Massachusetts Lawmakers Seek New Restrictions on Uber, Lyft

Published November 1, 2015

Massachusetts lawmakers are considering imposing new regulations on ridesharing transportation network companies such as Uber and Lyft, including requiring the purchase of $1 million in insurance, regulatory oversight from the state’s Department of Public Utilities, and mandatory government background checks on drivers.

Protectionism, Not Protection

Adrian Moore, vice president of policy for the Reason Foundation, says the proposed rules are more about protectionism than protection.

“There is little to no consumer protection in these proposed regulations on Uber and Lyft,” Moore said. “Rather, they are rules designed to protect the taxi companies from this new competition. Consumers clearly prefer the personal ratings and information available via apps with ridesharing services to trusting the regulators of taxi companies that have given them stodgy, low-quality, expensive services for decades.

“There is simply no justification for regulating this market, other than basic insurance requirements, now that technology has solved any information problems between consumers and providers of paid rides,” Moore said.

Increasing Market Size

Peer-to-peer economy services benefit consumers and should be only lightly regulated, Moore says.

“These ridesharing services are increasing the market for paid rides,” Moore said. “That is good for the economy and the environment, so legislators should no put any barriers in the way. The only regulations needed now are basic insurance requirements.”

Slow Adoption of Improvements

Matt Blackburn, a policy analyst for the nonpartisan Pioneer Institute, says the traditional taxicab industry has a history of being slow to respond to consumers’ demands.

“When you look at the way that taxis have historically functioned, they have been especially slow to adopt technological improvements that consumers have long called for,” Blackburn said. “Some examples in the last 10 years are credit card readers and GPS. These are things that are very basic [and] that improve the consumer experience that the market really demands. There’s no incentive for taxi companies to meet consumer demands, because they weren’t worried about losing any market share.”

Kimberly Morin ([email protected]) writes from Brentwood, New Hampshire.

Internet Info:

Brad N. Greenwood and Sunil Wattal, “Show Me the Way to Go Home: An Empirical Investigation of Ride Sharing and Alcohol Related Motor Vehicle Homicide,” Fox School of Business-Temple University Research Paper Series: