Atlanta introduces bill to regulate Uber and Lyft(clatl.com)
clatl.com
Atlanta introduces bill to regulate Uber and Lyft
http://clatl.com/freshloaf/archives/2014/02/05/the-gold-dome-bill-to-regulate-uber-and-lyft-has-been-introduced-and-its-a-doozy
5 comments
This highlights the fact that Uber and Lyft are not disrupting so much as exploiting regulatory arbitrage. That is, for all intents and purposes they are taxis, but they are attempting to ignore licensing, regulatory and fee requirements
Yes, but the taxi companies aren't arguing that their regulations should be relaxed. They are arguing that they should apply to more people -- especially these new services like Uber that are doing well.
Regulation of industry creates government jobs. The governing body will not relinquish its regulatory capacity without a fight. The taxis are more likely to get Uber regulated then they are to get themselves deregulated. Rememebr that the government is itself an interested party. It isn't Uber Vs. Taxis. Its a triangle.
Agreed, but they also should make us examine the regulation of taxi services more skeptically.
Yes. They've helped us find that: no, once we have a reputation economy, we don't need the government to tell us who we can safely get in a car with.
And as Yelp, eBay, and other reputation sites have shown us, it turns out that reputation economies are useless once everyone rates every transaction/buyer/seller 5 stars.
You've never filtered for the bad reviews? Also, is it possible that you're only seeing the uninteresting storm of 5-stars because the "interesting" merchants don't survive? (I honestly have no idea if this is the case.)
Exactly. Now that we can make informed decision, we can excise the social/financial cost of regulation and its administration, in exchange for accepting the risk (of making our own informed decision).
I'm a progressive liberal fwiw, not a libertarian.
I'm a progressive liberal fwiw, not a libertarian.
But "reputation economy" means someone gets to be the guinea pig.
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I don't know -- that seems naive. This is not a new story.
From the Wikipedia entry on Guilds: As Ogilvie (2004) shows, the guilds negatively affected quality, skills, and innovation. Through what economists now call "rent-seeking" they imposed deadweight losses on the economy. Ogilvie says they generated no demonstrable positive externalities and notes that industry began to flourish only after the guilds faded away. Guilds persisted over the centuries because they redistributed resources to politically powerful merchants. On the other hand, Ogilvie agrees, guilds created "social capital" of shared norms, common information, mutual sanctions, and collective political action. This social capital benefited guild members, even as it hurt outsiders.
The heyday of guilds lasted from around 1200 to 1700...
From the Wikipedia entry on Guilds: As Ogilvie (2004) shows, the guilds negatively affected quality, skills, and innovation. Through what economists now call "rent-seeking" they imposed deadweight losses on the economy. Ogilvie says they generated no demonstrable positive externalities and notes that industry began to flourish only after the guilds faded away. Guilds persisted over the centuries because they redistributed resources to politically powerful merchants. On the other hand, Ogilvie agrees, guilds created "social capital" of shared norms, common information, mutual sanctions, and collective political action. This social capital benefited guild members, even as it hurt outsiders.
The heyday of guilds lasted from around 1200 to 1700...
well ask yourself this, how many jobs and services performed by people should require the permission of a governing agency? Far too many such agencies only exist now to restrict competition. Heaven forbid you try to get into the taxi business, or worse the moving business.
As in, where does it stop or where do we begin? Florist? Movers? Hairstylist? Nail care? Plumber?
As in, where does it stop or where do we begin? Florist? Movers? Hairstylist? Nail care? Plumber?
How about you argue the issue at hand on its own merits instead of introducing red herrings? Taxis aren't like nail care. In many cities, particularly Atlanta, they serve as an important extension of the public transportation network, and are core to tourism and commerce. Heck, taxis are the reason why bars in the city, most of which are accessible only by car, can even pretend that they don't cater mostly to people who drink then drive.
Taxi services aren't regulated for the sake of limiting competition. They are given a monopoly in return for agreeing to be regulated as quasi-extensions of cities' transportation infrastructures.
Taxi services aren't regulated for the sake of limiting competition. They are given a monopoly in return for agreeing to be regulated as quasi-extensions of cities' transportation infrastructures.
While the regulations were at one time created to keep shady players out of the industry, Taxi services nowdays are most certainly regulated for the sake of limiting competition. Consider that in Manhattan in the 1950s there were roughly 13,000 taxi medallions. Today there are still only 13,000 medallions available- they sell at auction for a million dollars a piece.
