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, August 27, 2013

Misunderstanding Uber, Taxi regulation and what we might call the "Overground Economy"

Most of DC's taxi companies haven't been at the forefront of technology adoption and many offer spotty service.

Arlington's Red Top Cab has been far ahead of DC companies in terms of reliable service and use of web-based reservation systems.

And of course, there are the general problems of lack of taxi availability outside of the core of the city.

Which is why if you live outside of the core--taxi service is pretty reliable in the core, street hailing generally works, etc.--if you have to get to the airport, you probably call Red Top, rather than a DC company, because of bad experiences in the past.

So bad-unreliable service on the part of DC taxi companies has created a hole in the market for new services.  (The DC Council has stepped in and passed legislation requiring a variety of improvements and if not improvements, changes, such as requiring all cars to be painted in a common livery scheme.)

 2.  The Post has an editorial, "One too many cabs for DC's Taxi Commission," about the DC Taxi Commission and Uber, and says that the Commission is worthless.  That may be, but the issues are more nuanced than most anybody is capable of "unpacking."

The reason that you regulate taxi services is to protect the common interest, to ensure that companies treat all customers equally, to ensure that the vehicles are operated and maintained properly ("Cabby Had Violations Before Crash in Midtown" from the New York Times), etc.

Like most regulatory functions of government, regulation of transportation services developed in response to bad practices and behaviors on the part of companies providing the services.  A whole area of law developed around these services being deemed "common carriers," providing services to all.

Regulation and the regulatory process is not supposed to be some kind of socialism attempt to control private industry.  It protects the public from transgressions and failures, and to ensure equal treatment of all potential customers.  (Granted, the regulatory process can and is often gamed, and government isn't known for pushing innovation through regulatory processes.)

There are a number of components to providing taxi service:

- having a vehicle if you are an individual or a fleet of vehicles if you are operating a branded taxi service
- getting tested and licensed
- offering taxi dispatch services (calling by whatever means, phone/web/mobile)
- versus "bumping the curb" and relying on street hails
- providing high quality customer service
- providing augmented service (e.g., accepting credit cards, having information screens, video screens, etc., in the cab).

Some of DC's taxi companies are dispatched based, others are not.

Uber, relying on mobile commerce taxi dispatch services, argues that it is a "social economy" or "collaborative consumption" type offering, but it isn't.  It's just a taxi dispatch service.

Using the verve of mobile commerce, it argues it should be regulated differently from taxi services that involve owning vehicles, that somehow using a phone app instead of a phone call to hail a cab means that it should be treated outside of the traditional regulatory system that has developed to oversee taxi service.

There is no compelling argument for why this should be the case. 

3.  The regulatory system should provide:

 for taxi operators
- a testing regime for drivers
- an application and monitoring service over the companies and individuals licensed to offer taxi services
- a system of inspection for vehicles and general operations

for customers
- a system to handle and rectify customer complaints

in general
- a set of customer service standards and metrics
- a benchmarking-research function to ensure that DC taxi services are best-in-class (cf. "Pr. George's cabbies complain about pick-ups at Gaylord National," Post, about how National Harbor is offering its own taxi service because they claim that PG County taxis are substandard)
- a system for ensuring vehicle and service quality (inspections, inspectors, including operation at all times of day and days of the week)
- a system for being able to innovate and offer new services (also see the recent blog entry "Testing changes to zoning with demonstration projects").

On such criteria, it's fair to say that DC's taxi regulation function is flawed.  The function should be subsumed within DC's Department of Transportation.  As I have commented before ("DC and taxis: need for a comprehensive plan"), DC's Transportation Element in the Comprehensive Plan doesn't even mention taxis once.

4.  There should be nothing to prevent the unbundling of taxi dispatch services from the ownership of a taxi service company brand.  Uber could be organized in that manner. But still regulated.

5.  I have been thinking about various mobile applications designed to facilitate ride sharing from individuals instead of using "taxis" or the use of vehicles owned by individuals rather than by car rental or car sharing corporations (either for profit or nonprofit).

I was at some conference some time in the last year, and Robin Chase, founder of Zipcar, discussed the first type of service (her company is called BuzzCar).  Her idea is that this is a way for people to make money from an asset they own that is not being used.  It is a form of collaborative consumption.  But it's not likely to have a massive effect on the market, because most people are more comfortable conducting such transactions through more traditional corporate entities.

