their ...
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The Ride Hailing Services Market report covers segment data, including: type segment, industry segment, channel segment etc. cover different segment Ride Hailing Services Market size, both volume ...
- Ordinance would hike fees for O’Hare trips booked through ride-hailing appson January 19, 2023 at 6:03 pm
A 10-cent fee per ride proposed by Ald. Susan Sadowski Garza (10th) would fund a nonprofit to connect drivers with representation in grievances and other services.
- Ride-Hailing Service Market Opportunities, Demand and Forecasts 2023-2029 with Top Countries Dataon January 18, 2023 at 4:00 pm
"Ride-Hailing Service Market" studies the global Market Size and Forecast by 2023-2029. The report includes a comprehensive study on the definition, classification and market survey of Production ...
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