lyft-pinkI like and respect Greg Gottesman. But his recent GeekWire post about the upstart, out-of-state taxi companies — Hey, Seattle, why stop with ride-sharing? Cap these 10 other innovations while you’re at it— is way off base.

First, the idea that these taxi companies are some amazing innovation has no basis in fact. Sure, they’ve built an app. But everything else about them mirrors the companies they say they’re re-inventing.

Since there are already multiple apps for existing taxi companies, even their one claim to being a tech company isn’t an innovation! As has been stated amply elsewhere, their real innovation is in avoiding regulation and taxation.

Many people seem to think it’s all about protectionism, and, sure, that’s what existing taxi companies want. But it is a false dichotomy to say that you are either in favor of these new companies or you are being protectionist. I could care less about the existing taxi companies. I care about safety and equity.

If these uninspected and uninsured taxis are on the street, pedestrians are not protected. We know from experience in San Francisco, where a 6-year-old child died, that drivers’ personal insurance does not apply when they are driving for hire and these companies will claim they have no responsibility. The baby steps they’ve taken toward better insurance still fall far short of the legal requirements.

The Seattle city council has just given these previously illegal companies a huge gift — they’ve made them legal for now, at least in Seattle. The council should have banned them outright until they were willing to follow the laws on licensing, inspections, and insurance. I don’t see any excuse for them to be allowed to skirt the laws. They should be thankful that they even have a chance here.

Greg gave ten examples of misguided protectionism. Let’s look at some better, more accurate scenarios.

USPS photo
USPS photo

1. The USPS is old school. A new mailsharing startup has built an app to help deliver mail more efficiently. Since mailboxes are inconveniently located on the right side of streets, their drivers will drive on the wrong side of the road, but, clearly, those regulations shouldn’t apply since they built an app.

2. Petroleum companies are old school. A new fuelsharing startup has a system that allows anybody to put a gas station in their front yard, and they’ve built an app to help you find convenient gas 24/7. Think of the convenience! Of course, these fuelsharing houses shouldn’t have to follow regulations about installation, safety, pollution, gas taxes, and price gouging.

3. Microsoft is old school. A new software sharing startup has built an app that lets you get any other app you want, for free, including all those Microsoft apps. Laws about intellectual property, software piracy, etc., don’t apply to them because they built an app.

Image via Shutterstock
Photo via Shutterstock

4. Hotels are old school. A new roomsharing startup lets anybody rent their rooms to anybody, with no concern for neighbors, local regulations, safety, inspections, etc. And, unfortunately, as we’ve seen recently, no concern for the owners or renters either.

5. PC hardware manufacturers are old school. A new chipsharing startup has built an app that lets people configure their own computer and get it delivered the next day. Since they built an app, they don’t need to follow regulations about manufacturing, electrical systems safety, pollution, etc.

6. Hospitals are old school. A new healthsharing startup allows anybody to be a doctor for anyone else. You don’t even need to go to med school to treat patients! Because they built an app, they and their “doctors” don’t need to abide by any laws about practicing medicine without a license.

7. Schools are old school. A new teachsharing startup allows anybody to get a high school or college degree in minutes. They built an app!

cellphones-shutterstock_123704239
Photo via Shutterstock

8. Cellular companies are old school. A new airsharing startup has built an app that lets users use relatively unused bands for better signals. They happen to be police and fire bands but they aren’t used much and the interference shouldn’t be too bad. Since they’ve built an app, they can use whatever wavelengths they want without having to follow any laws.

9. Amazon is old school, already. A new stuffsharing startup has built an app that lets you choose from items in Amazon’s warehouse and get it for a price lower than Amazon’s price. Their costs are really low because laws which might prevent them from raiding Amazon’s warehouses in the middle of the night don’t apply to them.

10. Movie theaters are old school. In fact, the whole movie industry is old school. A new moviesharing startup makes all movies available for free. In some places, they’ll even sneak you in the backdoor of a real theater and get you popcorn for free as part of the package. After all, laws about intellectual property, breaking and entering, trespassing, and even petty theft don’t apply to them — hey, they built an app!

