Budget & Tax

Transportation regulations: dangerous and ineffective

September 4, 2014

Lauren Aragon

After a meeting last week, the Oklahoma City Council voted 7-0 to advance proposed regulations for Uber and Lyft to a final hearing. These regulations would classify Lyft and Uber as “transportation network companies” and create oversight requirements. While such regulations may be intended to protect the public, the reality shows private market solutions work better to protect the safety of both consumers and drivers. In this case especially, arguments against increased government regulations are piling up.

First, the argument that Uber and Lyft would destroy the competitiveness of taxi services is short-sighted. Simply put, taxis would still hold 100% share of all pick up traffic since Uber and Lyft connect to customers only through phone apps. Customers waving their hands in the streets would still use taxis. Even if taxis eventually lose market share (which has not been proven), taxi drivers who meet Uber and Lyft standards could simply apply for Uber and Lyft positions.

Second, Uber and Lyft allow for instantaneous market fluctuations in price based on current demand and supply. Taxi operation would benefit from being able to adjust their prices. Sadly, they end up stuck in weeklong delays of bureaucracy when reporting rate increases or decreases, making them unable to respond to market conditions. This hurts taxi companies and taxi drivers.

Third, Uber and Lyft are already increasing safety for consumers. While regulations supposedly keep companies accountable and customers safe, there have been numerous crimes committed by registered taxi drivers throughout the country. In Santa Cruz this year, at least two taxi drivers have already been arrested on suspicions of sexual attacks on female customers. Another taxi driver in Panama City Beach was arrested this year and charged with sexual battery on two young women on spring break. Additionally, a recent report in California showed that many drivers are allowed to continue working even with long traffic records and lists of public complaints. While these taxi companies are supposedly following regulations, the lack of information and competition provides few incentives for ensuring safety and quality services. Driving requirements for Uber and Lyft are often actually more stringent than taxi licensing requirements, ensuring the highest quality drivers are on the road. For example, Lyft drivers are required to maintain a rating above 4.6 out of 5 stars to stay active on the Lyft app.

Lastly, Uber and Lyft actually increase the safety of drivers. In recent years, there have been several instances of taxi drivers being mugged, beaten, and even killed while working, including the death of a driver in Oklahoma City in May 2014. In another instance of violence, a liveleak video shows a passenger shooting the driver in the back of the head and then proceeding to rob him. Because hailing a cab is a completely anonymous task, any dangerous criminal can jump in, harass, and mug the driver without any real record of the customer. Ensuring a functioning debit or credit card on record just to call an Uber or Lyft helps protect drivers from anonymous, dangerous persons.

Oklahoma prides itself as a place where people are free to do business. We should know better than to increase regulations in the name of “fairness” and a false kind of “competition”. A real competitive market gains from the ability to respond in real-time to customer needs and demands. Decreasing regulations on all “transportation network companies” would actually accomplish more to protect markets, customers, and drivers.