NYC Taxi And Limo Commission Looks To Regulate All Ride Hailing Services

from the because-that's-how-innovation-works dept

Whatever you might think of Uber in terms of its attitude and practices (and, really, people feel this weird need to rant on about such feelings, but that's unrelated to the point of this post -- so no need to tell everyone), you can't really deny that it has truly revolutionized the way that many people are able to get around in a variety of metropolitan areas. And Uber and its various competitors have done this by building a better system that is much more convenient and easy to use, and actually using much more realistic market forces, rather than doing silly things like artificially limiting the number of taxi medallions to keep taxi services scarce and expensive.

Of course, the old beneficiaries of the system, have hit back any way they can. As we've written repeatedly, various cab companies and bureaucrats seem to go out of their way to attack such ride sharing services. The typical go-to claim from those hating on ride hailing services is that because they're less regulated, they're more subject to fraud and abuse or unsafe driving conditions. There is, however, little evidence to back that up. While there are some anecdotal stories of bad ride hailing drivers, we're already seeing innovative ways to deal with that. For example, in India, Uber recently added an emergency button to its app, which would directly alert police if a rider was in trouble.

In short, what we've seen is that, through innovation, competition and (most importantly) an abundance of information, a better overall result can occur. The reasons for many taxi regulations in the past was because of clear information asymmetry: taxi drivers could (and frequently did) screw over passengers, because there was basically no recourse. There was no way for a rider to know if the driver was safe or not, and (more importantly) no real way for that rider to then warn future passengers. But ride hailing services changed that in a big way by flipping the equation, and allowing a good way to rate drivers and to create incentives for those drivers to do a good job. It's not perfect, but, frankly, my own experience in using Uber and Lyft has been that the overall experience has been much, much better than using a traditional cab.

In New York City -- a place where cabs have long been limited by its famous medallion system -- there's been a struggle to deal with this innovative change. Just last year, we wrote about the Taxi and Limousine Commission declaring Lyft to be illegal. And, a few months ago, a NYC politician proposed a bill that would require the TLC to create its own Uber-like app. Because, apparently, innovation works by having the government mandate another part of the government copy an innovative company?

Either way, the TLC is now looking to go even further, in proposing new rules that say that basically any ride hailing app should be fully regulated by the NYC TLC and including a bunch of conditions that really don't seem necessary. Some of them just seem like relics from a previous era that are there because they were there in the past. It's difficult to see why that makes any sense. And then there are new requirements that also seem bizarre. Like this:
The website and/or smartphone application must provide Passengers, upon request, with an estimate of the total fare, inclusive of all fees and any price multiplier or variable pricing policy in effect, for the ride.
I can see how that would be a nice feature to have, but should it be required by the government? If Uber doesn't provide that and Lyft does, then isn't that just a competitive advantage for Lyft? And, really, do existing taxi systems already do that beyond a driver tossing out a random estimate off the top of his head on how much it will cost to go somewhere?

Then there's something really concerning: buried in the rules is the idea that drivers can only work for one provider at a time. I've seen many drivers that work for both Lyft and Uber (and sometimes others as well). Specifically, the rules have a "one device" rule -- saying drivers can only use a single device at a time, but many drivers that I've seen who work for multiple services have separate devices (and some, like Uber, will offer to rent you a special phone just for being an Uber driver, if you don't want to/can't use your own phone).
A Base Owner must not dispatch a For-Hire Vehicle that is equipped with more than one electronic device in addition to the dispatch equipment required by the Vehicle’s affiliated Base...
Again, I'm sure the TLC would argue that this is for safety reasons. Elsewhere in the document it suggests that by arguing that this single device cannot be handheld:
a For-Hire Vehicle may be equipped with one electronic device that is used to accept dispatches from a Base or FHV Dispatch Application, provided that that the device is mounted in a fixed position and not hand-held and use of the electronic device is limited to either voice or one-touch preprogrammed buttons or keys while the Vehicle is in motion.
And, sure, you can reasonably worry about the driving safety of someone who has multiple such devices, though I've seen plenty of drivers with two or three phones lined up in a way that seems perfectly reasonable.

The more glaring concern here, though, is that such a rule basically locks in the incumbents and harms the upstarts. If a driver can't drive for Uber and a new ride hailing startup, they're likely to just stick with Uber, and the upstarts get cut out. That's a problem. Even if that's not the intention, it's these kinds of regulations that all too often lock things in so that incumbents stay in power, while startups are blocked.