Image: Greg Gilbert / The Seattle Times.  Sylvester Bush drives for Lyft, a ride-sharing service that launched in Seattle in April. His vehicle carries a pink mustache, just as vehicles of other Lyft drivers do. 

In other cities, there are the "Moustache Cars," offered by a competitor to BuzzCar, where people actually drive the cars, and do it to make some money on the side.  The service is called Lyft, and it operates in Seattle.  We didn't ride it.

As we were leaving the city, the Seattle Weekly had a cover story on the topic, "The New Fight for Seattle's Fares" (also see "Ride-share cars: illegal, and all over Seattle" from the Seattle Times).

While reading it, I thought of both Robin Chase's speech and seeing the cars, and thinking--but with one big exception--about how it puts into the open what previously might have functioned as part of the underground economy in cities like New York and New Jersey's "dollar vans" ("The (Illegal) Private Bus System That Works," Atlantic Cities; "Ending the Jitney Menace," Newark Star-Ledger) and in low income communities where it is common in areas with poor taxi service for people in a neighborhood to "sell rides" and to operate sort of like taxis.

You could call it a conversion of the taxi element of the Underground Economy to what we might call the Overground Economy, which is taxable.

6.  But there is a big but... it won't effect that part of the market because these vehicles aren't operating in the low income areas that suffer from inadequate public transit and taxi service ("Thompson slams Weiner cab stance," Queens Chronicle; "Court Upholds Mayor Bloomberg's Outer Borough Taxi Plan," Wall Street Journal).   Instead, these "ride sharing" services are operating in high income areas.

And because the motivations for these car owners operating as a sideline using slack resources, they will drive whether or not there is "enough demand" for taxi services.  This is great for consumers probably because it is a constant downward pressure on rates.

(This is a similar side of the problem in DC posed by the fact that immigrants, who often have reduced job opportunities, seek out taxi jobs because there are reduced barriers to entry, which ends up increasing supply of taxis beyond what might normally be equilibrium.  This has negative impact on service.)

But in terms of making taxi operation profitable for individual "hacks" it's not so good, as the SW article discusses.  If you can't make a living at driving a taxi, the quality of the service is likely to decline, just as it has in so many other areas of the economy, as wage growth has been negative.

7.  And Uber, Lyft, and other mobile commerce dispatch services are using a kind of neoliberal commentary about "collaborative consumption" or the "social economy" to obfuscate what is really happening and what is at stake.

Which is a different issue from regulatory authorities and the ability of these entities to support and encourage innovation and service quality, while at the same time protecting the public interest, and working to ensure that the "transportation system" works well overall.

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14 Comments:

At 7:32 PM, Anonymous charlie said...

a few other points:

1. regional interoperations; easiest thing would make it legal for arlington cabs to service in DC.


2. Uber being valued at 3 bllion which tells the play is a national cab company (old yellow cab back again?)

3. Some companies (and people) can't be trusted. Uber falls into that category. I would not be shocked if the recent post of GGW was astroturfing --

 
At 9:15 PM, Blogger Richard Layman said...

as you know, it is legal for out of city cabs to pick up DC fares if the DC rider calls specifically to the out of jurisdiction company, and the company is based in the final destination for the rider.

But it would be interesting for DC and ArCo to do reciprocity.

2. Interesting point about Uber as a company and culture.

The whole mobile commerce thing like with Living Social (it is a direct marketing firm that utilizes the Internet as a channel) means that people interpret businesses as something different than what they are.

E.g., a taxi dispatch service, whether you use an iphone and an app versus and iphone and call or a regular phone and call, is still a taxi dispatch service.

It reminds me of when Mosaic came out and people thought that anything employing "graphics" was in fact "multimedia." One was presented, the other was supposed to be interactive.

 
At 12:17 PM, Anonymous rg said...

