Techdirt. Stories filed under "taxis" Easily digestible tech news... http://www.techdirt.com/ en-us Techdirt. Stories filed under "taxis"http://www.techdirt.com/images/td-88x31.gifhttp://www.techdirt.com/ Thu, 28 Mar 2013 13:03:00 PDT Taxi, Limo Trade Group Hates Innovative Upstarts, Labels Them 'Rogue Applications' Mike Masnick http://www.techdirt.com/blog/innovation/articles/20130327/02594322476/taxi-limo-trade-group-hates-innovative-upstarts-labels-them-rogue-applications.shtml http://www.techdirt.com/blog/innovation/articles/20130327/02594322476/taxi-limo-trade-group-hates-innovative-upstarts-labels-them-rogue-applications.shtml
Not surprisingly, the more well known apps -- Uber, SideCar, Lyft and Tickengo -- all have received the coveted "red light." While according to the TLPA this means they're dangerous "rogue apps," to me it suggests that they're all doing something right. They're providing services that people want that are more convenient or better priced than the old guard, which is why the old guard has to attack them.

The key point they make is that these are all "unregulated" taxi services, which allows them to go into full out moral panic mode about how, without regulations, these services will likely take advantage of consumers. The paper talks about threats of "criminal" drivers and the potential for meter rigging. Of course, as we've seen in other industries, this seems like a clear case of businesses using regulations to keep out innovation and competitors, rather than for a legitimate purpose. Yes, many of those regulations were put in place for a good reason originally, yet many of those reasons really don't apply to these new services.

In the past, you needed regulations to protect you from drivers taking extra long paths to where you wanted to go, driving poorly or charging too much -- because drivers could do that and there was little recourse. But the thing about these new services, which rely heavily on online reputation systems, is that these reputation systems make the need for such regulations much less necessary. The services, like Uber, set the price and poor drivers get booted from the system based on user reviews. And, since most people who have a mobile phone these days to use one of these apps will also have GPS on those phones, people can self-monitor if the driver is taking a reasonable route. Basically, the original safety reasons (which, again, may have made sense at the time) for many of those regulations simply may not really apply to these new services. But rather than deal with that, the legacy players are doing what legacy players do: using those regulations to try to stomp out innovation and stifle competition.

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]]> can't-beat-'em-in-the-market,-so... http://www.techdirt.com/comment_rss.php?sid=20130327/02594322476 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 Thu, 6 Dec 2012 20:02:00 PST DC Makes It Official That Uber Is Legit Mike Masnick http://www.techdirt.com/articles/20121205/02020321233/dc-makes-it-official-that-uber-is-legit.shtml http://www.techdirt.com/articles/20121205/02020321233/dc-makes-it-official-that-uber-is-legit.shtml battles, it appears that the Washington DC council has made it official that Uber should be fully legal to operate in the city, providing easy rides for hire via your mobile phone. Uber, of course, has run into problems with local regulatory boards across the country (though it frequently, and mostly successfully, turns those conflicts into marketing opportunities). Still, it's nice to see DC figure out a way to make it clear that Uber is absolutely legal there. Apparently the company had to agree to one "concession": to make sure that it really is serving all parts of the city, they had to build into the app a notice to report any discrimination. Seems reasonable enough. While I actually think Uber execs kind of enjoy butting heads with local officials, and rallying the legions of Uber fans behind the cause, I think they'd also agree that, in the long run, it's better for everyone to just have the damned service (which is pretty cool, honestly) be considered legal.

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]]> about-time http://www.techdirt.com/comment_rss.php?sid=20121205/02020321233 Wed, 17 Oct 2012 03:32:17 PDT Can't Win 'Em All: Uber Gives Up Attempt To Do UberTaxi In NYC (For Now...) Mike Masnick http://www.techdirt.com/articles/20121016/18380820726/cant-win-em-all-uber-gives-up-attempt-to-do-ubertaxi-nyc-now.shtml http://www.techdirt.com/articles/20121016/18380820726/cant-win-em-all-uber-gives-up-attempt-to-do-ubertaxi-nyc-now.shtml pushing regulatory boundaries across the country, often showing how restrictive local regulators could be towards innovation. In many cases, Uber has been able to generate enough public support that local taxi and limo regulators ended up backing down. But you can't win 'em all. Uber has admitted that it's pulled the plug on UberTaxi in New York City.