Furthermore, just the idea that any new service in this space has to now go and plead with the TLC to get "licensed" is going to slow and limit the opportunities for new and innovative players in this space. Uber got to where it was by building a useful service, not having to ask local bureaucrats for permission every time. The next generation of companies looking to reinvent the space won't be so lucky -- and that may mean we all suffer.

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  • This comment has been flagged by the community. Click here to show it
    identicon
    Anonymous Coward, 14 May 2015 @ 3:25pm

    Why no amusing anomalies here like this "trip from hell" via Uber?

    http://www.dailymail.co.uk/news/article-3050281/Uber-passenger-s-New-York-car-ride-hell-compounded-s ent-12-000-bill.html

    An Uber customer was hit with a huge $16,000 bill for her 7-mile nightmare journey across New York.

    Jaime Hessel said her driver had been on his phone, cut across lanes, and even driven down a bus lane during the 35 minute 'trip from hell'


    We all know the reason: Masnick LOVES Uber -- which, incidentally, was funded by his precious Google, which directly funds Masnick.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Anonymous Coward, 14 May 2015 @ 3:31pm

      Re: Why no amusing anomalies here like this "trip from hell" via Uber?

      Blue, here blue...

      reply to this | link to this | view in chronology ]

    • icon
      Roger Strong (profile), 14 May 2015 @ 3:52pm

      Re: Why no amusing anomalies here like this "trip from hell" via Uber?

      ATTENTION, ATTENTION
      *troll clean up on aisle 3*
      *troll clean up on aisle 3*

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 May 2015 @ 4:17pm

      Re: Why no amusing anomalies here like this "trip from hell" via Uber?

      An Uber customer was hit with a huge $16,000 bill for her 7-mile nightmare journey across New York.


      Funny how you leave out the part about it being a clerical error, that the charge never actually happened, and that Uber immediately corrected it and even refunded the amount they told her she would have owed. Details.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 May 2015 @ 3:50pm

    " The website and/or smartphone application must provide Passengers, upon request, with an estimate of the total fare, inclusive of all fees and any price multiplier or variable pricing policy in effect, for the ride.

    I can see how that would be a nice feature to have, but should it be required by the government? "

    I for one have no problems with the government requiring a service to give a proper estimate beforehand on how much that service would cost, and to disclose any potentially hidden fees that the service would charge. I would expect no less in pretty much any other industry. I do agree with the rest of the article being unnecessary regulations designed to protect legacy interests, but the government seems to have a legitimate purpose with this particular requirement.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Anonymous Coward, 14 May 2015 @ 3:59pm

      Re:

      Only if they require it from all taxi and limo services as well. Then, what will happen if there is a discrepancy between the estimate and the actual? Will the estimate have to be in writing? That might be a good thing, then the app will have to take into account for appropriate routes, current traffic, accidents, construction, etc. which will also inform an ETA and spit out a piece of paper that the driver will then be (to some degree at least) liable for. Do it right, do it for everybody, and don't take the license fees home with ya, then it might be OK.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 14 May 2015 @ 4:51pm

        Re: Re:

        In New Zealand we sometimes haggle with drivers when we're short of cash. You can always find a cab that will agree to take you to x place for y dollars.

        reply to this | link to this | view in chronology ]

    • icon
      Roger Strong (profile), 14 May 2015 @ 4:08pm

      Re:

      Requiring an estimate is a great idea, but only it also requires accuracy.

      Here in Canada for example moving companies will gladly give out an estimate. But it's common for the final bill to be double or triple the estimate, and they hold your stuff until you pay.

      If they guarantee that the total fare will never be more than the estimate + 50%, you know to always add 50% for a reliable estimate.

      reply to this | link to this | view in chronology ]

  • identicon
    basic school history, just wiki "guilds", 15 May 2015 @ 2:49am

    history does rhime : GUILDS

    since the year 1200 guilds and governments have had an agreement, by which the craftmen charge taxes to their clients and pay a fee to the governments in exchange of monopoly and protection.

    Since today in this case, government is taking the fees but at the same time not eliminating the competition, they are not fulfilling the contract and the taxis are angry.

