Should we regulate Uber (and other app-based rides)?

New York City has been hailing people through its streets since the 1800’s with horse-drawn carriages. Those carriages evolved into cars, when, by the 1960’s and 70’s, in reaction to high fares and a general unwillingness to provide rides in black neighborhoods, gypsy cabs came on the scene. They were cheap, illegal and unregulated. Cash only. They got shut down by police on a regular basis.

Now we have Uber.

Uber is all about better cars, cheaper fares, and, sometimes, they even talk about servicing minority communities.

They do it with apps and smartphones, online payments and immediate, actionable feedback for drivers. They also do it by moving in, disrupting the old yellow taxi-cab model, and launching a public relations war for change.

New York City is Uber’s biggest U.S. market. So when the city council starts talking about caps and regs, Uber does what it does well: it launches an aggressive campaign to shut it down.

This is an especially important year for Uber.

The company plans to go out for an IPO (initial public offering), so demonstrating growth is important.
An IPO (initial public offering) is when a company sells stock to the public in order to raise a bucket of cash.

And, don’t forget the impact of NYC regs on other cities: if New York imposes restrictions, then others may do the same.

Is is time to regulate an industry that’s been implicated in suicides?

Uber should not be limited.

race

DeRay Mckesson, leader in the Black Lives Matter movement, talks about the impact of Uber on people of minority populations. “There are countless examples of yellow taxis refusing to pick up people of color. The ride-sharing apps as a whole have changed the landscape of how riders experience—or don’t experience—discrimination,” he says.

Dr. Johnnie M. Green Jr., a pastor in Harlem, told the New York Times, “It’s a racial issue. The people that champion the crusade against Uber do not have a problem hailing yellow cabs.”

we already monitor Uber

New York is unique because Uber drivers are required to get licenses from the Taxi and Limousine Commission. These licenses allow the TLC to monitor ride-hailing services for pricing, routes, shifts and more.

simple economics

The reason we’re in this pickle is because in New York the supply of taxis is far less than the demand for them. Ever hail a taxi near Time Square? Good luck. And forget about it on a rainy or snowy day. If you’re lucky enough to snag one, you’ll want to douse yourself in Purell when you get out.

Competition benefits consumers, and the TLC has prevented competition by controlling the number of medallions issued creating hyper-inflated prices for medallions, which crashed when app-based cars came on the scene.

Uber should be limited.

NYC congestion worsened after Uber and other app-based cars came on the scene

One report states that app services compete with public transit more than cabs. So, while solo ride-hailing services tend to to pull in users that likely would have made their trip in a car–either by driving themselves or using a taxi or livery service–most users of pooled services “switch from non-auto modes,” the report said.

By the numbers: Average speeds during business hours in midtown dropped to about six miles per hour in 2017, which is 15 percent slower than in 2010.

council limitations on Uber are not absolute

Recent regulations allow for new licenses for vehicles that are wheelchair-accessible. And there’s also a stipulation that if a region of the city doesn’t have enough vehicles, the TLC can give out more licenses to help. And, the ban on new app-based car licenses is for one year only. The end of the year will be followed by an evaluation.

six suicides

Taxi medallions are the permits that allow a driver to hail passengers in New York City–at least they were before Uber and Lyft came along. Medallions are purchased for hefty prices, often with loans, and then can be rented, gifted or sold. There is a finite number of medallions, controlled by the Taxi and Limousine Commission.

In 1990, you could purchase a medallion for $150,000. Prices continue to rise as demand for licenses went up, peaking in 2013 at $1.3 million.  Two years later, prices dropped 40%. By 2016, a medallion sold for $250,000. Last year, a medallion went for $100,000.

Other cities have seen similar declines.

Financial ruin has been suggested as the cause of death for six suicides in the last eight months among taxi drivers.

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