While Uber is most well known for its "black car" service, it's also been moving aggressively into the taxi world (which is why it's getting sued in Chicago). NYC's Taxi and Limo Commission (TLC) has fought against this move, since the law technically requires cabs to be hailed directly from the street -- and the TLC claimed that hailing from a phone violated that. Uber, however, claims that the TLC has admitted privately that the service is legal. Either way, the TLC threatened cabbies who used Uber, and that limited the number willing to take part, which probably made the service a lot less interesting for users. And, for now, the service has shut down.

The TLC, for its part, seems to suggest that this is only temporary, and it would like to bring such services back -- but it needs to conclude existing contracts:
"In recent months, as e-hail apps have emerged, TLC has undertaken serious diligence and is moving toward rule changes that will open the market to app developers and other innovators. Those changes cannot legally take place until our existing exclusive contracts expire in February. We are committed to making it as easy as possible to get a safe, legal ride in a New York City taxi, and are excited to see how emerging technology can improve that process. Our taxis have always been on the cutting edge of technological innovation, from GPS systems to credit card readers."
Hopefully that's true, but the devil is in the details... we'll see what happens early next year.

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]]> more-regulatory-fighting http://www.techdirt.com/comment_rss.php?sid=20121016/18380820726 Fri, 21 Sep 2012 13:32:51 PDT Uber's Most Important Innovation: Highlighting Totally Bogus Local Restrictions Mike Masnick http://www.techdirt.com/articles/20120921/01352320456/ubers-most-important-innovation-highlighting-totally-bogus-local-restrictions.shtml http://www.techdirt.com/articles/20120921/01352320456/ubers-most-important-innovation-highlighting-totally-bogus-local-restrictions.shtml summer uproar that caused the DC taxicab commission to dump a proposed plan that would have artificially kept Uber's prices high, the commission is back, and it's got another (bad) proposed rule (pdf) that would make life difficult for Uber and its independent drivers.

If you're unfamiliar with Uber, it's a pretty great service that makes it really easy to use your phone to get a car (usually a black car akin to a typical car service, but in some cases smaller cars or even actual cabs). Users have a credit card on file, so you never have to even handle payment stuff as it's all done automatically. It's also been innovative in how it works with drivers, who are independent contractors. Using Uber is more expensive than a cab, but it's so easy and useful that almost everyone I know who uses it, loves it.

However, taxi and limo services are some of the most highly regulated local markets out there, and Uber just keeps running up against those random or pointless rules and regulations. In this case, the new DC rules clearly seem designed to mess with Uber. Among some other things, it would require drivers to give riders a paper receipt, and would also say that you can't have a car business with fewer than 20 cars. That really mucks with the way Uber partners with drivers, who are often one-man (or woman) shops, doing this to make money. But, in some cases, they can also allow someone to build up their own "fleet" of cars, but which operate via Uber's platform. But under these rules, it may be difficult for drivers, or for entrepreneurs buying up a few cars, to really embrace this model. Finally, the new rules prohibit dropping people off outside of DC by saying you have to stay within the territory you're registered in.

For its part, the DC taxicab commission disagrees with Uber's assessment of the new rules expressing a clear bit of frustration with the company:
"They don't what they're talking about," Linton says. "They often don't know what they're talking about."
He also pushed back on a few other points:
According to Linton, the regulations would still allow for independent sedan operators with one car, and would only eliminate companies with a handful of cars that he says most frequently try to game the system. Linton says paper receipts will prevent drivers from charging for miles they didn't drive, and the regulations will only prevent sedans from operating in jurisdictions they aren't registered in—i.e., an Uber trip from Maryland to D.C. could be driven by a car from Maryland or D.C., but not from Virginia.
In other words, he's got perfectly good reasons that the rules aren't bad... except for the simple fact that none of his explanations make sense. Even if it does allow single car operators, why should it be illegal to own between 2 and 19 cars? They say the smaller shops often game the system -- but in that case, go after them for such gaming of the system. Don't completely wipe out all the other good players with such a broad blanket ban. As for paper receipts... huh? I don't see how a paper receipt prevents a driver from overcharging. Even worse, this somehow suggests that Uber's drivers are doing that. But I've never seen or heard any such complaints against Uber. Is there anyone clamoring for a paper receipt from Uber? And, if there are such mysterious people out there... um... is it really that important to pass a rule for them?

