Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Tuesday, November 06, 2012

Uber, taxi regulation, UPS and FedEx and the unlevel playing field

In some of the discussions ("Cheh would limit regulation for Uber and taxi apps" from Greater Greater Washington) that have arisen over the Uber car service ("Uber Closes Yellow Taxi Cab Service In New York City" from Forbes), especially in view of pro-Uber legislation before the DC City Council, I am troubled by at least four things.

1.  Uber and pro-sharing forces claim that regulating such services somehow is a destruction of all that is good from the use of shared resources. See "Now New York City is giving Uber a hard time" from the Washington Post and "Will Regulations Kill The Sharing Economy?" from TechCrunch.

Uber is a mobile-app based car service that claims it is an application of the principle of collaborative consumption (see the excellent book What's Mine is Yours: The Rise of Collaborative Consumption).

Carsharing or car sharing (in the UK known as car clubs) is a model of car rental where people rent cars for short periods of time, often by the hour. They are attractive to customers who make only occasional use of a vehicle, as well as others who would like occasional access to a vehicle of a different type than they use day-to-day.

Typically, users are "members" of such services, each car supports the use by multiple households, thereby supporting car-lite living, and reducing the demand for car storage in the public space, and encouraging sustainable transportation practices.

Uber is not carsharing.

Uber is a system that allows greater utilization of "car service" vehicles by providing an application so that they can operate as reservation-based taxi-like services some of the time, when they aren't already booked.

The Uber app provides a way to monetize slack resources, and often, provides better service than what taxis normally provide, for a higher price, but the provision of the service doesn't necessarily contribute to broader sustainable transportation goals and objectives, just as High Occupancy Toll lanes may encourage single occupancy vehicle use rather than discourage it.  (See the Resources for the Future Paper Are HOT Lanes a Hot Deal? The Potential Consequences of Converting HOV to HOT Lanes in Virginia.)

2.  So of course it bothers me that services such as Uber are being promoted without adequate consideration of the transportation planning implications of the service.

3.  As importantly, Uber wants the benefits of being able to sell its services, such as selling services on an auction basis (e.g., "Surge Pricing: One NYC Uber User Paid $219 For 7-Mile Ride" from the Gothamist) with none of the requirements that must normally be met by transportation services acting as common carriers, including a standard and public pricing system and provision of service to all potential users without discrimination.

Definition of common carrier from the Free Dictionary:

An individual or business that advertises to the public that it is available for hire to transport people or property in exchange for a fee.

A common carrier is legally bound to carry all passengers or freight as long as there is enough space, the fee is paid, and no reasonable grounds to refuse to do so exist. A common carrier that unjustifiably refuses to carry a particular person or cargo may be sued for damages.

The states regulate common carriers engaged in business within their borders. When interstate or foreign transportation is involved, the federal government, by virtue of the Commerce Clause of the Constitution, regulates the activities of such carriers. A common carrier may establish reasonable regulations for the efficient operation and maintenance of its business.

4.  Uber is seeking through legislation the creation of an uneven playing field.  Claiming the need for such a system "to support innovation and creativity" is subterfuge.

It occurs to me that the desire of Uber to be treated differently from taxi services is no different than the competitive advantages that FedEx enjoys over UPS because FedEx is regulated as an airline while UPS is regulated as a common carrier and therefore subject to the requirements of the National Labor Relations Act.  Therefore, UPS workers are represented by unions and FedEx's aren't, giving FedEx various cost advantages over UPS.  See "FedEx and UPS Clash Over Legislation" from the Wall Street Journal.

Interestingly, UPS's campaign for the two companies to be treated equally under the same set of regulatory rules is not seen as a question of fairness, but as one of unfairness (e.g., "A Special Delivery for UPS That Could Change FedEx Overnight" from the Heritage Foundation) no doubt because FedEx spreads a lot of funding around and conservative organizations don't want to be seen as helping foster union membership.
That being said, plenty needs to be done to improve taxi services and their competitiveness and availability.  Uber is not it.  (Just like the creation of charter schools doesn't necessarily improve the provision of education in traditional public schools.)

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At 1:23 PM, Anonymous charlie said...

as I've been suggesting on GGW, I think Uber is more a stealth project by right wingers to attack regulation than an actual business.

Do you know anyone who really uses it? $30 for cab rides seems insane.

At 1:50 PM, Blogger Richard Layman said...

I agree. I hate to sound like a Marxist, but I can't think of a better example of pushing a "neoliberal" agenda and project than Uber (or charter schools).

At 5:17 PM, Anonymous PhilGP said...

First two responses are ill-informed. I've ridden Uber 70 times and paid $30 three of those trips. Prices often match those of taxis, assuming i pay a taxi driver 15% tip, which i do.

The original poster is unclear about what he finds wrong with Uber. Perhaps he should focus on what's best for the consumer and the tax payer rather than worry about abstractions. He cites education as an example of how not to fix problems. I didn't realize that education was fixed in Washington, DC. Rather than create scenarios why not just listen to the people who use the service.

I've attempted to use DC taxis for the past 30 years. I really don't care about the cars or drivers, i just want a ride when i need one. Getting a taxi by phone is impossible in DC, especially east of Rock Creek Park. Uber's been there every time i've needed a ride.

At 5:35 PM, Blogger Richard Layman said...

So it's a taxi service. Regulate it like one.

At 5:48 PM, Anonymous H Street LL said...

Excellent, excellent post. You articulated many of the feelings I've had about the issue (and done it much, much better).

I have a friend who frequently uses Uber, and it works well for her. I am happy for that. Why they think they shouldn't be subject to any regulation for their business, though, I just can't wrap my head around.

At 6:28 PM, Anonymous Alex B. said...

No, Uber is not a taxi service. Uber is a dispatched service. And of all the complaints about DC cabs, the fact that dispatch services range between unreliable and nonexistent is where Uber makes their hay.

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At 7:04 AM, Blogger Richard Layman said...

Alex B. you make a good point about dispatch service. It should be called an exclusive dispatched service. Traditional taxi service can be either.

The hole in the market is that few DC-based taxi services have decided to make dispatch service a reliable and key aspect of their service.

The "high quality car service" aspect of Uber is something different.

Anyway, there is no reason that a dispatch service shouldn't be regulated no differently than taxis.

And I just don't understand why (1) taxis aren't regulated better (e.g., like Arlington) in DC and (2) why taxi companies don't try to do a better job.

... except that part of the problem is minimal barriers to entry which means there are too many providers and not enough revenue.

At 7:12 AM, Anonymous charlie said...

Just allow Arlington taxi companies to operate in DC. They can already can do service, and would have little problem serving DC west of Rock Creek.

And let's be honest, you're not going to get a taxi on big holidays.

At 10:06 AM, Blogger Richard Layman said...

When we have to go to the airport early in the morning, we always call/or actually do an online reservation for Red Top... I am a DC chauvinist, but I was driven to this by bad experiences relying on DC-based taxi service.

At 7:58 PM, Anonymous Anonymous said...

Richard, I'm impressed by your second comment. I've felt so all alone about Uber being the service for the 1 %. It's so blatant, it's not funny. Why does no one get this, I kept thinking? Uber uber uber. What a ripoff. And Cheh is completely captured.

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At 12:39 AM, Blogger jowdjbrown said...

Typically, users are "members" of such services, each car supports the use by multiple households, thereby supporting car-lite living, and reducing the demand for car storage in the public space, and encouraging sustainable transportation

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