Susan Crawford (Professor of Law) promotes improving taxis in urban areas, as a way to provide reliable and cost-effective mobility to people in general. Uber aims also to provide reliability, but the definitions are fundamentally different.
This following trends makes sense, given the incentives (and purpose) of corporations to produce profit:
Uber drivers have a tough time making a living; they’re responsible for their own cars, fuel, benefits, maintenance, tolls, and certain insurance as well as the kickback to Uber that takes a substantial slice out of every fare they pick up. They may or may not know where they’re going, and they may or may not be driving cars that are safe. Uber consistently squeezes its drivers as tightly as it possibly can; new drivers are paying an even higher cut to Uber than the first generation did.
These trends will be particularly true for the lower-income drivers, who rely on driving as their primary income.
It would be interesting and insightful to do a historical analysis on the AT&T monopoly in telecommunications and draw parallels to this pending monopoly in transportation networks.
So even when private companies provide basic transport and communications services — in America, that’s often how we do it — they do this subject to extensive public obligations. That’s where the whole idea of “common carriage” came from — transport and communications networks operated by private companies that provided a high level of uniform service at uniform rates under uniform promises of safety and reliability.
I’m not sure that taxis are the answer, however, though the model of Mobility-on-Demand (MoD) systems is extremely compelling in urban areas, not necessarily operated by a single player (or even a single private player). As some commenters point out, taxi drivers also face many of the same issues as Uber drivers. Taxis are an old and slow-moving system, not very suitable to “compete” in today’s fast-paced world. Governments and public agencies must be willing to experiment, break their own rules, and move fast, if they wish to protect its people.
One last curiosity: bus drivers in some American cities are paid well and have nice benefits. They welcome riders with a smile and some centralized system optimizes their shifts so they have variety in their weekly routes. Perhaps there is something to be learned from public transit systems when considering MoD systems.
A very nice response by Tim O’Reilly addresses many additional problems and differences between taxi and Uber, most notably access to a private vehicle. (Taxis are rented; Uber drivers are required to have their own vehicle.) He lays out several actionable items for the government:
1. Removing outdated taxi regulations that make it difficult for taxis to compete with Uber and Lyft, even given comparable technology. For one example, consider Washington D.C., served by taxis with geographic restrictions. A taxi driver can pick up a passenger in Montgomery MD and bring her into DC, but must then drive back to Maryland to pick up another passenger, since he is prohibited from picking up in the city. A driver from Virginia can only pick up Virginia-bound passengers at Washington National Airport. And so on.
2. Working closely with Uber and Lyft to understand how well the city is being served. There is some evidence that Uber and Lyft are improving availability in previously under-served neighborhoods. Cities should be working to build on and verify these studies.
3. Understanding whether the reputation systems (and other self-regulatory regimes) of Uber and Lyft are producing results at least as good as the older regulatory regimes under which taxis operate. The passenger experience suggests that they are doing considerably better than the older regulatory regimes, but cities should actively be pursuing data to confirm or disprove this anecdotal evidence, and introducing regulation only when systematic problems have been uncovered.
4. Working with Uber and Lyft to understand the tradeoffs between lower fares for passengers and driver income. There is a risk that in pursuit of low prices for consumers, these companies could end up exploiting workers. Government does have a role in making sure that companies produce great experiences not just for their customers but also for the workers delivering their services. But guess what: government has abdicated that responsibility in low wage industries like retail and fast food, where workers are paid so little that they must supplement their wages with public assistance. (Recent estimates put the taxpayer subsidy to these industries at $153 billion/year.) I’d much rather see government focus on areas like this where there is a clear and present problem rather than in new industries like on-demand transportation where the market has not yet settled on the right balance between value to customers and value to workers. The fact that Uber and Lyft are competing so hard to attract drivers suggests to me that the market still has a lot to say about that balance.
5. Improving crime reporting so that there is a consistent basis for evaluating the relative safety of taxicabs versus Uber and Lyft. While there are many anecdotal accounts of bad Uber experiences, there are also anecdotal experiences of bad taxi experiences, but crime statistics are not reported in a way that allows cities to understand if new safeguards are needed.