The Taxi companies that own these medallions have gone to court many times to enforce the artificial scarcity that drives up the value of their golden geese.
A taxi driver in NYC has to pay $80,000 a year over and above his insurance and operating costs just for the right to operate a cab: that money goes straight into the pockets of medallion owners who don't much of anything except own medallions- until a threat like Uber comes along, wherein it's time to deliver brown paper bags filled with bundles of unmarked bills until the problem is solved. Both the drivers and the consumers are getting shafted.
NY is an extreme example, but the taxi industry works more or less same way in pretty much every city in the western world. It's not uncommon for incumbent businesses to hijack goodwill regulations as a way to stifle legitimate competition.
Now Uber and app-based livery services do need to be regulated- but their service is a whole different paradigm from the traditional taxi industry. In California progressive legislation has been passed that places these services in a completely different category than tradition taxi companies, much to the dismay of those taxi companies.
Uber is also expanding aggressively- their revenue has grown 20% per month over the past couple years, they started with 15 cars in 2009 and they are now valued at nearly 4 billion dollars, and operate in 60 countries. Every city they go into, they go into expecting a fight. They win some and they lose some. They were shut down in both Toronto and Vancouver. Uber is a fascinating company to watch- it's trench warfare everywhere they go- and they have mountains of venture capital backing them.
The Taxi companies that own these medallions have gone to court many times to enforce the artificial scarcity that drives up the value of their golden geese.
A taxi driver in NYC has to pay $80,000 a year over and above his insurance and operating costs just for the right to operate a cab: that money goes straight into the pockets of medallion owners who don't much of anything except own medallions- until a threat like Uber comes along, wherein it's time to deliver brown paper bags filled with bundles of unmarked bills until the problem is solved. Both the drivers and the consumers are getting shafted.
NY is an extreme example, but the taxi industry works more or less same way in pretty much every city in the western world. It's not uncommon for incumbent businesses to hijack goodwill regulations as a way to stifle legitimate competition.
Now Uber and app-based livery services do need to be regulated- but their service is a whole different paradigm from the traditional taxi industry. In California progressive legislation has been passed that places these services in a completely different category than tradition taxi companies, much to the dismay of those taxi companies.
Uber is also expanding aggressively- their revenue has grown 20% per month over the past couple years, they started with 15 cars in 2009 and they are now valued at nearly 4 billion dollars, and operate in 60 countries. Every city they go into, they go into expecting a fight. They win some and they lose some. They were shut down in both Toronto and Vancouver. Uber is a fascinating company to watch- it's trench warfare everywhere they go- and they have mountains of venture capital backing them.
New York medallion owners are definitely milking the value of their monopoly, but it's really hard to make the consumers are getting shafted argument when Uber is much more expensive than traditional cabs.
The solution for Uber and the like isn't progressive regulation that puts them in a different category. Uber walks like a cab service and quacks like one, the only difference is a more modern method of hailing. Cities should deregulate their cab systems to increase supply, but categorize services like Uber within the same cab regime.
Also: the population of Manhattan is 25% smaller today than it was in 1950, so that means more medallions per person. Also, it has probably a lot more private cars.
The solution for Uber and the like isn't progressive regulation that puts them in a different category. Uber walks like a cab service and quacks like one, the only difference is a more modern method of hailing. Cities should deregulate their cab systems to increase supply, but categorize services like Uber within the same cab regime.
Also: the population of Manhattan is 25% smaller today than it was in 1950, so that means more medallions per person. Also, it has probably a lot more private cars.
Counterpart: Live in a jurisdiction which does not regulate any of the above and you'll quickly realize why all Western countries do so.
It's not about restricting competition, it's about very real concerns that are addressed by specific licensing regimes for each such industry. Tort law and market competition are useless, alone or together, in regulating low-entry-cost industries with high potential externalities. Licensing imposes capital requirements which make tort law and market competition feasible, along with guaranteeing certain other benefits to customers that increase the potential market of the industry.
It's not about restricting competition, it's about very real concerns that are addressed by specific licensing regimes for each such industry. Tort law and market competition are useless, alone or together, in regulating low-entry-cost industries with high potential externalities. Licensing imposes capital requirements which make tort law and market competition feasible, along with guaranteeing certain other benefits to customers that increase the potential market of the industry.
All of the companies you listed already have licensing requirements.
I am not sure this legislation is terrible. Requiring GPS billing be certified, drivers be insured, drivers be licensed, and some of the other general consumer protections seem pretty sensible. I also did not see anything in the legislation that related to minimum rates as the article implied.