Roy Leban is founder and CTO of Puzzazz, a puzzle technology company based in the Seattle area. The opinions expressed here are his own. 

Comments

  • http://twitter.com/chrisamccoy Chris McCoy

    Appreciate the effort but meh. Out of touch.

    Greg’s piece earlier was brilliant, correct, and perhaps a top 3 all-time post on GW.

    This comes via a friend but I’m 100% on board:
    I propose the following principle for guiding the inevitable flood of legislative innovation to come: protect societal value, not jobs. Taxi drivers are not valuable, a society’s ability to move around in urban environments is. Newspapers and journalists are not valuable. Exposes of inconvenient truths being hidden from the public are. Publishers are not valuable, a literate population with ever increasing access to variety/quality/selection mechanisms for getting to knowledge is.

    • Mike

      I disagree with everything you said. This is spot on. Taxi drivers are valuable, they’re regulated and held responsible for their actions, something which no ride share driver is, right now. True journalists are valuable, Edward R. Murrow is rolling in his grave at your comment. Crappy couch warrior ‘journalists’ have brought us garbage reporting and the rise of the Tea party and Fox News (cable, it’s not quite the same as broadcast). Literacy is not something we get from reading posts with LOL and ROFLMAO.

      • http://twitter.com/chrisamccoy Chris McCoy

        Journalism is based on access to primary sources. You either have it or you don’t. If you don’t then you’re likely a blogger.

        Now that sources are going direct, the best of journalists will rise to become the best analysts.

        Just wait until access to primary sources gets decentralized…

        In the meantime, embrace the change.

        Many great things to be built on top.

        • Steve Cook

          There’s not a clearing house for primary sources, Chris. You get access to sources through these skills called “reporting,” “asking the right questions,” and “critical thinking.” Some journalists have it, some don’t. Publishers and editors are there for a reason, and that’s to provide some framework for accurate and insightful reporting, as well as also providing the protection from the powerful who’d use their resources to squelch the truth. The blogosphere just doesn’t have the same model. Unfortunately, people will realize the value of a journalistic establishment far too late to do anything to recover.

          • http://twitter.com/chrisamccoy Chris McCoy

            You’re missing it Steve.

            Access to primary sources has already been disrupted via social platforms like FB, Twitter, Instagram, Linkedin, etc.

            Next evolution is full-on decentralization where the sources are paid to cover themselves.

            It’s coming.

            Can change everything we know about journalism, news, reporting, etc.

          • Steve Cook

            “Next evolution is full-on decentralization where the sources are paid to cover themselves.”

            That’s a joke, right?

            The role of the press in society is to provide for an informed electorate, and in the words of Finley Peter Dunn, to “comfort the afflicted, and afflict the comfortable.” If primary sources are allowed to say whatever, without question or analysis, then good effin’ luck with whatever world that ends up looking like.

            There’s a role for the press, and even more so in the future. Those, like yourself, who fail to see the value in having an independent method of verifying the facts and calling into question the statements and actions of the powers that be, will get the dystopia your deserve.

          • http://twitter.com/chrisamccoy Chris McCoy

            Per my original comments: “now that sources are going direct, the best of journalists will rise to become the best analysts.”

            Digging deeper into interview quotes, traversing the network to find even more sources for better coverage etc. will be how the best journalists succeed.

            The best in class journalism will rise to the top. Instead of 20 beats covering the same topic/industry, we’ll have 3-5. We’ll still have traditional coverage and journalism, but a lot more analysis. We’re already seeing this in tech.

            Distribution has already been unbundled (=the market).

            Next will be access to primary sources (=my points). Anyone will have it. Can change everything about journalism.

            More news will be created by more people and the best will rise to the top. Distribution cartels won’t/don’t control what we see anymore.

            Train has left the station.

