Midland, Texas lawmakers are proposing new regulations on Uber, a popular transportation network company connecting drivers and riders, treating the peer-to-peer economy ride-sharing company the same as government-approved taxicab companies.
If enacted, Uber drivers would be forced to pay city regulators licensing fees and purchase work permits from the government. Taxicab companies would remain the only option for travelers at the city’s international airport, as Uber drivers would not be permitted to pick up or drop off passengers there.
James Quintero, director of the Center for Local Governance at the Texas Public Policy Foundation, says new regulations hurt consumers more than they may help.
“Each new local regulation brings its own new cost for consumers and added hoops to jump for drivers,” Quintero said. “At the end of the day, this results in a product and experience that is less than it could be.”
‘Game Changer’ for Consumers
Quintero says taxi companies need to stop fighting the future and embrace it instead.
“Ridesharing services, like Uber and Lyft, have been an absolute game-changer for the way consumers travel and people participate in the economy,” Quintero said. “There’s no question that the traditional business model employed by taxi companies is going to have to adapt or risk going the way of the horse and buggy.”
Technological progress and consumers win in the end, Quintero says.
“Local laws and regulations present a challenge to [transportation network companies], since they are generally perpetrated by entrenched special interests seeking to shackle market participants with big government,” Quintero said. “But if there’s one thing that’s proven true time and again, it’s that innovation and progress generally win out in the end.”
Fewer Rules, More Success
Josiah Neeley, a senior fellow with the R Street Institute, says lawmakers should make it easier, not harder, to earn a living.
“What we see is that when the regulations become too onerous, it not only discourages people … it can kind of shut down a lot of folks,” Neeley said. “It varies depending on your locale, but a lot of cities in Texas have a monopoly for a single company or other sorts of restrictions on the number of cabs or what kind.”
Neeley says lawmakers should work on cutting regulations on taxicabs instead of regulating taxicabs’ competitors.
“I think oftentimes it’s overlooked that in a lot of cities the cabs are overregulated too,” Neeley said. “While it certainly doesn’t make sense to apply more stringent regulations to ride-sharing [companies] than it does to traditional cabs, I don’t think you can assume that just applying the same regulation makes sense, and one of the reasons is that a lot of the cab regulations are over-burdensome, too. That really needs to be looked at.”
Kimberly Morin ([email protected]) writes from Brentwood, New Hampshire.