* From a December 30th Wall Street Journal article on a Parisian tussle over the ride-sharing service Uber…
Paris has been a fertile ground for the new app-based car-service companies, with more than more than 12,000 vehicles now available—compared with nearly zero in 2010. It is one of Uber’s two biggest markets outside the U.S., alongside London. Revenue at Chauffeur-Prive.com is growing 10% week to week, its founder says.
In response, French taxi companies lobbied heavily for new rules, saying that they had been put at a disadvantage since rules created in 2009 allowed a new class of cars to take reservations, but not street hails, with fewer certification requirements.
Taxi drivers say that the new online services, in which a taxi can be ordered via an app and arrive at your GPS coordinates at a prearranged price within five minutes, effectively compete for passengers who would otherwise be hailing taxis. Drivers and taxi companies buy expensive licenses for exclusive rights to offer street-hail trips.
* I was in Paris just days after that article appeared. We stayed at a little, out of the way (read: relatively inexpensive) hotel. No taxis milling about anywhere. Not close to a train.
I was told that a taxi reservation would cost me 5 Euros on top of the normal fare. The wait could be up to an hour.
So, for the first time ever, I tried Uber. It worked great from my hotel (we cabbed everywhere else) and, when you included that taxi reservation fee, it was about the same price as a cab. It was also quicker than ordering a taxi, even with Paris’ goofy regulation requiring at least a 15-minute wait before Uber could pick me up (if I was staying at a 4 or 5-star hotel, however, the mandatory wait would’ve been waived).
Taxi companies everywhere are fighting back against Uber. Some Parisian cab drivers even went on strike over the issue.
Uber isn’t for everyone or for every situation. Some of its “surge pricing” could be seen as downright scandalous. They charge what the market will bear, and that means an Uber “black car” ride from the United Center to the Loop can cost more than a hundred bucks after a game or concert.
* What we don’t want to do with regulation is to be worse than Paris. A new bill (HB 4075) seems to provide some reasonable requirements, but would step on some Uber business practices as well. From a press release…
House Bill 4075, named the Ridesharing Arrangements and Consumer Protection Act, would require commercial ridesharing companies to have adequate insurance, contract with drivers who are appropriately licensed, use vehicles that are inspected for safety and serve customers with disabilities and in underserved communities.
The statewide standards in House Bill 4075 also:
· Close the insurance gap, requiring $500,000 combined commercial liability insurance;
· Require chauffer licenses for all drivers;
· Eliminate the use of waivers of liability by rideshare companies;
· Require vehicle safety standards, including regular inspections;
· Limit hours drivers can be on the road with a maximum 10 hour driving shift in a 24 hour period;
· Prohibit price gouging;
· Require accessible vehicles for passengers with disabilities;
· Require compliance with local service standards, including service to low-income communities;
· Require vehicle marking and clear posting of a phone number for customer complaints;
· Allow communities to establish and enforce stricter oversight over rideshare companies, but not to ignore the statewide regulatory threshold established by the General Assembly
Requiring vehicle marking seems silly to me. And allowing cities to go all Paris on these companies at willl probably isn’t a great idea, either.
* Let’s go back to the press release…
The Illinois General Assembly passed the Ridesharing Arrangements Act in 1983 to permit carpooling and other similar activities. The legislation was narrowly crafted to prohibit alternative taxi services or “jitney cabs” from operating in the state. Despite the narrow allowance for for-profit ridesharing activities other than those specified in the Ridesharing Arrangements Act, UberX, Lyft and Sidecar have been openly operating in the City of Chicago and the city’s affluent suburbs without abiding by any regulations.
Pretty harsh tone, no?
And think about this for a second: Illinois had to actually change a law to permit carpooling in 1983?
* And, from the bill, this is a bit silly…
No person participating in a commercial ridesharing arrangement shall collect, and dispatchers shall not charge, any fare that is more than the highest per-mile rate charged by taxicabs within the unit of local government where the commercial ridesharing arrangement is conducted.
If people are willing to pay more and are told in advance of the rate, what’s the problem?
Why is everybody always so afraid of “the new”?
* This company is very aggressive and has fought on several fronts…
“What we did in Chicago, what we do in all these cities, is reach out to all of our users and say, take action–email your councilperson; email the mayor,” Kalanick says. “Uber riders are the most affluent, influential people in their cities. When we get to a critical mass, it becomes impossible to shut us down.”
Denver is a more recent test of the playbook. In January, Colorado’s Public Utilities Commission proposed rules under which the company could be classified as a motor carrier–meaning it would be treated like a taxi company. This issue is at the core of many of Uber’s regulatory challenges. That’s because, city by city and state by state, transportation companies of all sorts–cab, sedan, limo–are heavily regulated in terms of the insurance they carry, the structure of their fares, the background screening of their drivers, and the condition of their vehicles.
Uber neither owns vehicles nor employs drivers; it makes the technology that connects a user to a driver, one who is ostensibly already abiding by all these local regulations. As Kalanick often says, “They need to decide whether we are Orbitz or American Airlines.”
To be classified as a transportation company would amputate from Uber the exact things that make it an exceptionally good business: its ability to scale fast, control how a rider pays, and not be bogged down by owning vehicles.
The future is here. Let’s not blow it.
*** UPDATE *** From ride-sharing company Lyft…
After weeks of working diligently with Mayor Emanuel, we have made significant progress on a proposed city ordinance that prioritizes public safety while protecting innovation. HB 4075 is a backdoor attempt by state legislators to undermine all the work that’s already been done to reach a solution on this issue, and ultimately kill peer-to-peer transportation. HB 4075 would effectively shut down new transportation options in Illinois and eliminate consumer choice for residents who depend on safe and affordable transportation alternatives like Lyft. While safety is often brought up as a reason to apply an old regulatory model to an innovative transportation solution, the truth is that new technology provides an opportunity to increase safety above and beyond what has been done previously, which is why Lyft’s safety criteria are far more strict than what is required of taxis and limos. These proposed regulations have no bearing on public safety, and the motivation behind their development was planned behind closed doors. We hope that the House Committee will listen to its constituents who want more transportation options and vote against HB 4075.