Reynolds: Regulators Wreck Uber
The government wants to "protect" you and me (we helpless baby ducks of citizens) -- or so they say -- but what they're really protecting is established taxi businesses.
Law professor Glenn Harlan Reynolds writes at USA Today:
The regulatory knives are out for Uber and Lyft, two ride-sharing services that make life easier for consumers and provide employment opportunities in a stagnant economy. Why are regulators unhappy? Basically, because these new services offer insufficient opportunity for graft.Services like Uber and Lyft disrupt the current regulatory environment. I have the Uber app on my phone. If I need a car in areas where Uber operates, it looks up where I am using GPS, matches me with participating drivers nearby, and in my experience gets me a Town Car in just a few minutes. It's the comfort of a limo service, with the convenience of a taxicab. I get a better service, the driver gets a job, but now there's competition for those entrenched companies.
In most cities, traditional taxi services are regulated by some sort of taxi commission. Similarly, limo services -- the ones that provide the black Town Cars favored by big shots (and used by many Uber drivers) -- are regulated by some sort of livery office. The rules strictly forbid the two sectors of the market from competing with one another. And, generally, entry is limited so that neither faces too much competition in general. In holding down competition, these regulators act on behalf of the entities they supposedly regulate for the benefit of consumers.
They do this because consumers typically pay very little attention to taxi and limo regulations while the regulated industries, unsurprisingly, pay very close attention. They express their gratitude in a variety of ways, some legal, and the regulators in turn look after the interests of the regulated. Consumer well-being is a far less significant concern.
In the world of Administrative Law, this phenomenon is known as "regulatory capture." Set up a government agency to regulate an industry, and in short order it will wind up regulating on behalf of that industry. (One example is the District of Columbia Taxicab Commission, which has been doing its best to block ride-sharing services.) Look at almost any established regulatory regime, and the regulatory environment will tend to favor entrenched companies over new entrants. This is no accident.
And when new competition shows up? That's when the regulators ride to the rescue. Austin, Texas, is impounding cars of drivers for ride-sharing services. The DMV of Gov. Terry McAuliffe's Virginia is also trying to ban Uber and Lyft.
It should be your choice to take a ride in an unregulated taxi, assuming you are a mentally competent adult.
Shouldn't it be? I sure think so.







I honestly don't get how these programs differ from a regulated taxi service that one should be required to be regulated and the other not.
"Sharing" is when I give you something I have, not when I charge you for it.
NicoleK at June 9, 2014 11:04 PM
As Instapundit would say; "Not enough opportunity for graft."
Annie at June 10, 2014 2:51 AM
The regulations you can benefit from would be requirements that drivers be specially licensed and certified in CPR, that the service have enhanced insurance, that the rates be prominently posted, that fares be calculated with standard meters, that the meters be subject to periodic unnanounced inspections from the bureau of weights and measures, that the vehicles be inspected and registered, and that the cabs be clean and the vendor and contact number be painted on the chassis. See to safety and transparent pricing and that's it.
Art Deco at June 10, 2014 6:30 AM
I used a licensed, regulated taxi (it had a meter, bureaucratic legalese posted in the window, yellow, light on top) - as much as any consumer could recognize it as legit.
I was entirely creeped out by the driver. It was late, my house was empty, at the end of a dark windy street. He was asking about my personal situation - obviously I lied and said my husband would be home any minute.
Government can't protect me against creepy. Uber and Lyft can - that driver would NEVER get a fare there - his reputation would be shot.
Logic says the same about transparent pricing with these services. I trust the anonymous public as much as government, in this respect too.
Tell me again, how that official-looking document in the window will help me?
flbeachmom at June 10, 2014 7:33 AM
"And when new competition shows up? That's when the regulators ride to the rescue. Austin, Texas, is impounding cars of drivers for ride-sharing services." ...Yep, and I think they were doing this during one of the DWI crackdown weekends. The official reason is that some of the Lyft drivers were charging more than the federal reimbursement rate (54 cents/mile, perhaps?)
A mayoral candidate called into a morning talk show I was listening to last week when the hosts were complaining about the city's attempts to block the Lyft and Uber launches. He claimed that it was the rideshare services that were the problem, the city "was trying to work with them," blah, blah, blah. The host replied that the city of Austin takes over a year to approve ANYTHING. (This is absolutely true.) The city also claims that this is about people's safety, but having ridden in cabs in Austin before, I doubt that those people are subject to much of a background check.
FWIW, when I plan travel for my boss, he will always pick Uber (when available) over the towncar service our company contracts with. He loves it.
ahw at June 10, 2014 8:41 AM
OK, I'll buy your Uber and Lyft taxis don't need to be regulated argument, but then why do Yellow taxies need to be regulated?
It's exactly the same service!!!
NicoleK at June 10, 2014 9:18 AM
This exists across all industries. A few years ago, I worked for a big insurance company that was spending its policyholders' hard-earned premium dollars on lobbyists to try and block the entry of a new type of insurance product to the market. Insurance is regulated by state insurance departments, and it is a ton of work to introduce a new product. It's a great opportunity for a big, established company to stick its arm in the door and throttle the competition.
