For Uber, Cambridge Seeks Smart 21st Century Regulation
Uber is the ride-sharing app that’s both the darling of investors — having topped $17 billion in a pre-IPO valuation — and of harried ride-seeking residents of cities around the world, including Boston and Cambridge.
Last week, the city of Cambridge proposed a new set of regulations for Uber and other ride-sharing companies, requiring them to acquire dispatch licenses, charge a $50 minimum for some of their services, and have their smartphone technology be licensed by the city.
The popular app is now a worldwide phenomenon and a world wide headache for municipalities that are faced with the challenge of both overseeing a regulated industry and welcoming innovation that could improve city life.
Donna Blythe-Shaw, spokesperson for the Boston Taxi Drivers Association.
Bhaskar Chakravorti, senior associate dean and international business and finance and executive director at the Institute for Business in the Global Context at Tufts University’s Fletcher School. He tweets at @IBGC_Fletcher.
On the legality of Uber:
Donna Blythe-Shaw: “Uber is operating illegally in Massachusetts under current state statutes for motor vehicle registration and operation. Any vehicle for hire must be registered as a limo, and any private cars cannot be used for passenger-for-hire service.”
On taxi drivers’ biggest concern:
DBS: “It’s not a level playing field. What we want to stress is that our organization, the Boston Taxi Drivers Union, has been calling for taxi industry reform and getting this industry into the 21st century with smart apps and taking some of the oppressive regulations that exist now out of the industry. So you have a totally deregulated passenger-vehicle-for-hire service and an over-regulated, oppressive regulatory service called the taxi drivers’ medallion system. And we agree that innovation is important, especially in this industry. However, we don’t agree that any company that comes into the state or the city can operate with impunity.”
On the question of safety:
Nadeem Mazen “The market has done an interesting job regulating the safety question. On one hand, you have Uber and Lyft sponsoring their own insurance policies for individual drivers. On the other hand, you have a ratings system where everyone is rated incredibly highly and the people who aren’t filter out of the system very quickly. Right now the market happens to be exceeding the oversight that anyone could provide. But will that be true in the long term? Those are all open questions. And I don’t think that Uber or Lyft or any of these interests are necessarily balking at having these discussions.”
On a path forward for Cambridge in terms of setting up regulations for taxis and Uber:
Bhaskar Chakravorti: “The whole question of win-win needs to be considered in the context of the time frame. If you look at a sufficiently short time horizon, there’s no such thing as win-win. There’s only going to be one side that is going to lose, simply because the status quo has reserved a certain system for a while. When you perturb that status quo, then the people who are involved with that — whether it’s people who own taxi cab licenses, or the drivers, or the folks who are involved with regulation and so on — they are not used to what comes next. So that is necessarily a win-lose situation there. Over the long term, one could argue — depending on where the industry evolves — it could be a win-win because, in many situations, in the face competition, both parties have an incentive to improve their service, improve their offering and potentially win customers. But I definitely think, in the short term, the taxi cab industry is going to suffer if Uber continues its onward march.”
How elected officials should handle Uber:
BC: “I believe the smart way forward is to allow these so-called disruptive entrants to come in and, at the same time, continue to maintain a minimum threshold of regulations to make sure you provide a safety net to both drivers and people who are getting rides on the system, whether it’s Uber or Lyft or whatever the next one that comes along is. We are obviously concerned about safety — when you’re in a vehicle, and if something bad happens, then who’s liable? The laws on this could be reinterpreted when a bad incident happens. We don’t want to discover it in the process of litigating after a bad thing happens. There’s certainly a question of safety on the roads. When a car that’s part of the Uber system crashes into another car, then who’s responsible? And a clever lawyer could make an argument in a different direction. So it’s certainly important from a municipality’s perspective to have some basic set of regulations. Now, the difficulty is outlining what those minimum set of regulations are. No two people will agree — and some may want those regulations to be sufficiently high so that it almost equals the degree of constraints that exists in the existing taxi cab system.”
- “Veterans of Cambridge politics said they were not surprised at how the Uber battle has exposed the rift between the tech types who have shaped Cambridge’s image to the outside world, and the locals who fear that runaway development, fueled by the tech boom, threatens to make their city unlivable and unaffordable.”
- “The Cambridge licensing commission has proposed draft regulations Uber said would put it out of business there. They include rules on how technology can be used to dispatch and meter fares — Uber’s lifeblood — and requiring a $50 minimum fare for its service.”
- “In capital cities across Europe, taxi drivers took to the streets without passengers Wednesday afternoon. They slowed to a snail’s pace in what Parisians called ‘Operation Escargot.’ Horns blared around Trafalgar Square in London. In Berlin, taxis massed at the Central Station. All to protest the smartphone app Uber.”
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