Uber's Most Important Innovation: Highlighting Totally Bogus Local Restrictions

(Mis)Uses of Technology

from the keep-it-up dept

It’s baaaaaaack. Despite a 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.

Filed Under: local rules, regulations, sedans, taxis, washington dc
Companies: uber