There were two big wins recently in the District of Columbia. Not the Redskins or Nationals, but a win for innovation over status quo and a win for more consumer choice. Thanks, free-market competition!
We’ve reported on the battles between the antiquated cab industry which is doing any and everything it can to torpedo the efforts of new, tech-based companies such as Uber and Lyft, which allow riders to be picked up and dropped off with no exchange of cash, safely, and efficiently. We call this a disruption in the transportation industry.
D.C. has been silent on Uber but this week approved a law that permits these companies to operate legally. That’s a win for independent drivers, who are simply competing in the marketplace, and for riders who want another option for safe rides to where they need to go and good service along the way.
In response, the taxi cab commission, is unveiling new programs and offerings to bring the cab industry into the digital age. These include a taxicab app which allows riders to hail a cab, providing healthcare to drivers, and a van service for areas of the city that cabs don’t (want) to service. We’ll see if the cab drivers themselves will fight these new tools which are only helping to make them more competitive.
No more frustrating dispatch calls that may never get answered or hoping that your race doesn’t preclude you from a cab driver picking you up on the side of the road. This is a win for the market which is forcing cabs to innovate or become extinct.
The Washington Post reports:
The chairman of the D.C. Taxicab Commission will unveil a series of proposals Wednesday that he says will make the city’s fleet a model for others in the country struggling to retain drivers and compete with popular app-based services including Uber and Lyft.
Ron Linton suggests that all city cabs adopt a single app that would allow customers to hail a taxi — just as they do with Uber and Lyft. He also wants to create a van service for underserved areas of the city and offer veteran drivers health-care and retirement benefits.
Last month, Chicago Mayor Rahm Emanuel (D) unveiled a similar proposal for a centralized taxi dispatch system in that city.
The city’s taxi drivers have fought many of the taxicab commission’s and the D.C. Council’s efforts to modernize the fleet. Last year, separate groups of cabbies sued to delay new requirements, including those that required them to install new dome lights and credit card readers. Hundreds of cabdrivers voted to form an association affiliated with the local Teamsters Union.
Linton’s proposal comes a day after the D.C. Council gave preliminary approval to legislation that will allow such ride-share services as UberX, Lyft and Sidecar to continue operating in the District.
We applaud the not-so-novel ideas of the cab commission, which may be facing its last days as D.C. considers legislation to abolish it entirely given how transportation and parking services are managed.
It’s a lesson in marketplace competition versus cronyism. Buying government protections and help can only last for so long. Eventually, consumers and providers meeting demand in new ways will be too strong and too loud for government to ignore.
Taxicab and the cab commissions that represent them have spent hundreds of thousands – perhaps millions- on lobbying to secure protections from local government. That arrangement worked quite nicely until Uber and Lyft came along and grew in popularity challenging the taxicab business model.
In response, cabs have snarled traffic with protests – and they plan another one this week– and pushed lawmakers and law enforcement to go after companies like Uber. In Virginia, the transportation czar shutdown some Uber operations and made it illegal for UberX drivers to pick up riders. In some cities, police are conducting stings to nab drivers then impounding their cars and writing exorbitant $5,000 tickets.
Now, as we’ve reported, the cab commission realizes the days for taxicabs will be numbered if they don’t innovate. The saying goes, if you can’t beat ‘em, ‘join ‘em. In this case, it means making improvements in your services to consumers who are attracted away by providers offering better prices and better services. What we’re now seeing emerge is tension between the cab commission and cab drivers, who seem extremely resistant to change. While they battle it out, Uber and other competitors will continue to roll out new services for consumers.
This is a lesson that the market works when unfettered and unhampered by government picking winners and losers.