As far as the product my employer was trying to block, there was nothing wrong with it as a product, but it would have been hard for our existing products to compete with it. And heaven forbid we simply be innovative and come up with a new product of our own. It took so long to get any damn thing done at that place, I'm sure it would never have happened.
Pirate Jo at June 10, 2014 9:23 AM
But this isn't a different product, it is exactly the same product. The only difference is the form of advertising is different.
NicoleK at June 10, 2014 10:23 AM
Yeah, I know how much those taxi commissions care about "safety". I once survived a cab ride in Vegas, in a vehicle totally bereft of anything resembling shock absorbers, which included a 40-MPH shortcut through a casino parking lot.
As everyone else has pointed out, the main purpose of those taxi commissions is to limit competition. Every vehicle needs a medallion, and some citis limit the number that they will issue to under 100. If you're not politically connected, you simply cannot get one. Even if an existing service goes out of business or turns some medallions back in, there will always be someone ahead of you on the waiting list no matter how long you've been waiting.
Cousin Dave at June 10, 2014 10:37 AM
While I agree with Amy that people should be allowed to ride in unregulated vehicles, and with NicoleK that "regular" taxis likewise need not be regulated, lets also acknowledge the moment an unregulated cab gets in a wreck Uber and Lyft wont be the ones on the hook for the lawsuit.
And if the "independent contractor" doesnt have enough money to pay off those suing him, the victims who dont get 'enough' money who they day before were claiming they had the right to ride in an unregulated cab will now be clamoring for legislators to "do something"
lujlp at June 10, 2014 11:29 AM
Lujlp has hit the nail on the head. Too many people want the "right" to do as they please; but they are not willing to accept the corresponding "obligation" of being responsible for their chcoices.
Jay at June 10, 2014 12:36 PM
While I agree with Amy that people should be allowed to ride in unregulated vehicles, and with NicoleK that "regular" taxis likewise need not be regulated, lets also acknowledge the moment an unregulated cab gets in a wreck Uber and Lyft wont be the ones on the hook for the lawsuit.
You run into the same problem as a vehicle owner when you give a ride to a friend.
This is why all states require car owners to have liability insurance.
I would be extremely surprised if Uber didn't require this of their vehicle owners.
Isab at June 10, 2014 1:11 PM
But this isn't a different product, it is exactly the same product. The only difference is the form of advertising is different.
Agreed. My point was more that what passes for "regulation" as something to "protect us" is usually backed and funded by the established status quo as a way to protect themselves from competition. That we have a political establishment owned and operated by the corporate status quo just shows what a corrupt system we are stuck with.
Pirate Jo at June 10, 2014 1:33 PM
> but they are not willing to accept the
> corresponding "obligation" of being
> responsible
Who says they have a choice? What makes you think there wouldn't be a gratifying shitstorm of civil and criminal prosecutions for malfeasant behavior?
In the United States? Are you kidding me?
Americans have this weird fear that when they can't identify the precise government employee who keeps everyone safe and playing nice, or when they can't remember the last speech in which our president promised to choke some kind of activity through regulation, then that sector is a lawless realm of unchecked perfidy.
Crid [CridComment at Gmail] at June 10, 2014 5:34 PM
>>Americans have this weird fear that when they can't identify the precise government employee who keeps everyone safe and playing nice, or when they can't remember the last speech in which our president promised to choke some kind of activity through regulation, then that sector is a lawless realm of unchecked perfidy.
Americans? Are you sure you know all of us? A sizable majority? How about a sizable majority of those who post on this website? And you see this as the over whelming majority point of view? What's that I smell?
Assholio at June 10, 2014 6:56 PM
That would be "the electorate," Assholio. Just going by their past voting records.
Pirate Jo at June 10, 2014 7:43 PM
Gee, 'holio, it's those sweaty Americans who CLAMORED for the protections they get today.
Just think about this:
"It should be your choice to take a ride in an unregulated taxi, assuming you are a mentally competent adult."
And if I'm not, due to intoxication, then screw me, huh?
This is maddening, the level of inconsistency found here and all over the Web. Here, the quotation merely asks for a special pleading, while the seeker takes other protections for granted, as they are out of sight and thus out of mind.
Radwaste at June 10, 2014 7:43 PM
>>That would be "the electorate," Assholio. Just going by their past voting records.
So you are under the impression that "the electorate" voted for these regulations? What's that I smell?
>>Gee, 'holio, it's those sweaty Americans who CLAMORED for the protections they get today.
Refer to my previous comment.
>>This is maddening, the level of inconsistency found here and all over the Web. Here, the quotation merely asks for a special pleading, while the seeker takes other protections for granted, as they are out of sight and thus out of mind.
Well, if you have any knowledge of the real world, I'm surprised your head hasn't exploded into a cloud of pink mist.
Assholio at June 10, 2014 9:15 PM
You shouldn't pick fights unless you disagree with something. And when that happens, you should be articulate enough to put it in a sentence... Otherwise, you should probably just read things.
Crid [CridComment at Gmail] at June 11, 2014 12:31 AM
Thats never stopped you crid, why do you think it should stop others?
lujlp at June 11, 2014 5:27 AM
>>You shouldn't pick fights unless you disagree with something.
You should probably work on your reading comprehension skills.
Assholio at June 11, 2014 10:58 AM
Leave a comment