Newark, New Jersey taxicab companies are protesting against a deal reached between city lawmakers and Uber, a popular transportation network company connecting drivers and riders.
City lawmakers have been fighting the peer-to-peer economy transportation company for months, seeking to force Uber drivers to pay an annual $500 licensing fee and an additional $1,000 fee to do business at the city’s airport. Taxicab company drivers, by comparison, pay the government regulators only $300 in license fees and are not required to pay additional fees to pick up customers at the airport.
In exchange for being allowed to do business in the city, Uber will pay $1 million per year for the next 10 years.
On April 20, taxicab drivers rallied outside the entrance of City Hall, protesting the deal and yelling “corruption” as Newark Mayor Ras Baraka was seen exiting the building.
Keeping People Out of Work
Manhattan Institute Fellow Jared Meyer says the proposed ordinance, which the City Council scrapped in favor of the compromise, would have erected massive barriers to employment for low-income earners.
“While $1,000 here and $500 there may not seem like a lot, for a single mother who wants to drive while her young children are in school or for a college student who needs to drive in between classes to pay rent, every additional dollar counts,” Meyer said.
“One of the main benefits of ridesharing is that people can join relatively quickly and at a fairly low cost,” Meyer said. “Because of these low barriers to entry, many people choose to drive part-time instead of making a profession out of it, but raising barriers to entry through additional licensing fees would make working part-time too costly for many workers.”
Erica Jedynak, state director for the New Jersey chapter of Americans for Prosperity, says taxicab companies should market themselves to consumers instead of lawmakers.
“If taxis wanted to improve their product, demand that Trenton get off their backs and beat ridesharing into the ground by providing a better service to commuters,” said Jadynak. “We would cheer them on. What’s unacceptable is one business using government to stop another business from providing a better service to consumers.”
Jedynak says adding new regulations will discourage people from joining the peer-to-peer economy revolution.
“Charging these companies a massive fee and demanding they jump through hoops won’t help New Jersey consumers looking for an affordable ride, but it will hamper many would-be rideshare operators from finding employment,” Jadynak said.
Jenni White ([email protected]) writes from Oklahoma City, Oklahoma.
Scott Wallsten, “The Competitive Effects of the Sharing Economy: How is Uber Changing Taxis?” Technology Policy Institute, June 1, 2015: https://heartland.org/policy-documents/competitive-effects-sharing-economy-how-uber-changing-taxis/