      • http://seattleactivist.org Bryce Shonka

        You got that one backwards. Taxi drivers drive unsafely with no consequences, throw people out of their cars for not having cash and one even professed his undying love to my date once. Uber drivers are the best I’ve ever seen, in all respects. There was one ride where an Uber X driver got lost- the company refunded the ride and apologized without being asked. Cab drivers in Seattle have a monopoly since there haven’t been any new cab licenses granted in 23 years. You seem like a bitter Prog who worships the state and every decision elected officials make, just sayin.

  • Robin

    get a life man. It was not worth a separate post, could be just another comment at original post. Could come up with something more creative than that in order to get a piece of publicity.

    • J Epping

      How about making a point or an actual argument instead of issuing a lazy and empty dismissal?

      I think the post is spot on though a bit overdone. It is annoying that critical thinking, regulatory fairness and consumer protection go out the window when a tech startup is involved. If his post initiates some actual critical thinking on this matter, then I say great.

      that being said, market disruption is important but regulatory fairness and perhaps reconsideration is a good idea in this case. Maybe fewer regulation is in order, maybe just fairness.

  • Mike

    I LOL’d

  • Freedomrings

    Nice try, Roy, but swing and a miss. Couldn’t even follow your points. Greg’s list was genius and apparently you’ve never take an Uber or a Lyft. Once you do, you will never choose a cab over the alternative. Cabs suck plain and simple, Lyft and Uber are both a great experience. Maybe you should try it. Or maybe you’ll just never get it.

    • Bart C

      It’s not because they offer a great experience (I’m a huge user and fan of Uber and Lyft as well) that they don’t have to follow regulations…

    • Joe

      Who cares that when the inevitable accident happens, your driver has no means to cover your medical costs? As long as the experience is great, the hospital visit and bills are totally worth it.

  • http://www.tonywright.com/ Tony Wright

    Regarding licensing and inspection– How do we benefit from anything beyond standard drivers licenses and inspections? Or put another way– these ridesharing folks have been operating without commercial licenses and inspections for years now. Can you list any citizens that have been negatively impacted due to this (other than folks in the taxi business)? Note: I’m NOT talking about insurance here.

    I don’t think any pro-ride sharing people are against insurance. I think people would’ve been supportive of the council if they said, “let’s turn them loose, but let’s require that they have commercial insurance”.

    Lastly, I don’t think you understand innovation if you don’t think this stuff is innovative. People’s lives (on the driver side and rider side) are meaningfully improved due to these companies, whose innovation spans technology, design, marketing, and business model innovation.

    All that aside, why argue against a series of straw men instead of the crux of his post? Greg’s article (and most people’s ire) is directed at the cap.

    I agree that they are skirting the law– now that we’ve seen that this stuff works and results in safer and happier citizens, let’s fix things rather than force innovative companies to adapt to outdated laws and regulations.

    • krisdahl

      You’ve hit on on the head. The real question is what good are those regulations? Clearly they aren’t necessary.

    • ssxsolstice

      In response to your query about citizens that have been negatively impacted: http://valleywag.gawker.com/when-your-smartphone-chauffeur-becomes-a-stalker-801080008

      So I wouldn’t claim that this stuff results in everyone being safer and happier just yet. There needs to be more oversight, and someone/thing taking responsibility for when things go wrong other than “Well, you shouldn’t have gotten in that car with a stranger.” This is one reason why business licenses exist; to protect the consumer. This is one reason why I don’t feel safe getting a rideshare alone.

      TL;DR Yes, let us fix things and keep people safe, by improving outdated laws and regulations.

      • http://www.tonywright.com/ Tony Wright

        I’d be interested in data on this front– for every anecdote about a creepy lyft driver, I can give you 10 on taxi drivers. If you polled riders on happiness/safety issues, how do you think taxis would fare compared to ridesharing?

        What I want to know is: are taxi riders statistically safer and happier due to licensing and inspections when compared to ridesharing drivers, now that we have a few years of unregulated data? Aside from insurance, I’d be willing to bet that they are not. My guess is that the transparency on pricing and the ratings on drivers (and the services themselves) protects the consumers more than bureaucracy-heavy licensing/inspections.