Honestly, these rules seem much more designed -- as so many rules are -- to protect legacy players against upstarts like Uber.

And, of course, this is happening all over the place. We already covered the situation in Boston, but there was recently a similar mess in New York City where Uber partners with real cabs (as opposed to car service cars), but which the city is trying to block.

All of these efforts seem like crony capitalism at its best: taking existing inefficient systems, and then blocking unique innovators, whose customers seem pretty damn happy for the most part. Uber, of course, long ago realized something very simple: even though it's fighting these battles on every front, the publicity from it is the best advertising it could ever get. In fact, we've heard that the use of the service tends to go up significantly after such fights. This, of course, frustrates Uber-critics on things like the taxicab commission, as they suggest that Uber complains about these things solely for the publicity. Even if that was the case, I don't see how Uber's wrong. If it gives them publicity for a service people like, more power to them. The real question should be why we still allow such a blockade on innovation by various taxi commissions.

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]]> keep-it-up http://www.techdirt.com/comment_rss.php?sid=20120921/01352320456 Tue, 10 Jul 2012 10:19:00 PDT DC Dumps Bill To Force Uber Into High Prices; Complains That The Bill Was To Help Uber Mike Masnick http://www.techdirt.com/articles/20120710/09531219647/dc-dumps-bill-to-force-uber-into-high-prices-complains-that-bill-was-to-help-uber.shtml http://www.techdirt.com/articles/20120710/09531219647/dc-dumps-bill-to-force-uber-into-high-prices-complains-that-bill-was-to-help-uber.shtml five times as much as a cab, arguing that they need to regulate what is considered a "premium class." They don't explain why one needs to regulate what's premium and what's not, but that's what you get in a massively regulated/anti-competitive market. The public outcry over this regulation, however, has resulted in the Councilmember who wrote the amendment, Mary Cheh, backing down and shelving it.

As we noted in our earlier post, Cheh had said all along that the amendment was actually an attempt to legalize Uber, after a Taxicab Commission "sting" earlier this year, which claimed that Uber was acting illegally. In response to all of this, Cheh seems upset, since she says that she worked with Uber to create the amendment, and was blindsided by the criticism:
"Several months ago, Uber contacted me and asked to work together to legalize services like Uber in the District... Since then, I have met with Uber many times, negotiated in good faith, and believed that I had reached an agreement with them last week."
Others have suggested that parts of the amendment could be acceptable if they remove the minimum pricing rules. Uber, for its part, claims that it's always believed the service was legal in DC, so it never believed that the amendment was needed to "make it legal." For what it's worth Uber clearly has benefited from this fight, as it drew an awful lot of publicity to the company's presence in DC (and elsewhere). Either way, it seems difficult to see how regulating a high price benefits Uber.

And, in the end, what you're left with are questions about why taxi licensing needs to be so restrictive and so all-encompassing. Are there concerns about keeping passengers from being ripped off and keeping them safe? Sure, but there seem to be ways to deal with that which don't involve entirely regulating every aspect of the market, limiting competition and setting the actual pricing. But, in the end, as we've seen in other markets, those in regulated markets tend to figure out ways to use the regulations to their own advantage...

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]]> regulatory-capture http://www.techdirt.com/comment_rss.php?sid=20120710/09531219647 Tue, 10 Jul 2012 03:03:00 PDT DC Seeks To 'Legalize' Uber... By Forcing It To Be Way More Expensive Than Cabs Mike Masnick http://www.techdirt.com/blog/innovation/articles/20120709/22540419635/dc-seeks-to-legalize-uber-forcing-it-to-be-way-more-expensive-than-cabs.shtml http://www.techdirt.com/blog/innovation/articles/20120709/22540419635/dc-seeks-to-legalize-uber-forcing-it-to-be-way-more-expensive-than-cabs.shtml NYC cab medallions last year highlighted just what a ridiculous system this is. It's almost impossible to find an economist who thinks this setup is good for the public. And yet it's quite common.