It actually does seem like a decent first draft.
It actually does seem like a decent first draft.
The disallowing internet apps seems dumb. Seriously, if I could flag a regular cab with a general purpose app that would be about 95% of the value of Uber to me.
I'm sort of baffled why someone like Yellow Cab doesn't just put out an app.
I'm sort of baffled why someone like Yellow Cab doesn't just put out an app.
The use of Internet or cellular telephone software to calculate rates shall not be permitted unless such software complies with and conforms to the weights and measures standards.
Not disallowed just have to show your app is measuring properly.
Not disallowed just have to show your app is measuring properly.
Or just have the driver type in the fare manually from their meter?
At least here in Columbus, Yellow Cab does have an app for that: https://itunes.apple.com/us/app/id628065359?mt=8 or https://play.google.com/store/apps/details?id=com.apcurium.M...
With all the crazy laws surrounding taxis and liveries, I wouldn't be surprised if an app like that is illegal in some municipalities.
With all the crazy laws surrounding taxis and liveries, I wouldn't be surprised if an app like that is illegal in some municipalities.
It doesn't matter if it is an app or a phone call there is a culture in the Taxi industry of just ignoring calls for a pick-up in certain areas that they view negatively. Uber and Lyft don't discriminate like that.
You've obviously never tried to hail an Uber from a dodgy neighborhood in Boston then. It takes me twice as long to get picked up where I live, versus my girlfriend, and I generally have to go through a driver switch or two.
Well yeah it takes a little longer because drivers aren't going to hang out in that neighborhood. You do eventually get picked up though. My experience in Baltimore with taxis is that no amount of calling will get them to come to a part of town they don't like. Nothing is going to change the fact that it is a crappy part of town but the difference between no pick-up ever and pick-up with a small glitch is huge for a lot of people living around those areas.
Is a Uber or Lyft driver required to accept any pick-up?
No, but, they track acceptance % by drivers so a driver that is screening locations like that will put themselves at risk of being kicked off Uber. The expectation is that the acceptance % is very high and that once a fare is accepted it is 100% carried out. Also when they display a potential fare to a driver they only show an estimate of how far away it is in minutes and a very zoomed in map of the location so it is hard to even know where you are going to be headed exactly before you accept.
There is one: https://www.hailocab.com
That's pretty much what Hailo is. It's not yet as widespread as Uber though.
Introducing some consumer protection measures back into the Uber model may make sense, depending on how it is done. Writing into the law that the only way to ever provide any taxi service ever is exactly and only the exact way it is done today, by what today is de facto a cartel, does not make sense. Since this law is doing a bit of both, it's hard to give a snap summary of goodness or badness, but on the whole, I'd rather do nothing and wait a bit more for real problems to arise before I write into the legal code the impossibility of ever again innovating in the field of taxi-like transportation. (Especially with driverless cars metaphorically just around the corner. Whatever regulation may be desirable there, nobody's currently in a position to write it.)
It is not clear to me that Uber is a huge problem for anybody but an industry being disrupted yet, and that is not only not a crime, it's a feature of the system. (Feel free to correct me in replies, if you like; this is not a permanent state of mind. It really is not clear to me right now that Uber is a significant danger to anyone but existing taxi companies. I've heard a couple of anecdotes, but so far the taxi industry is well able to keep up with "anecdotes" of how they do bad things too, so calling it a "wash" would probably be doing the current incumbents a pretty big favor....)
It is not clear to me that Uber is a huge problem for anybody but an industry being disrupted yet, and that is not only not a crime, it's a feature of the system. (Feel free to correct me in replies, if you like; this is not a permanent state of mind. It really is not clear to me right now that Uber is a significant danger to anyone but existing taxi companies. I've heard a couple of anecdotes, but so far the taxi industry is well able to keep up with "anecdotes" of how they do bad things too, so calling it a "wash" would probably be doing the current incumbents a pretty big favor....)
The premise of these companies is essentially that one doesn't need licensing for drivers if the system keeps a reputation history. This bill makes that explicitly illegal. The companies will no longer be able to serve that jurisdiction.
Can you not keep a reputation history for drivers that have a license?
They're not referring to a drivers license here, which would be eminently sane. They're referring to taxi licenses, which are artificially restricted.