        • ssxsolstice

          Right, but when a licensed taxi driver assaults me, I have legal recourse. That’s the point I’m making (unsuccessfully, it would seem); not how much/many people suck, but whether or not there’s something I can DO if someone sucking affects me negatively.

          • http://www.tonywright.com/ Tony Wright

            Still not sure if I’m understanding– apologies if I’m missing something. If they do something criminal (assault), you have recourse no matter who it is– call the police. You have a verified photo and name of the driver automagically with ridesharing. Taxis are harder. Do you remember the cab #? Name of driver? Maybe you forgot to remember that in the heat of the moment. If they do something annoying-rude-awful-but-not-strictly-illegal, what’s your recourse? With ridesharing, I can 1-star them (uber drivers get punted if they can’t maintain a 4.5 average). It takes me 2 minutes and makes a difference. With taxis, I’m sure I could call the company and maybe some regulatory body, if I wanted to invest a bunch of my time with limited certainty of results.

          • ssxsolstice

            Taxi drivers in Seattle are finger printed and required to obtain a business license, which stays on the record. When I have a problem with a taxi I can go to the taxi company itself, or the City of Seattle Consumer Affairs Unit, which has specific guidelines for how taxis are regulated and penalized. I think you might be assuming that taxi drivers own their own cabs (correct me if I’m wrong), but many, many of them don’t. They rent, or are just hired as drivers, and as such taxi companies can be held liable for the negligent actions of their drivers.
            Rideshares don’t claim responsibility or liability for anything that happens because they don’t “identify as a Transportation Carrier”, they declare themselves exempt from all the regulations we have in place, pass off the sole liability to their drivers, and I honestly think that’s just unsafe for both the driver and the passengers. They provide the platform for communication and so they’ve escaped every regulation we have in place to protect passengers and transportation

  • Not Greg

    Hey Roy, have you actually ever used One of the ride share companies? Ever? Honest? Your examples are mostly ridiculous.

    If you had you’d understand how amazingly convenient they are. That’s the innovation, the convenience. Innovation doesn’t always have to be cold fusion, sometimes it is something simple.

    If you have been in a taxi the last 50 years you’d also know that they tend to be dirty, the drivers yammer on their cell phones the entire ride, hard to call, etc. That’s partly because it is the government that controls the market, not the individual. In Uber’s case, and I assume the others, if a driver, who is rated by a customer (and not the government) doesn’t maintain a high enough rating he can’t drive for Uber anymore. That’s also an innovation and again, very simple.

    I could go on but I doubt it matters to you. Btw, we had a gas pump at our house when I was a kid. I’m guessing you were a city boy. Country people had unregulated gas pumps at their houses for tractors and such. And you frequently shared with your neighbors.

    • Joe

      Greg didn’t deny how awesome the ride share apps/companies/service is, he just said that they need to also follow the same rules and regulations (the stuff that makes it so when an accident happens, that company can foot your medical bills) that are already in place.

  • http://2barSpirits.com/ Nathan Kaiser

    Roy – Couldn’t disagree more. A few points in regards to this whole “controversy:”
    1. Placing arbitrary caps on anything is counter productive. It upsets both sides and doesn’t let the market work out the supply-and-demand curve
    2. Saying this serves Seattle is simply untrue. More services, with greater customer satisfaction serves the people of Seattle, this option simply doesn’t
    3. We need more innovation, not less. We can’t protect old-school services because they were here first
    4. Each of the businesses you listed usurped previous services and we are all better off because of it
    5. You have to be licensed and insured to legally drive, what changes between driving yourself to having a passenger (whether the passenger is your friend or someone you are driving for Uber or any of the other services)?

    – Nathan Kaiser

    • Bart C

      If they wanted to avoid caps, then they should’ve brought up hard facts, numbers just like Car2Go did. Instead they played the public opinion to avoid any caps at all, which back-lashed as we all know by now… By providing factual data (number of subscribers, number of drivers) the caps would’ve been more reasonable.