Over the last few years, a few startups have tried to disrupt this market -- and they always get attacked for it, either by local cab/limo services or the local officials in charge of regulating the market. The most well known of these companies is Uber, who is looking to really disrupt the market with a service that they admit is more expensive, but which provides really amazing convenience and service in exchange. Users of Uber love the service, in my experience. A couple weeks ago, I was in Chicago to speak at a conference, and Uber's CEO, Travis Kalanick, spoke at the same event, with a really entertaining talk -- much of it about how every time he tries to disrupt a market, legacy players get really, really pissed off at him.

As part of that talk, he discussed the situation in Washington DC, where the local Taxicab Commission Chairman, Ron Linton, ran a "sting" to claim that Uber was violating DC laws. Since then there's been a lot of back and forth in the fight in DC, leading to a new set of regulations that are being introduced. Of course, as is typical of taxi/limo regulations, they often say one thing but mean the exact opposite. In this case, the Taxicab Commission appears to be positioning the new regulations as being designed to make Uber "legal,", but, as Uber's Kalanick notes in a blog post, it includes some really poisonous provisions that require Uber to charge at least 5 times what a taxi charges. They're not even subtle about this. As the text of the bill reads:
(c) (1) The minimum fare for sedan-class vehicles shall be five times the drop rate for taxicabs, as established by 31 DCMR § 801.3 (a).

(2) The time and distance rates for sedan-class vehicles shall be greater than the time and distance rates for taxicabs, as established by as established by 31 DCMR § 801.3 (b) and (c).
The DC Taxicab Commission claims this is to "ensure that sedan service is a premium class of service with a substantially higher cost that does not directly compete with or undercut taxicab service." But why? We don't do this in any other market. We don't tell nice restaurants that they must charge more than fast food restaurants, so as not to compete. We don't tell Apple that it must charge more for computers so that they're seen as "premium" devices. We let the market work things out. That's what enables disruptive innovation and competition to take place.

What's amazing here (and, to a lesser extent, in nearly every major city in the US) is how they effectively admit that they don't want competition, they don't want innovation. They want a protected market that is artificially inflated. Why would the people of DC accept this kind of thing?

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]]> can't-have-competition http://www.techdirt.com/comment_rss.php?sid=20120709/22540419635 Wed, 20 Jun 2012 12:05:00 PDT Police Ticketing Informal Rideshare Participants Based On No Law, But To Protect Port Authority Revenue Mike Masnick http://www.techdirt.com/articles/20120620/04285719400/police-ticketing-informal-rideshare-participants-based-no-law-to-protect-port-authority-revenue.shtml http://www.techdirt.com/articles/20120620/04285719400/police-ticketing-informal-rideshare-participants-based-no-law-to-protect-port-authority-revenue.shtml taxi companies and bus companies trying to shut down upstarts such as ride-sharing/carpooling services as being "unlicensed" transportation offerings. What they really mean, of course, is that they're competition in a market with artificial barriers to entry, which artificially keep prices high -- sometimes astronomically high. But, of course, as with any attempt to defeat real competition, those in support of cracking down have some sort of sob story, and governments and law enforcement often fall for it with no evidence.

Aaron DeOlivera points us to a sort of twist on the situation described above, where the real issue is people paying less money to the Port Authority of NY. You see, if you are in a carpool (of at least 3 people) and cross the George Washington Bridge (between the Bronx and New Jersey) you save $6 on the toll. That's a decent-sized savings, so people have set up an informal sort of ride share, in that those who want to get across will wait at a nearby bus station, and drivers will swing by and pick them up for the ride. The riders get a free trip across the bridge... and the driver gets a lower toll. Win-win.

Except for the Port Authority. And apparently the police are helping out the PA by giving tickets to people picking up hitchhikers based on absolutely no violation of any law.
... the crackdown on carpools smacks of a revenue-grab by the Port Authority, which has been criticized for lavish pay and benefits. With extensive overtime, some toll collectors make more than $100,000, while salaries for several officers working at the bridge topped $200,000 last year.

Curious to see what would happen, Mr. Topyan [an economist who's been observing the practice] recently picked up two passengers in plain sight of a police officer—and was promptly ticketed. Having researched the law, he spent six hours in traffic court and won his case. “The prosecutor was jumping up and down in disbelief,” he says. He didn’t have to pay.
Even so, the report notes that the police still show up. Even if there's nothing illegal happening, just having the police show up -- and having people think that there might be something wrong -- causes people to worry about taking part.

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]]> sad http://www.techdirt.com/comment_rss.php?sid=20120620/04285719400