Battle To Regulate Ridesharing Moves Through States

New submitter jeffengel writes: The push to regulate services like Uber and Lyft has spread through state legislatures nationwide. At least 15 states have passed ridesharing laws in 2015, joining Colorado, California, and Illinois from last year. More could follow, with bills pending in Massachusetts, Michigan, North Carolina, and others. All this activity has led to new clashes with companies, city leaders, and consumers. Ridesharing bills have stalled or been killed off in Texas, Florida, New Mexico, and Mississippi. Meanwhile, Uber has exited Kansas and is threatening to leave New Jersey and Oregon, while Lyft has ceased operations in Houston, Columbus, and Tacoma. How this plays out could affect the companies' expansion plans, as well as the future of transportation systems worldwide.

Comments

Mixed reaction

[JoshuaZ]

I'm not sure how I feel about this. On the one hand, some of these regulations are clear attempts to just protect the taxi industry from new models. On the other hand, some of the regulations (like having some basic insurance to cover if things go wrong) are pretty reasonable. On the gripping hand, both Uber and Lyft are both just blatantly ignoring regulations in many jurisdictions, and whether or not one thinks the laws should be there, it is hard to think that having cheaper car services is such a compellingly necessary service that it can morally or ethically justify ignoring laws.

Re:Mixed reaction

[paulpach]

I'm not sure how I feel about this. On the one hand, some of these regulations are clear attempts to just protect the taxi industry from new models. On the other hand, some of the regulations (like having some basic insurance to cover if things go wrong) are pretty reasonable. On the gripping hand, both Uber and Lyft are both just blatantly ignoring regulations in many jurisdictions, and whether or not one thinks the laws should be there, it is hard to think that having cheaper car services is such a compellingly necessary service that it can morally or ethically justify ignoring laws.

In the so called "land of the free", I should be able to get a ride from anyone I please as well as give a ride to anyone I please and charge for it if I want to. What is wrong here is not violating the laws, it is the laws themselves that restrict this voluntary mutually agreed upon exchange.
If insurance is a big deal, then I as an uber user would only chose to ride with people that have insurance.

Protecting taxis is awful. By that logic we should have made refrigerators illegal since they threatened ice factory workers.

If you don't like the Uber and Lyft services, then you simply don't use them. But we have no right to forbid other people from using it or place restrictions upon them.

Re:Mixed reaction

[Registered Coward v2]

I'm not sure how I feel about this. On the one hand, some of these regulations are clear attempts to just protect the taxi industry from new models. On the other hand, some of the regulations (like having some basic insurance to cover if things go wrong) are pretty reasonable. On the gripping hand, both Uber and Lyft are both just blatantly ignoring regulations in many jurisdictions, and whether or not one thinks the laws should be there, it is hard to think that having cheaper car services is such a compellingly necessary service that it can morally or ethically justify ignoring laws.

If you wish to speak of morals and ethics, perhaps you should review the existing structure and their pricing model first.

There's a reason we have a compelling argument for competition here, and it's not because they have cooler looking cars.

There certainly is a compelling argument for competition, as there is for proper regulation. So when one looks at the existing structure the question becomes what parts of it need to be applicable to new entrants providing the same service, i.e a ride for hire? Uber et. al. are merely a modification of the existing call a taxi on a phone model and thus should be subject to similar regulatory oversight. You contact a dispatcher, they send an independent contractor to pick you up and take you to a location for a fee. They may not have a medallion on their car and may or may not own the car but the end result is the same - a ride to a location in exchange for money.

Of course the existing companies are fighting tooth and nail becasue there is a lot of money at stake. In locations where medallions are scarce people can have hundred of thousands of dollars tied up in medallions, the medallion may be the most valuable thing the company or individual owns. Uber threatens that by putting cars on the road, thus threatening to overcome the artificially constrained supply of cabs and make owning a medallion necessary and thus lowering the value of existing medallions. So one can expect the medallion owners, as well as those who lend money to people to buy them, to fight back. Interestingly enough a medallion is one expensive item that is tailored to people with poor or no credit, since as one lender put it "If they don't pay all I have to do is pry the medallion off of the hood. I can then resell it but they can no longer drive so they'll do anything needed to make their payments."

Re: Mixed reaction

[Anonymous Coward]

You can drive any car you want, on your property, and you can charge people for rides too.

Your problem is you aren't rich enough to own your own roads and cities too. Your freedoms were traded for a social contract a very long time ago.

Re:Mixed reaction

[Anonymous Coward]

If you give someone you don't know money for a ride somewhere, you are entering into a business transaction. The person you give the money to now owes the state government sales tax, owes both state and federal income tax and is now open to potential litigation if they get in an accident and you sue them for injuries.