      • http://2barSpirits.com/ Nathan Kaiser

        Should every innovator have to justify themselves to the gov’t and the competition? Your approach seems similar to the laws on the books that require potential movers to prove to other moving companies that there is enough need in the marketplace… Needless to say, the competition doesn’t agree.

        My approach is simple and time tested. Let the market work it out.

        • Bart C

          No, they shouldn’t have to justify themselves in an ideal world. But this is not an ideal world, so you have to deal with the reality of things. The reality is, their strategy didn’t work. The strategy of facts might have worked better. They’re are a business, and businesses shouldn’t fight for principles but for results.

    • Nick

      Point 5 is the problem here. What changes is that normal everyday driver’s insurance doesn’t cover for-hire situations. There’s no way to know if your ride-share driver has adequate insurance coverage. You’re currently gambling by getting in an ride-share car. This is the only part that I think -needs- regulation.

      Passengers for these services shouldn’t have to wonder what happens if they’re injured in an accident, and drivers shouldn’t have to worry that they’ll go bankrupt in the event that they do get in an accident and a passenger sues them.

  • Justin

    I’m not sure anyone in the city was opposed to holding ride-sharing companies to the same insurance standards as taxis/limos. That’s a reasonable piece of regulation that serves the public good. Artificially capping the number of drivers allowed via government fiat serves the pockets of the taxi companies, not the public.

  • SaraJ

    Your points don’t relate, sorry. Honestly I don’t have the energy to countepoint each one, but quickly: Charter schools. People didn’t like the way public schools were being run, so they started their own system – exactly what Uber is. And secondly, you CAN rent a room or an apartment to anyone for any price you want – several people do this without a lease. Obviously the renter has protection (watch an episode of Judge Judy), but maybe that’s the point – the CONSUMER can choose this, if they want to.
    You can’t cut them off for no reason – it’s really not better for the public at large when they demand better services.

    • lolz

      How many charter schools are there in Washington state? Zero right now. Why’s that? They were *illegal* previously. First ones are set to open this fall. Law may not be convenient, but as John Adams put it, we are a nation of laws, not men.
      http://seattletimes.com/html/education/2022798320_charterschools31xml.html

      • SaraJ

        Highline School District just announced that there are plans for some right in our area. As you said. So it is happening. Just like Uber and other companies that can do it better than Yellow Cab.

  • http://www.puzzazz.com/ Roy Leban

    I don’t have time to respond to everything, but I’ll make a few comments.

    The Seattle City Council didn’t restrict these taxi companies from coming into our market. Quite the contrary — they raised the cap from zero to 150 per company, they didn’t impose any penalties for operating illegally, and, for now, they are not insisting they follow the same rules as other taxi companies. They should be happy!

    Sorry if the list of 10 business areas isn’t exciting or relevant enough. Blame Greg :) I just took his list and gave scenarios that illustrated why it’s not ok to break the law just because you built an app.

    You CAN’T just rent a room or apartment without following the law with regard to rentals, safety, non-discrimination, and even, in some areas of the country, pricing. There are laws to protect both landlords and renters.

    Those who know me know that I am far from anti-innovation and I think new companies can and should innovate and disrupt existing markets. My own startup, Puzzazz, is doing exactly that in the puzzle space. I just believe in operating legally, ethically, and honestly, and not trying to skirt laws to get unfair advantages.

    Sure, there’s room for innovation. And maybe these companies are actually innovating (though I don’t see how they’re innovating beyond what other companies are doing). But, if what these companies are doing is truly innovative, they should be able to do it while following all of the existing regulations in every city the operate in. If they can’t do that — if they can only succeed by cutting the costs of following existing laws — then their business model is fatally flawed.

    • Paubl

      Though an analogy could be drawn to Amazon, one of our local success stories. A notable part of there success could be attributed to working loopholes/undefined laws allowing them to skirting taxes, something local companies couldn’t do. So they had (and in many places still have) a ‘unfair’ advantage over local businesses. Like Uber/Lyft it wasn’t just a price advantage, it was giving customers a notably better experience while leveraging those advantages. Lots of companies have suffered and gone out of business with the new model that they and local legacy legislation couldn’t keep up with. Taxi service is similar in that disruptive approach, that skirts the cost issues others have, forcing some change in the market that is arguably very much needed and net positive. Regulation should scramble to catch up vs. trying to nurtured the disruption before it can have the necessary disruption.

