Welcome to the new world of ridesharing and regulations (or lack thereof)

OlympianApril 6, 2014 

Hey, I need a ride to the airport. I’ll even pay you for the gas and your time. Any takers?

If this transaction were to be completed by relying on a friend or relation, it would be one of thousands (all right, we’re guessing here) of such transportation arrangements completed every day, with the world taking little notice.

If a more formal but just as traditional transportation mode were used to get from Point A to Destination B, such as taxi or bus, that too would be of little cause for comment — provided that the ride was on time and reasonably safe and comfortable.

If, however, you used a smartphone app to connect with a driver, but who is not officially licensed as a taxi company, you are now a part of the future of personal transportation options, a high-tech, high-flexibility approach to curing the drawbacks and deficiencies of those traditional modes, especially taxis. Either that, or you’re spending your money on a rogue operator willfully ignoring rules and regulations others have to play by.

Congratulations. You’re not just getting a ride, you’re getting a front-row (or maybe it’s backseat) view of a huge fight over issues of competition and regulation that is well along in Seattle but is now emerging here as well.

Welcome, Tacoma, to the world of ridesharing.

The three ridesharing companies now doing battle with regulators and the cab companies in Seattle – Uber, Lyft and Sidecar – have all launched service in Tacoma.

What they bring with them is not only their service but a debate over whether a rideshare driver is really just a taxi operating under an assumed name and without the bothersome paperwork and fees, or truly a different form of transportation — and what role government has, if any, in deciding which is which.

Taxi companies and drivers claim the former, arguing that the high-tech pretentions assumed by the rideshare companies are merely a dodge for an uncompetitive advantage in avoiding the inspection, insurance and licensing requirements the cabbies have to comply with.

The ridesharing operators — an alternative name they sometimes use is “transportation network company” — counter that the innovation is in providing fast, direct connections between customers and drivers for timely, reliable and comfortable rides.

In a typically Seattle approach, the City Council managed to come up with a “solution” that didn’t really solve or resolve much of anything. It placed a cap on the number of cars each of the services can have on the road at any one time. The rideshare companies claim not to like this because of the limit, and because they don’t feel it’s any of the city’s business to regulate supply. The cab companies don’t like it because there’s no overall cap on the number of rideshare cars on the streets at any time. They also say the rules effectively legitimatize rideshare service.

Both sides are right and wrong.

Taxis and rideshares provide essentially the same service, just with slightly different customer-interaction channels. Seattle’s council should have said, “We don’t care what you call yourselves. Here are the minimum safety and insurance standards everyone has to meet. Beyond that, we’ll let demand decide.” (Seattle council did require the rideshare operators to meet the state’s commercial insurance requirements.)

And that’s where Tacoma’s City Council has a chance to get right what Seattle made a hash of. To the extent it has a responsibility for ensuring public safety, it can make a legitimate claim to establishing and enforcing regulations on all the commercial transportation services, and doing so uniformly; a fast-food restaurant doesn’t get to operate its kitchen at a lower level of cleanliness than a fancy sit-down eatery just because it’s smaller or cheaper or more convenient.

But maintaining orderly markets is not in its scope of authority, even when the argument is “that’s the way we’ve always done it.” Once everyone operates on the same regulatory plane, let the cab companies and the rideshare people establish how much and what type of service they want to offer. If one proves superior, so be it. It happened to other industries; no reason this one should be exempt.

Seattle and Tacoma are hardly alone in tangling with both cabs and rideshare vehicles. Portland and Austin have taken far more draconian measures against the rideshares than Seattle has.

Nor are they alone in dealing with the broad issue of where government fits in fights between competing private interests. State governments, including Washington, have been pulled into the battle between Tesla, which wants to sell cars directly to the public, and the car dealers who want to maintain the long-standing ban on auto manufacturers operating their own sales network. The struggle over health care insurance is a struggle over government’s attempts to control a marketplace, and making it worse in the process.

But Tacoma isn’t debating car dealerships or health insurance at the moment. The issue before it is personal transportation, and it’s not all that difficult to deal with. We’ll give the city a little credit that it can figure out how to make sure consumers can conveniently and safely arrange for a ride without getting taken for one.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

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