If you haven’t used the rideshare apps Uber and Lyft, you are probably puzzled by all the noise about an ordinance being considered Thursday by San Antonio City Council to regulate these emerging technologies.
A few months ago, I went to bed early only to have the phone wake me and my wife up at 11 p.m. Our son’s car battery had completely failed and he needed a ride home. Rather than getting up, getting dressed and driving eight miles away to get him, I picked up my phone and opened up the Uber application. I directed an Uber car to his location, saw the picture of the driver and the make and model of his car, where he was at that moment en route to get my son, and texted the driver with special instructions. The driver texted me back immediately. I then texted my son telling him exactly when the car would be there and the driver’s name. Since my credit card was already pre-loaded into the app and it had told me how much the fare would be, I had nothing else to do. So I went back to sleep. My son had no money and didn’t need any. He hopped out of the car at our front door and went to bed.
Calling a telephone dispatcher for a cab is the exact same thing we used to do back when we used black ceramic rotary phones hard-wired in the kitchen. Technology has evolved around a stubborn traditional taxi system. Who would ever go back? Well, no one, of course, which is why in many ways, high-tech, mobile-app ridesharing is here to stay. Anyone who has used it immediately realizes it is transformational. People who might never consider calling a cab are using rideshare services as their personal means of public transit.
As of last night, it appeared that City Council was about to make a terrible mistake by adopting an ordinance regulating Transportation Networking Companies – like Uber and Lyft. But rather than lightly regulating such services for public safety and consumer welfare – like the ordinance Austin just adopted – San Antonio is going its own way and creating a barrier to entry for an emerging technology. Other cities have passed much less onerous regulations that recognize the market power of consumers with technology in a competitive market. Cities like Denver, Los Angeles, Minneapolis, San Diego, Seattle, Washington, D.C., and Austin are welcoming this new technology that has become popular with Millennials while San Antonio is on the brink of chasing it away.
The most recent draft of the ordinance available for review would likely run Uber and Lyft out of town due to excessive costs and unnecessary regulations that won’t help consumers. San Antonio got off on the wrong foot by declaring these services illegal from the start. Then the Public Safety Committee ignored the work of a task force they had appointed to draft an ordinance, and accepted language for a new ordinance that requires too many safety inspections, too many background checks, too much insurance, and too many fees – none of which consumers want or will benefit from. Such ordinances are ostensibly written and enforced on behalf of consumers, but will hurt them by raising prices and reducing competition.
Uber and Lyft are part of the emerging wave of technology-driven competition to clunky cab services. They operate under the unforgiving regulation of smart, connected consumers who are asked to rate every ride they take, and review the ratings of every driver before they accept a ride. Companies operating in this real-time, consumer-regulated environment must respond immediately to consumer complaints. If a rider says the air conditioning is broken or hears squeaky brakes, they will share that in their rating as will the next and the next rider. But the San Antonio ordinance requires frequent and expensive inspections along with random surprise inspections which place an additional burden on local police.
The intensity of consumer demands require these services to be an exceptional experience every time. That is why Uber and Lyft cars are clean, later-model cars with higher driver and insurance standards than clunky cabs are required have. The self-regulation incentives of both the Transportation Network Companies (TNC) and the drivers – many of whom are driving in their spare time – far exceed the incentive of the city to regulate safety.
Members of Council have heard a lot about a “level playing field” with legacy cab regulations. But rather than regulate up to the monopoly cab level, why not deregulate cabs so that cab drivers can keep more of the money they earn, drive nicer cars, and provide more options for consumers rather than enriching the owners of the few authorized taxi cab monopolies. San Antonio’s cab and limo regulations are among the worst in the country. See an excellent national comparison of taxi, limo, and TNC regulations by the R Street Institute here. Hopefully city council won’t continue this unenlightened approach with the adoption of a bad ordinance today.
I was a leading opponent of the streetcar, seeing it as a 19th century technology at a 22nd century price. When the streetcar project was pulled down through the wisdom of our current Mayor Ivy Taylor, I suggested ridesharing as an alternative to slow, expensive trains on immovable rails. Ridesharing is the wave of the future, and will make public transit, as we know it today, obsolete. The average energy consumption per passenger is already less in most new cars than it is in buses and trains, and auto fuel efficiency is only getting better. Uber and Lyft technology allow consumers to rent the unused capacity of other people’s time and personal cars. But by 2020, driverless cars will start hitting the market leading to the next transportation revolution. By 2030, some new cars won’t even have the option of being driven by a human.
The future is here. There is no turning back from such incredibly consumer friendly technologies. Hopefully City Council will look forward instead of backward on rideshare regulations.
See all rideshare coverage here.