40-1-193. (a) No transportation referral service provider subject to this part shall contract with, utilize, or refer individuals or entities to limousine carriers or taxi services that are not properly licensed by the state or a political subdivision of this state, are not properly insured under state or local law, or which use drivers that are not properly licensed under state and local law to carry passengers for hire.
40-1-193. (a) No transportation referral service provider subject to this part shall contract with, utilize, or refer individuals or entities to limousine carriers or taxi services that are not properly licensed by the state or a political subdivision of this state, are not properly insured under state or local law, or which use drivers that are not properly licensed under state and local law to carry passengers for hire.
And it's worth pointing out that taxi licenses are really an artificial barrier to entry to keep existing taxi services safe. Atlanta's apparently costs a median 36,000, and in big cities like Boston or NYC, they can run into the hundreds of thousands.
These licenses aren't tied to a driver, rather they usually lease them from a managing company. Safety's got nothing to do with it.
(ref http://taxirisk.com/taxicab-facts-for-atlanta-georgia/)
These licenses aren't tied to a driver, rather they usually lease them from a managing company. Safety's got nothing to do with it.
(ref http://taxirisk.com/taxicab-facts-for-atlanta-georgia/)
Is the license the same thing as a medallion?
If they just want to ask someone to pass a test and/or background check, that seems fine. If they refuse to issue one because there is a limit, that works against consumers.
If they just want to ask someone to pass a test and/or background check, that seems fine. If they refuse to issue one because there is a limit, that works against consumers.
Not necessarily. NYC introduced medallions because a glut of taxis we're clogging vital infrastructure and nobody could make a profit, thus safety and maintenance were compromised. Capitalism does not produce the optimal outcome for consumers when externalities are not part of the equation.
At least here in New York, Uber cars are licensed as limos, not taxis. Taxi medallions are often artificially restricted, but I've never heard of limo licenses being capped.
You are correct. It is completely unreasonable to ask Uber to license there drivers like all of the other transportation services.
Exactly. And using unlicensed drivers is not Uber's one advantage over established taxi companies.
I too was surprised at Uber's tone. I mean, requiring commercial drivers to have a commercial insurance policy and ensuring that the measured rates are accurate as measured by a neutral 3rd party are only things that could help differentiate Uber's service. Plus, unless they have posted per-mile or per-hour livery rates, Uber's pitch as a private, centrally dispatched livery/transport service should make their pricing manipulations okay.
I actually almost hope this passes?
I actually almost hope this passes?
Uber always sends you an exact map of your route. You can verify the billing yourself or prove to a third party that the billing is miscalculated.
I'm with you on insurance and licensing, but "certified GPS billing" seems backward. Imagine the app is open source and people are not complaining about suspicious behaviour or billing patterns in the reputation ranking system -- why would this be necessary?
Would you buy gas at a pump that was not certified? Do you check to see if your pump was certified when you get gas? Would the rank and file consumer verify the routing measurements of an app or even know how or have the tools to accurately do so?
Fine by me, Uber is a scam company. Here is an email I got from them today.
Subject (large text): "Explore NJ this weekend with FREE uberX rides"
Body (small text): "NJLOVESuberX covers rides beginning OR ending in New Jersey, up to $20. Believe us – at these rates, $20 will get you far."
Fine print (tiny text): "Please note that there is a $20 surcharge for trips between New Jersey and NYC."
Subject (large text): "Explore NJ this weekend with FREE uberX rides"
Body (small text): "NJLOVESuberX covers rides beginning OR ending in New Jersey, up to $20. Believe us – at these rates, $20 will get you far."
Fine print (tiny text): "Please note that there is a $20 surcharge for trips between New Jersey and NYC."
Atlanta introduces bill to shut down Uber and Lyft is not an appropriate re-titling of this article.
Why not? That's clearly the point, and that's why it's relevant to this community. I suppose it should probably be in the passive voice, but that's a nit.
That's not clearly the point. It may be inferred but it's hardly clear. The 1k license seems a bit excessive but some of the other points, registering, abiding by current mileage standards, having insurance...all seem completely valid and like places Lyft and Uber are taking advantage of missing regulation and, to some extent, rider's ignorance of the situation they are in if there's an accident or some other mishap.
The article does not claim this, and the parts of the bill that the article highlights do not appear to unduly target new services. The only statement claiming that Uber is being targeted is in an included quote from Uber itself. If someone would like to have a title that makes this claim, they can write their own post and submit that.
I think protocol on HN is to use the title associated with the article, not to create your own - even if it seems better.
Hailo takes the strategy of working with existing licensed taxis so presumably they would be ok?