I had a horrible experience with Red Top Cab two Saturdays ago. (We went with Red Top after a similar horrible experience with Yellow Cab.) Uber saved the day. My wife and I were headed to visit friends in Montana for a much-anticipated and much-needed vacation. We had a 7:00 am flight out of DCA. Deciding to err on the side of caution, we made a reservation with Red Top Cab for a 5:00 am. pick up. We were on the front porch, ready to go at 4:55. 5:00 comes and goes. No sign of our cab. At 5:10, we start to get nervous. At 5:15 we call Red Top. The woman who answers the phone tells us that she is aware of our reservation but has not yet dispatched a cab and is not sure when she can do so. Our need to catch a flight does not create a sense of urgency for her. It is tough to hail a cab in our neighborhood in the middle of a weekday much less before sunrise on a Saturday morning. So, in desperation, I pulled up the Uber app on my phone and asked for a car. Five minutes later, the car arrived and we thankfully got to DCA in plenty of time for our flight. At around 6:30, as she is headed down the jet way to board our flight, my wife's phone rings. It is Red Top Cab telling her that they have dispatched a cab and it will arrive in 10 minutes. My wife is nicer than I am -- she told them we no longer needed the cab. I would have let them dispatch the cab and let lose time and money waiting in front of our house. Unfair to the driver perhaps, but not an entirely unreasonable thing to do!! I wish I could get away with running my business in such a half-assed and unprofessional manner. I know you are making a comprehensive and nuanced argument about taxi regulation, etc. But at 5:15 am on a Saturday morning, all I cared about was getting to the airport and Uber saved the day. Thankfully, I usually don't take early morning flights and can thus take Metro to DCA. The whole story does bring to mind your previous post re: lack of transit options to DCA at off hours.

 
At 12:43 PM, Blogger Richard Layman said...

1. Fortunately I have never had that problem with Red Top. (And yes, had it with other DC-based services.)

2. I have no problem with taxi dispatch services like Uber. I just think they should be regulated.

3. But again, it's another example of failure even within better than average services.

You lucked out with Uber. It might not have worked otherwise. But it did.

I don't know what I would have done. I am glad you didn't miss your flight.

4. And yes, there should be transit services to the airport for early mornings, at least on the weekends. (I think BART does some special service to SFO in the early hours.)

 
At 6:37 PM, Anonymous rg said...

I agree with you completely re: proper regulation. My experience is just anecdotal. In the end we were saved by good luck.

We went with Red Top because last time I had to go the airport early, for a business trip over a year ago, Yellow Cab pulled a similar stunt. In that case, an early rising neighbor saw me and drove me to the airport. At this point, I do not trust any of the local taxi companies. I guess I am glad that on a day-to-day basis, I do not have much need for taxis.

Building on your previous post about transit to the airport, the employees working the early shift at DCA do not have transit access to the airport, at least on weekends. A lot of the jobs at the airport are service jobs that I would guess do not pay top dollar. DCA is within biking (and even walking) distance of a lot of neighborhoods, but it it might be a good illustration of the burden that mandatory car ownership puts on low- and moderate-income people. (Mandatory insofar as you need a car to access your job.)

 
At 5:14 AM, Blogger Richard Layman said...

WMATA does run a bus, about 3 runs each way, on Saturdays and Sundays, for workers mostly. I've heard that the ridership is particularly low.

It'd be good to see zip code data on where the employees come from and the times their shifts start.

In a thread on GGW, someone mentioned that you could run the 50s bus (which runs on 14th St.) to the Airport.

During the hours that Metrorail runs I would say no.

But maybe on the hour and half hour for a couple hours early in the morning every day and late at night Sunday through Thursday could make some kind of sense.

Alternatively, you could keep the normal 50s service, and then just have a separate bus (50s or not, it could be like the 5A or B30 in terms of numbering) run from McPherson Square Station to the Airport.

P.S. what a great neighbor you have!

P.P.S. I wish Car2Go had parking rights at National Airport!

 
At 10:53 AM, Anonymous rg said...

Yes - Car2Go would be perfect!!

I would be curious to see the zip code data as well. Everyone who works an early morning shift at DCA obviously manages to get there. But I'm sure it is difficult for some of them. I think that a good chunk of the windshield perspective crowd forgets (doesn't care?) that while someone like me who lives car-free might be an eccentric or quirky source of humor or disdain, owning a car is often a huge financial burden for working class people.

 
At 11:35 AM, Anonymous charlie said...

More on Uber being evil:

http://gigaom.com/2013/08/28/uber-faces-new-legal-pressure-over-skimming-50-of-drivers-tips/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+OmMalik+%28GigaOM%3A+Tech%29

Car2Go would be nice, but a struggle to get a decent sized piece of luggage there. It also wouldn't be cheap -- more than $15?

Best way to get to national is go to crystal city and walk...

 
At 12:09 PM, Blogger Richard Layman said...

true about car2go and luggage. It is do-able but it's hard.

the first time we opened the hatch, I had to call for help, because I wasn't able to figure out the four step process...

 
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