If they don't have insurance, you probably won't get much suing them and will have to pay your own medical bills (have fun with that one) and lawyer fees.

Re:Mixed reaction

[Nidi62]

In the so called "land of the free", I should be able to get a ride from anyone I please as well as give a ride to anyone I please and charge for it if I want to. What is wrong here is not violating the laws, it is the laws themselves that restrict this voluntary mutually agreed upon exchange. If insurance is a big deal, then I as an uber user would only chose to ride with people that have insurance.

Government has a legitimate interest in monitoring and regulating businesses. And guess what? As soon as you receive money for a service you are operating a business. It is in the public interest that a business is operated and run in a manner that is safe for it's employees, customers, and the greater public and also to ensure that they are not defrauding customers or suppliers/vendors.

Re:Mixed reaction

[Impy the Impiuos Imp]

As long as the medallion and similar limiting systems continue to exist, all gloves are off as far as I'm concerned.

There's more to freedom than freedom of speech -- freedom to pursue your own business, and nobody has thr right to restrict entry for the purpose of limiting co.petition. "This here town ain't big enough to support two companies" should be left on the scrap heap of disreputable history.

Re:Mixed reaction

[Nidi62]

Yet as a member of the public, I have no interest in this. Why does my opinion that the rights of others matter more than your claim of a so-called "public interest".

If an Uber driver has been taking stimulants to stay up and drive for 48 hours straight crashes into your car, or hits you trying to cross the street, would you take an interest then? Everyone else certainly does when you are injured so severely you can't work and have to draw disability for the rest of your life and we are paying for it. Things like that happened regularly in industries such as taxis and trucking, with overworked drivers causing fatal accidents. That is why regulations were enacted. They still happen, but they are less frequent and the drivers are severely punished when they do so.

Re:Mixed reaction

[plopez]

That looks good on paper but rarely works out in real life. In order for it to work everyone must be honest and a monopoly does not exist. We are a very far way from the idealized small shopkeeper model of Adam Smith. Here are some reasons for government regulation of taxis:

1) So customers do not get ripped off. Prices are set or at least clearly advertised.

2) So customers are not raped or murdered. If you hire a ride from Joe Random taxi driver without licensing and a background check you have no assurance about the driver. In fact the lack of assurance could kill the industry as people look for other options.

3) Insurance. If there is an accident are passengers, occupants of other vehicles, or pedestrian need to be covered if the taxi driver is at fault.

4) Mechanical safety of the vehicle. Has the Uber and Lyft cars been checked over for dangerous faults or wear and tear? Are the tires good? Etc.

5) ENSURING competition. If one company gets too big you restrict their licenses while issuing more for their competitors. Sometimes the best way to approach the ideal of a free market is through careful regulation. Free market != unregulated market.

Those are the ones on of the top of my head. The world is much more complex that Economics 101 or a fictional account of how one writer thinks the world should work. It is even more complex and dynamic that even people with Phds in economics can imagine, IMO. Instead of simplistic solutions we need to look for solutions that actually work.

Re:Mixed reaction

[dywolf]

youre putting the cart before the horse.

they aren't regulating Uber to protect taxis.

they are regulating Uber because it IS a taxi.

Re:Mixed reaction

[Okian Warrior]

If an Uber driver has been taking stimulants to stay up and drive for 48 hours straight crashes into your car, or hits you trying to cross the street, would you take an interest then? Everyone else certainly does when you are injured so severely you can't work and have to draw disability for the rest of your life and we are paying for it. Things like that happened regularly in industries such as taxis and trucking, with overworked drivers causing fatal accidents. That is why regulations were enacted. They still happen, but they are less frequent and the drivers are severely punished when they do so.

I wish we could get away from the "we need regulations, because what if *this* happened!" model of legislation.

It's a simple appeal to emotion (fear, in this case), it's meant to turn off your rational thought processes and enlist you as a dumb follower.

A rational argument might analyze not only the possibility of this happening, but also its *likelyhood*.

Changes should be made not on the basis of probabilities, but from a comparison of risk and reward. Risk is probability times cost. The argument above points out a risk and a value for this risk: Uber and Lyft have been running in gypsy mode for long enough that we should be able to identify the probability of such an occurrence, and actuarial tables should provide us with the cost.

We can then make a direct comparison of the risk of riding with Uber/Lyft with the risk of riding in a cab, and the cost of an Uber/Lyft ride with the cost of a taxi ride.

If Uber and Lyft come out having a lower risk-to-benefit ratio than taxicabs, then it makes sense to dump the taxi regulation infrastructure entirely and just let people operate Lyft and Uber services.

The rationalization of this argument (which is not in any related to the rational argument) is to say that the abuses prior to regulation were due to lack of driver accountability. Regulation reduced the risk by making taxi drivers (and the businesses) accountable for their actions, and it worked well for its time.