    • Slaggggg

      You are easily the Troll of the Year

  • Kary

    Thank you for this counter-piece. The ignorance people had about the existing system for some reason doesn’t stop them from commenting about changes to the system. The change from 600 for-hire vehicles to 1250 is huge, but people still complain about the limits! And they think that just because there’s an app involved, that it’s somehow different–a point you make very well.

  • http://lianza.org/ Tom Lianza

    There was a time when we shut down music sharing sites to address rampant copyright law violations. But, eventually Bittorrent was born, and there’s no one left to shut down unless you go after each person.

    If someone were to release an app tomorrow that’s just an app – a bittorrent equivalent of ridesharing – that takes no money and offers no service other than an app – what then? What to do with 5,000 one-person-companies on the road, with one driver each? Why wouldn’t we come up with legislation that actually makes sense for what is a very foreseeable future?

    Uber and Lyft could be your iTunes, not your Napster.

  • Brian Barrick

    It is protectionism. Whenever a company/companies establish a foothold in an industry they often push for regulation, licensing and taxes to protect themselves. Insurance in many cases is a scam, that’s what the court system should be doing. Determine what happened, and make those at fault pay. Texas has a talk show host on the weekends who talks about home improvements. He does foundation repair and openly advocates that his industry needs tougher regulation and licensing. Hmm…I’m sure he’s honest and sincere in wanting to protect the people but come on at what point are we going to realize that people need to be held responsible for their own choices. The only play government should have here is as I said before, when someone get’s hurt they make sure the responsible party pays for it. I wish people would take a long look at government(state, local, and federal) and realize it is just as prone to corruption and can often bring even more disastrous results.

    • ian

      The issue is that people often can cause more harm than they can afford to pay for, or exaggerate their competency. Our economy is built on specialization and not needing to know everything, ideally regulation ensures basic competence and damage protection. People need the abstracted stamp of competence that being licensed/regulated provides. That doesn’t mean the Government has to provide that abstraction, but even when private industry create the standards they look to entrench it by pushing the government to make it a law.

  • Mark Illing

    Thanks Roy, I didn’t know how to respond to Greg’s article as it was so obnoxious.

    I think what many people are seeing as innovation is really just novelty. The new ride share companies are new and novel, and the app for calling them is innovative. But the innovation stops at the convenience of calling the cab.

    I know, the new ride share services are innovative because they are cleaner. Sorry, the new ride share services are cleaner because the service providers are new. Wait 5 years until the realities of how difficult it is to keep newer, cleaner cars on the road for the price being paid. Believe me, I want to be proved wrong, but I think the realities of this type of service won’t be seen for a few years.

    I don’t know the logic behind the caps, and in ignorance, will agree that it would be great to lift them. I can speculate that the reason for the limits may no longer be relevant, but then the argument should be to change the regulations, not to flaunt them. Why does a taxi medallion cost so much – because of the limits on the number of medallions. Why the limits? Possibly to keep enough customers to support the number of taxis. Possibly because there are few places for cabs to sit and wait for customers and they will become a nuisance on the streets otherwise.

    My point is that ignoring regulation is not innovative and I agree with Roy that the city council did the ride share companies a favor of ignoring their illegal behavior. The only reason I feel bad for the taxi drivers is that the value of their medallions has taken a sudden hit and they were playing by the rules. I’m not saying the rules shouldn’t change, but they should change in a structured manner, which I think is occurring through the city council.

  • krisdahl

    As much as the incumbents would like to frame it this way, this really isn’t about safety. If it was about safety, we’d be looking at accident per mile data, and insurance claims and safety records in the taxicab industry as a benchmark. Anecdotally at least, taxi cabs seem to get into a lot of accidents for ‘professional drivers’. You ever been in one that isn’t covered in dents and scrapes? Other fleet vehicles driven by professional drivers, like delivery trucks, big rigs, and indeed Uber, UberX, Lyft, somehow manage to not run into everything.

