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.

Sunday, February 02, 2014

App based ride services and creative destruction and plain old destruction

I've argued before that e-commerce ride service applications like Uber aren't some revolutionary business, but (1) a better version of taxi dispatch service and (2) but also a form of premium taxi service, (3) in a service system that hadn't offered a form of premium taxi service before.

Uber has argued, successfully in some cases, that they are so revolutionary that they shouldn't be regulated like a traditional taxi service, while I argue that the e-commerce enabled platform doesn't justify an exception from this form of dispatch service being treated as a "common carrier" with all the regulatory requirements that are designed to protect the public interest.

This law review note, "Is a Taxicab Company a Common Carrier?," University of Pennsylvania Law Review and American Law Register , Vol. 66, No. 1/2 (Dec., 1917) , pp. 71-73, almost 100 years old, summarizes the basic definition.  Interestingly, the article discusses a case where the courts ruled a taxi company wasn't a common carrier, and therefore not liable for the impact of an accident which injured a passenger.  That wouldn't be how it would be ruled today.

This is the last paragraph of the note:
Both on principle and by analogy to hack and transfer companies, taxicab companies operating from stands on the street or otherwise holding themselves out to serve the public should be held to be common carriers in all instances.

Common carrier law is definitely the issue in a lawsuit against the company in San Francisco, where a family was hit by an Uber-related vehicle driven by someone paying more attention to his smartphone for fares and not the street.  One person died.  See "Uber faces lawsuit over girl's death in S.F." from the San Francisco Chronicle.

Uber claims that they aren't a taxi service, and that drivers are independent contractors and they shouldn't be liable. Plus if a driver is "waiting" for Uber fares but not actually engaged in a trip, the company claims that means that Uber isn't responsible for the actions of the driver anyway. 

I don't see how that will hold up.

2.  Separately, in "App-based ride services lure drivers from S.F. cab companies," the San Francisco Chronicle reports that SF cab companies are losing drivers to dispatch services like Uber. 

I had speculated ("Misunderstanding Uber, Taxi regulation and what we might call the 'Overground Economy'") that this will end up reducing the overall level of taxi service available in a community--not that there aren't problems with taxi service as it is currently provided.  Seems like this is beginning to happen. 

3.  I will say that I do find the idea of creating premium taxi services interesting, as well as a tariff schedule of higher pricing justifiable.  I don't think that Uber's surge pricing model is fully justifiable.

4.  One advantage of Uber type services is that they are more likely to be willing to pick up fares in areas of the city that are underserved.  But there is no guarantee.  So dealing with providing access to taxi service in underserved areas is something that still needs to be addressed.

Uber is for the well-off and/or smartphone-enabled, it's not about access and equity.

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7 Comments:

At 9:50 AM, Anonymous charlie said...

I saw an intersting analysis that uber makes 100% of its profit on "surging" and runs at a loss all other times.

It clearly a play to create a moat. Taxi companies are weak and bad. Kill them, then raise prices. Nothing to do with being affluent and/or smartphone enabled.

 
At 12:27 PM, Anonymous Richard Layman said...

That's pretty damning if true...

 
At 12:59 PM, Anonymous charlie said...

And to push back futher on your "Equality" and/or "equity" -- not sure which you mean -- the real problem (in DC) is we structure our taxi industry as a type of poor subsidy. No surprise that gives an entry point to someone looking for better service.

Bus lines are another example.

The classic case is London, where they structure taxis for the rich, subways for the poor. We just do it a little different (taxi for poor, subways for federal workers, buses for poor) here.

It isn't just the price, but the service, which need to be part of the discussion on parking.

 
At 2:38 PM, Anonymous Richard Layman said...

While I am not sure with you that I agree with you exactly, I would term it differently. That the nature of the "service" has been focused on bare bones, not quality, but not so much because of enabling lower income people to use it. The big thing for years was the zone system enabled people in the core, especially those using the Capitol, to get around comparatively cheaply.

2. But the fact that there is no medallion system means that the barriers to entry are few (car, insurance, etc.) and for people with limited work options (immigrants especially) they will gravitate to taxi service regardless of the overall demand.

So supply is too great relative to demand, and that's why service and quality have suffered, creating a "hole in the market" for a premium service.

For many, Red Top filled that hole for some time, but now e-commerce enables many more potential providers and options.

As we know, nothing prevented a DC-based service from functioning like Red Top in terms of reliability and the use of online booking.

 
At 2:39 PM, Anonymous Richard Layman said...

what do you mean in your comment about parking?

 
At 7:07 PM, Anonymous charlie said...

disuccsion of parking isn't about pricing, it is about delivering better parking. likewise, the best frame for taxi regs is delivering a better experience.

New regs have done part of that, but as you said the barrriers to entry ensure a junky car. It isn't just the fares that can be regulated.

 
At 9:36 AM, Blogger Richard Layman said...

yes: the best frame for taxi regs is delivering a better experience.

And that's not how regulation is set up for the most part.

It's why I said we needed "a plan" before just moving willy nilly forward on taxi change.

Sure some of the changes that City Council mandated were long overdue, but these ideas of creating premium services, supporting jitneys or other types of services in underserved areas, etc., were not discussed.

Obviously, Uber is really/merely a form of premium taxi service. I have no problem with that nor with their operating. Just that it should be regulated and on a tariff schedule (which probably means no such thing as "surge" pricing or at least not to the extent that they do it).

 

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