The rationalization might further say that the internet and permanent feedback mechanisms fill this role less expensively than the medallion system. The technology makes a perfectly working system outdated. Buggy whips come to mind.

If you want to have a rational discussion, let's take municipal income out of the argument (it doesn't bear on the core issue), the private corporate interests out of the argument (they are not remotely impartial), and the employment out of the argument.

It's a simple case of "market liquidity": Uber and Lyft present a more liquid market with the same benefits as the more expensive system.

Re:Mixed reaction

[FranTaylor]

an uber driver who is on his way to pick up a passenger is most certainly on the job

he started working when he accepted the fare and headed to the pickup point

Re: Mixed reaction

[Prune]

They first confiscate it from you and me, whether we want it or not.

A common misconception, but one that doesn't match reality. Governments create money through the treasury and central bank (a.k.a. federal reserve in the US). Government spending doesn't proceed from money taken in by taxation; rather, money is created ex nihilo and electronically credited to appropriate accounts, then spent. There's no constitutional requirement that the money removed from circulation by taxation has to balance spending in pretty much any developed country in the world: the two are not operationally linked. Indeed, one of the major purposes of taxation (besides reducing the money supply) is enforcing the use of the official national currency -- and that's why you can only pay your taxes in that currency. Tax "revenue" is not for extinguishing debt. And the debt issue itself is another one attracting misunderstanding, because of the tendency by people to apply microeconomic "common sense" to macroeconomics, which is a well-known fallacy. The majority of the debt of a nation like the US is just a number registered between treasury and central bank/fed, and is like debt between husband and wife, pretty much an accounting fiction that doesn't have to be repaid (reducing it, however, makes for good politics); of the rest, much is held by nationals, not foreigners/foreign governments. This configuration gives governments great power to influence their economies through control of the money supply, something they have exclusive legal power to as monetary sovereigns**. Whether this is generally done correctly, incompetently, or abused, is a matter of politics. I'll point out this, however: the common argument against government spending -- inflation -- only applies when you're close to full employment; otherwise, spending feeds aggregate demand rather than inflation.

** The glaring exception being, of course, the euro currency, which nicely shows how attempting a monetary union without having a fiscal and economic union only benefits those who can maintain a trade surplus (Germany), thus beggaring their neighbors in classic mercantilist manner.

Some further reading: http://papers.ssrn.com/sol3/pa... http://bilbo.economicoutlook.n...

Disclaimer: my post is descriptive, not prescriptive. I'm simply pointing out how things are, not passing judgment on whether this is how they ought to be, and will keep my opinion to myself as I've no interest in a political discussion on Slashdot.

Re:Mixed reaction

[AK Marc]

Ubiquitous and cheap taxis decrease the number of cars on the road. Medallions limiting taxis increase cars, not the other way around. If you can walk out and hail a cheap cab any time of day, anywhere in the city, why would you ever want to own a car?

This is ridiculous!

[Anonymous Coward]

How can something like this become a priority with lawmakers when there are other more serious issues to address such as unemployment, low wages, and the deficit? I for one cannot wait until the younger generation moves into congress. The current bunch of bats in the house are useless!

Stop calling it that!

[Anonymous Coward]

It is NOT ridesharing! Ridesharing is when you share a ride with someone. These are people who are being paid to bring you somewhere, but they don't plan on going there too!

Ridesharing is perhaps carpooling to work. Or maybe a student hopping a ride with another student in college to go home for break.

"Ridesharing"

[American AC in Paris]

If y'all are still telling yourselves that services like Uber and Lyft are "rideshares", you're not paying attention, and haven't been for a long time.

Ridesharing suggests that people are sharing a ride from point A to point B--that is, they're both going that way, and thus are going to slug together to save gas/cost.

Uber and Lyft are effectively taxi services that uses an app instead of a dispatcher. The driver seeks out a fare, starts the timer, drives the fare to their destination, and then seeks out another fare.

The driver is not "sharing" anything, nor is the passenger. This is a taxi service.

Re:"Ridesharing"

[Hardhead_7]

True. These companies are "ridesharing" like hiring a carpenter is "hammersharing."

Re: Battle to Regulate Free Market

[smooth wombat]

Auctions. They are they ultimate free market. People bid on something up to the point they believe the product is worth. No government interference or price controls.

Re:Fark those clowns

[friedmud]

Licensed, legitimate, crab companies also use the high barrier of entry in many places to keep out competitors in order to artificially inflate prices. They lobby like crazy to make sure that things stay the way they have been.

I think it's interesting that people take this stance against Uber. I thought "we" usually like the upstart guys that are overthrowing established monopolies...

Don't cry for the cab companies...