  • Velogiraptor

    I like the effort, but it misses the point of the original article. You’ve created a false dichotomy of all-or-nothing on regulation, as well as ignored the innovation on the payment end of Lyft and Uber. I get in a cab, at some point I have to pay and tip. I’m going to have to deal with that at my destination, and I could be really very drunk; making it an ordeal.

    Let’s take your mail example:
    It’s more accurate to say that nobody has a problem with forcing the new delivery system to comply with all the rules of the road. What people have a problem with is an artificial cap on how many houses are allowed to receive mail in one day. The delivery system can otherwise comply with all FAA requirements, DOT requirements, and other state and federal regulations. Imagine if FedEx and UPS were only allowed to deliver mail to 150 houses per day?

    On the insurance side:
    It’s disingenuous to point to the tragic death of the child by an Uber driver earlier in the year given that the response to this was for Uber and Lyft to specifically improve their insurance coverage (voluntarily even) to cover this if it were to happen again in the future. This kind of oversight could have occurred in a regulatory scheme as well. I don’t hear anyone railing against a requirement to that effect either. Only the cap. Moreover, every car is inspected for safety and follows federal and state safety regulations. It’s not like these Lyft drivers are motoring around town in home-built go-karts. It is fundamentally dishonest to say that those cars don’t have to comply with safety regulations, or else nobody should ever ride as a passenger in any motor vehicle anywhere.

    People need to get around. Some startups have found a way to do it with less overhead and a better customer experience. So what if they have to register and pay the fee a taxi would? That’s still nothing compared to buying a fleet of cars, which they don’t have to do. There should have been a removal of the cap on taxis, and a level playing field on all insurance and safety requirements.

  • Andrew Royal

    Both this article and Greg’s used hyperbole to make their point and offer a perspective. I like Uber and use it a lot, but it and all the others need to play by the rules. Before Uber I used Taxi Magic. Worked the same. Was that less innovative? Just wasn’t as new a car that picked me up. Why does Yellow Cab have to play by one set of rules while Uber/Lyft can play by a different set?

    I think the #2 example is a good one. In that case, people can clearly see that should probably be regulated. In the case of getting a convenient ride in a car, I think the issues around safety and regulation are perhaps less clear and merely get in the way of that convenience. I know wanting this industry regulated puts me on the far left of the socialist libertarian spectrum in this debate. But I can live with that.

    If Uber is so much better than Yellow Cab then, in a fair and equal playing field, Uber (or whoever) will win.

  • http://www.jayweeldreyer.com/ Jay Weeldreyer

    Roy, pull your head out of your arse! I’m dumbstruck that you’d seriously put out an article suggesting that these companies simply compete on regulatory arbitrage at the expense of public safety. The “Sharing Economy” is about connecting the owners and would-be users of otherwise idle assets, to the massive benefit of society and likely the planet.

  • Dave McLauchlan

    Let’s imagine a scenario where the city took the completely opposite (but potentially just as valid) approach:

    1) Limits on taxi medallions were removed
    2) Insurance requirements were set that were consistent across taxi and TNC vendors
    3) Taxi companies were required to have an app that allowed passengers to rate their experience, and were required to fire the bottom X% of rated drivers per quarter
    4) Taxi operators were required to maintain their vehicles to the same standards as the TNCs

    And so on… Now, in such a scenario, the market would decide the “winners”. I posit that after some time, market forces would yield a “balance” between taxi companies and TNCs. Taxi service would probably improve, the number of medallions would stabilize at some given number and likewise the number of TNCs on the road.

    We’ve already proven (insurance aside), that the TNC model works and works really, really well. The mistake the city is making is not applying those lessons to a broken model (the current taxi product in-market). The city should not be in the business of fixing broken business models – don’t get me wrong – but aside from ensuring public safety is being maintained, why not let the market solve this problem as it will inevitably do?

