Techdirt. Stories filed under "puc" Easily digestible tech news... http://www.techdirt.com/ en-us Techdirt. Stories filed under "puc"http://www.techdirt.com/images/td-88x31.gifhttp://www.techdirt.com/ Thu, 31 Jan 2013 07:49:40 PST And... Yet Another Regulator Flips Out About Uber, Tries To Kill It Mike Masnick http://www.techdirt.com/blog/innovation/articles/20130130/18303421831/yet-another-regulator-flips-out-about-uber-tries-to-kill-it.shtml http://www.techdirt.com/blog/innovation/articles/20130130/18303421831/yet-another-regulator-flips-out-about-uber-tries-to-kill-it.shtml all too well has decided to give Uber all the free Streisand Effect publicity it needs to build its reputation in the market by trying to pass legislation to shut it down. This time it's the Colorado Public Utilities Commission, which is looking to pass some new regulations that effectively make it impossible for Uber to operate its innovative car/taxi service (which is incredibly popular with users) in Denver. Of course, all this has really done is give Uber the perfect opportunity to get tons of attention for its service in Denver as it urges Uber fans to speak out against the regulatory changes.

Uber points out that the proposed changes will basically make its business model illegal in multiple ways -- saying that you can't price based on distance, effectively keeping Uber cars outside of downtown areas that taxis populate, and forbidding Uber's key relationship set up with drivers (independent partners). As Uber points out, these rules don't serve any legitimate regulatory purpose other than to prop up the taxi business model and hurt the disruptive upstart:
These rules are not designed to promote safety, nor improve quality of service. They are intended to stop innovation, protect incumbents, hurt independent drivers, and shut down Uber in Denver.
Of course, we've seen this before. In a bunch of places where Uber operates, the service faces regulatory crackdown by local regulators who seem to do a lot more to protect incumbent taxi services than they do to figure out what benefits the users the most. This gets back to that concept of corruption laundering that I've mentioned a few times. The regulations can be presented as having good intentions: they want to protect riders from getting scammed by unscrupulous drivers, and they want to make sure the market is safe and efficient. But, as with so many regulatory schemes, what can be positioned as having the best of intentions also serves a secondary purpose: to allow incumbents the ability to thrive, while blocking out competition and the impact of disruptive innovation. That seems to be the case here yet again.

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]]> regulation-2.0 http://www.techdirt.com/comment_rss.php?sid=20130130/18303421831 Mon, 19 Nov 2012 03:35:45 PST California PUC Cracks Down On Innovative Ride Sharing Operations As Another Batch Of Taxi Drivers Sue Uber Mike Masnick http://www.techdirt.com/blog/innovation/articles/20121115/16194521069/california-puc-cracks-down-innovative-ride-sharing-operations-as-another-batch-taxi-drivers-sue-uber.shtml http://www.techdirt.com/blog/innovation/articles/20121115/16194521069/california-puc-cracks-down-innovative-ride-sharing-operations-as-another-batch-taxi-drivers-sue-uber.shtml regulatory and legal fights that Uber has been dealing with lately. The company, which basically has set up a super convenient way for people to book a ride (and, in some cases, taxis), keeps running up against a combination of local regulatory agencies who tend to feel that they get to lord over anyone who attempts to do anything involving driving people around for money, as well as existing limo and taxi providers who fear a more efficient system (especially when they profit off of inefficiencies). Of course, some politicians and taxi/limo drivers recognize that greater efficiency is actually good for everyone, allowing a more convenient and useful system, and filling in gaps when regulated supply strains the system.

However, too many are just focused on the status quo. And this isn't to say that there isn't a place for regulatory bodies to ensure that cabs and limos are safe and that they don't take advantage of passengers. But the line between protecting passengers and protecting legacy players from competition sure does become a blurry line very, very quickly. And this week a bunch of these companies have run into legal problems on their home turf. Uber, specifically, has has been sued in San Francisco by some cabbies demanding that the company be shut down. They claim that Uber's car hailing service is really an unregulated taxi service, and thus, unfairly competing with them.

Perhaps the bigger issue, however, is that the California Public Utilities Commission (PUC) has fined Uber and two other companies, Lyft and SideCar (who offer ridesharing). As that Wired link notes, this seems to be a clash between two core concepts that seem to thrive in San Francisco: on the one hand, freedom to innovate and disrupt and, on the other hand, support in government intervention for the public good. I'd argue that the two concepts aren't in quite as much conflict as the article suggests, if the intervention actually is for the public good. The problem is that's not really clear here, and it's not hard to see how it's really for the sake of limiting competition.

SideCar points out that this is a case of regulators not knowing how to classify an innovation:
asserting that we are operating a transportation carrier... is like saying Airbnb is a hotel chain, that Travelocity is an airline, or that eBay is a store
Lyft, similarly, suggests that there's a problem in regulators taking a square peg and trying to shove it into a round hole, because they've never seen a square before:
Transportation has historically been a highly regulated industry, and the existing regulations weren’t designed to imagine a world where two neighbors who have never met are able to connect within a matter of minutes to share a ride across town.
Uber's CEO, Travis Kalanick, told Wired that the PUC fine is particularly ridiculous in its case, since it only works with drivers who are already regulated by the PUC. It's just offering them another channel for finding customers. But under the PUC's ruling, it appears that they want those people to be doubly regulated, which seems completely wasteful:
Our contention is that if you read the regulations, such a notion doesn’t make sense. Are we supposed to give drivers a second drug and alcohol test? Are we supposed to have cars inspected by the DMV a second time after they’ve already inspected (our) partners’ vehicles?
In the end, you have to wonder if the role that regulators have still makes sense for these kinds of innovators. Yes, there are issues about safety and avoiding scams, but the various companies have built in systems to deal with that -- such as driver ratings and public reviews. Those types of things weren't really possible in the past, which is why you needed a PUC to make sure taxidrivers weren't ripping people off. But now the "PUC" can be the public itself. But... that only works if you believe the regulations are supposed to help the public, rather than the legacy players.

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