    If the goverment does not eliminate competition and does not guarantee the monopoly, why would any for hire driver pay for this CRAZY medallion fees?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 May 2015 @ 2:51am

    "The website and/or smartphone application must provide Passengers, upon request, with an estimate of the total fare, inclusive of all fees and any price multiplier or variable pricing policy in effect, for the ride."
    RRRRRRRRight, exactly like the bankers and phone companies do...

    reply to this | link to this | view in chronology ]

  • icon
    toyotabedzrock (profile), 15 May 2015 @ 5:25pm

    In case you didn't notice most eastern cities have too many cars on the road and that is partly why they limit the number of taxis.

    reply to this | link to this | view in chronology ]

  • icon
    Jay (profile), 18 May 2015 @ 4:31pm

    Better system?

    And Uber and its various competitors have done this by building a better system that is much more convenient and easy to use, and actually using much more realistic market forces, rather than doing silly things like artificially limiting the number of taxi medallions to keep taxi services scarce and expensive.

    No they haven't... They've used cheaper labor to gain an advantage over taxi drivers by having cheaper cars and less regulations that could protect people that use the service.

    Taxis have one flat rate for everyone and if we're getting into "market forces," that begs the questions of when the price could fluctuate. For example, does someone charge more for a ride in the snow? How about rain? This ensures that the richest get a ride which may lead to actual discrimination in the market place as Uber caters to certain clientele in times of need. For a taxi, I doubt that people have to deal with such things as everything is presented right up front.

    Can it be better? Sure. I believe Wisconsin is working on a co-op model and there are others that merge the concerns of taxi drivers without Uber trying to muscle them out and undo the various regulations coming from when taxis were the new entrant into the market place and were undoing someone else (like iunno... Horse and buggy?).

    For example, in India, Uber recently added an emergency button to its app, which would directly alert police if a rider was in trouble.

    How does an emergency button fix the problem when taxis would have the name and address of a person?

    I can see how that would be a nice feature to have, but should it be required by the government? If Uber doesn't provide that and Lyft does, then isn't that just a competitive advantage for Lyft? And, really, do existing taxi systems already do that beyond a driver tossing out a random estimate off the top of his head on how much it will cost to go somewhere?

    That's a rather poor argument. You see the fare on the machine in a taxi. And requiring both companies to have a safety regulation such as the price on fare ensures no exploitation occurs. So I don't see a reason why both companies can't have such a thing. Unless they're trying to skimp out on something else to make money (ie a hussle) they should be fine with the market being regulated and safer for patrons.

    Then there's something really concerning: buried in the rules is the idea that drivers can only work for one provider at a time. I've seen many drivers that work for both Lyft and Uber (and sometimes others as well). Specifically, the rules have a "one device" rule -- saying drivers can only use a single device at a time, but many drivers that I've seen who work for multiple services have separate devices (and some, like Uber, will offer to rent you a special phone just for being an Uber driver, if you don't want to/can't use your own phone).

    If people are working multiple jobs, they should raise their wages, particularly when people are using their own cars to provide for their "employers" who are being cheap in the name of profit.

    reply to this | link to this | view in chronology ]

  • identicon
    SS, 22 May 2015 @ 7:11am

    Uber vs. Incumbents

    First, I understand your belief in the free market and the power of technology. But my main issue with your blog piece is that you essentially claim that the "incumbents" don't like it because it is upsetting the apple cart. This is not true. The incumbent car services have been playing by the rules for 30 years and Uber comes to the City, exploits loopholes in the law, operates illegally and in a manner that is deceptive to the public and you believe that the NYC Taxi and Limousine Commission should do nothing. I am not referring to the taxis as they are a different beast, but legitimate community car services in NYC (mostly minority owned small business) are hurting and Uber is just another "big box retailer" that will come in and destroy jobs, long established business that serve communities and even did so when it was unpopular and dangerous to do so. Uber is a welcome addition to the flock, but Uber on masse, as it is now, is disruptive of the for hire vehicle industry and will eventually erode the character of the communities that are served by the local car services. Ask Chicago residents what happened when Wl-Mart came in?

    reply to this | link to this | view in chronology ]

  • identicon
    limous denton party, 30 Jul 2015 @ 3:23am

    limous bus party

    Then there is one thing extremely concerning: buried within the rules is that the concept that drivers will solely work for one supplier at a time. ou see the fare on the machine in an exceedingly taxi. And requiring each corporations to own a security regulation like the worth on fare ensures no exploitation happens.

    reply to this | link to this | view in chronology ]


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