    If the steps above were adopted by the city, there would be substantial disruption in the taxi industry, but we’d reach a new equilibrium soon enough, and one that would serve the public interest better than this new model. That they’ve driven such disruption is why Uber, Lyft, etc… are innovative – not because they use an app to hail a ride. Innovation is being stymied here, and that is the real shame of this Seattle City Council decision.

    • halebr

      This.

    • rick gregory

      That (minus #3) is precisely what we should do. The only regulation that needs to be done is to protect a) passengers and b) people involved in an incident with a vehicle. I’d much rather see taxi regulations loosened and everyone on the same playing field. If the taxis want to compete on things like ‘we offer consistent pricing vs surge pricing’ and Uber or Lyft want to bring other advantages, everyone should go for it.

      Kudos for a reasonable post that doesn’t demonize any one or mindlessly chant “innovation!!! innovation” as if anything with an app is instantly innovative. I agree that Uber and Lyft are innovating on service delivery but they’ve also had advantages by being unregulated. Do the regulation needed for public safety and leave it at that.

  • gregpiper

    These are idiotic comparisons.

  • Jim Price

    They didn’t just “build an app”. What about variable pricing (which ensures that cars will be available even when it is a busy night)? What about real-time navigation that shows you where your ride is? What about individual ratings of drivers and customers?

    I am not regulated by the city, but I have managed not to run down six year olds on purpose, and I keep my car clean and well maintained. Uber’s rating system will quickly weed out bad/corrupt drivers, while the many protections afforded taxi drivers give them little incentive to improve.

    Your childlike faith in the power of regulation to protect us is adorable, but it is not supported by the evidence. This is a clear case of regulatory capture (Google it). The solution is to reduce restrictions on existing cab companies, not to allow them to hide behind corrupt politicians whenever a better idea comes along.

    • ClaimsAdjuster

      Why don’t you google “regulatory arbitrage”?

  • http://seattleactivist.org Bryce Shonka

    You totally miss the innovative part of Uber- community based regulation. Every passenger and every driver carry ratings that reward positive behavior and remove problematic behavior from the system. It’s way more than an app- it’s a community. Bad drivers get removed, better for passengers than Taxi drivers with almost zero accountability. There is an incentive in the Uber model that simply doesn’t exist for taxis. You are missing the most important aspect of that which you are writing about…obviously if you think Flywheel makes cabs equivalent to Uber.

  • Dave

    We all need to play by the same rules. Innovation raises the bar for taxi companies while adequate safety and insurance standards raises the bar for TNC vendors. Let the customers decide the winners and losers and not some legislator’s “horse and buggy whip” protectionist legislation.

  • ClaimsAdjuster

    Taxis are public utilities with regulated rates. During the California power crisis of 2001-2002, the regulated electrical utilities were also chucked aside for “free market” power producers. What we got were blackouts and brownouts along the entire west coast as power producers and brokers such as Enron were free to express unchecked capitalism’s pirate heart. The only lights that were left on in California were in LA where the municipally owned electrical utility was exempt from the state’s stupid electrical deregulation law.

    The chaos came to a sudden end when the Federal Energy Regulatory Commission finally capped interstate electrical rates.

    Once UberX and clones put taxis out of business, as it well underway in San Francisco where 4,000 TNCs are flooding the downtown on weekends, they will be able to charge whatever they want.

    Wheelchair vans? A thing of the past. Properly insured for hire vehicles? Fuhgetaboutit! Transportation for those without smart phones or credit cards?
    Nah.

    But what you will get is more surge pricing such as Uber’s $415 bill to Jessica Seinfeld for taking her kids a few miles in a snow storm..

  • http://Facebook.com/justus.aguy Just Aguy

    #UberFraud @chi1cabby
    Uber insists it’s “a marketplace” rather than a taxi company. Okay! I’ll take that at face value. So then they’d be bound to not manipulate the market, engage in price fixing and consumer fraud, right? Well I have documented in exhaustive detail how Uber engages in all these anticompetitive and illegal activities. Please have a look for yourself at facebook.com/justus.aguy

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