How do you deregulate a transportation service like taxis? The popularity of competitors such as Uber, Lyft and Sidecar has stirred calls to loosen regulations and allow innovative business models. That’s good. The question now is what role the government should play.
The best approach for these app-based services is transparency.
Traditional taxis are heavily regulated. Governments control fares, paint schemes and the number of vehicles. When you can hail a vehicle with an app, many of these rules become unnecessary. Yet existing laws didn’t anticipate these services, meaning they often are technically illegal. (Jeff Bezos, who owns The Post, is an investor in Uber.)
I use these app-based services often. Ordering a car is a snap, payment is seamless and drivers are friendly. These advantages have won Uber and its competitors legions of fans in cities across the United States. But for services as fundamental as transportation, there are risks of having no role for the public. These firms may displace most taxi service, as is happening in San Francisco, where taxi usage has dropped 65 percent since early 2012. And Uber already has been accused of engaging in shady behavior, by some drivers and at least one competitor.
Is there a way to encourage innovation but protect the public? We can look to the airline industry, which was deregulated in 1978. The federal government stopped prescribing airlines’ exact routes and fares but, in addition to continuing to ensure safety, it collected data from the airlines about their routes, schedules, fares, how full the planes are, on-time performance and much more. Government officials now crunch these numbers and, more important, so do travel journalists, bloggers, watchdogs and advocates. If an airline starts doing shady things, people will know.
Cities considering deregulating their taxi markets could require that companies disclose information about their services, openly and to everyone. Then we — the public, not just a few people on taxi commissions — can keep an eye on how our transportation networks are serving us.
Cities could require that Uber/Lyft type services, which government agencies often call “transportation network companies,” release data sets with the approximate origins and destinations of trips, wait times and fares. Cities already collect this data from old-style cabs, and some, such as New York, have released it publicly, making useful maps and tools possible.
With this data, people can better understand how often and when a service uses “surge pricing,” where a service charges more during periods of high demand. This practice can upset customers but it is helpful if used fairly and if consumers are well-informed — which open data can ensure.
Open data also can show us how service and wait times compare between rich and poor neighborhoods. Government has a clear role in making sure that disadvantaged areas don’t suffer when it comes to something as fundamental as transportation. In fact, Uber and its competitors now often serve poor areas better than traditional cabs, and they don’t discriminate based on skin color. Hopefully, open data will prove that these services are reducing unfairness. But if that stops being true, open data will help the public find out.
So far, Uber and its competitors are often better and/or cheaper than the regular taxis, and that’s why they are popular. They are so popular, in fact, that anytime local legislators try to do something Uber doesn’t like, Uber asks its users to e-mail officials — and they do, en masse. As cities have focused on whether to allow these services, transparency has been a secondary issue.
If legislators decide to ask services to disclose this data, Uber might well cry wolf, suggesting that the government is “trying to shut it down.” Consumers shouldn’t swallow that whole. Airlines would rather not have to tell anyone how often planes are delayed, but it’s good for consumers that we know. Transparency can allow cities to legalize Uber, Lyft, Sidecar and others without giving up our ability to see and address problems.
Transportation is too important and too universal to keep in the dark.
David Alpert is editor of the blog Greater Greater Washington.
The Washington Post