By Alex Cárdenas
Smart-phones and apps increasingly simplify common daily activities – Uber aims to do nothing different. Uber and other similar apps form a newly defined system of transportation network companies (“TNCs”) that allow passengers to connect with drivers via online platforms in order to request traditional taxi-type transportation service. These tech alternatives to cab and limo services, which are rapidly appearing in many U.S. cities, present state and local governments with new issues of regulation and oversight.
California has taken the lead in welcoming new TNC apps by formally acknowledging their existence, but also by introducing new legislation to regulate the field. In 2013, as a result of a rulemaking process on these unregulated forms of transportation, the California Public Utilities Commission (CPUC) imposed driver licensing requirements, driver background checks, minimum insurance coverage quotas, and strict drug and alcohol policies. Additionally, CPUC imposed a charge of one-third of one percent of total revenue in fees to these new companies.
Unfortunately, even these regulations did nothing to prevent the death of a 6-year-old girl when an Uber driver accidentally struck the girl and her family. The incident sparked entirely new regulatory questions as the family aims to find Uber liable for the driver’s actions. Complicated questions surrounding the specific facts of the case expose just how much more detailed and clearer regulation could help. One of the key issues in that case, for instance, was whether the driver can even be considered a driver, or “employee,” of the Uber start-up, or was just another individual on the road.
As these companies continue to grow, so too will concerns about how much they should be regulated. These concerns go beyond just safety and insurance rules and include whether TNCs must fully submit to the extensive registration and intrusive fare regulations that traditional commercial taxi and limo companies already adhere to. Washington D.C., for example, is currently engaged in a heated debate between the incumbent taxi services and the newcomers. Many legislators vehemently defended traditional taxi services by attempting to pass a minimum fare restriction on Uber rides, which many start-up companies claimed would stifle creativity and innovation. In the end, the measure was not enacted when many of the council members were flooded with thousands of emails against the proposal. Still, these turf wars between innovators and incumbents will continue to rage on in the legislative and regulatory forums of many cities until some uneasy truce can be found.
**For an interesting illustration of this problem and the on-going fight in D.C., check out this 11-minute documentary: http://youtu.be/4U9tMTni9dU
Sources:
Photo Credit: https://pixabay.com/en/taxi-cab-taxicab-taxi-cab-new-york-238478/
http://grist.org/article/uber-complicated-rideshare-legal-battles-heat-up-across-the-country/
http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M077/K112/77112285.PDF
http://www.huffingtonpost.com/2014/03/30/uber-legal-troubles_n_5055847.html
http://www.nytimes.com/2014/01/27/technology/rough-patch-for-uber-services-challenge-to-taxis.html