My colleague Patrice commented earlier today that taxi companies would do better to concentrate on being more competitive with innovative ride-sharing outfits than trying to shut them down through lawsuits.
If taxis are to become more competitive, they need relief from the myriad regulations that govern their industry (down to having to listen to ads all day on the credit card gizmo). Now, from off all places the District of Columbia, there is news on this front. The Weekly Standard reports:
This week, the District of Columbia government proposed to deregulate the local taxi industry, which is facing challenges from ride-hailing companies Uber and Lyft. Issued by the Department of For-Hire Vehicles (DFHV) through an emergency notice, the new rules permit cab drivers to institute all-digital meters and loyalty programs, accept smartphone feedback from customers, and more.
"The original regulations merely created a floor for taxicab service in the District that was already enjoyed in other major cities," the DFHV report stated. "The pace of for-hire innovation in the past several years, the realities of the current market that now include lawful competition from private vehicles, and the increasing challenges of earning a living by driving a taxicab have combined to render [them] obsolete."
Don't look now, but, buried in this story, is the heady notion that many of the regulations that make life so difficult for DC cabbies are actually highly unnecessary:
Such (decline in profits for cabbies) come after years of regulations that have become increasingly unpopular among cab drivers. Passed by the D.C. City Council in 2012 in order to modernize the fleet and improve customer service, the laws forced cabbies to use a limited palette of cab colors, specific patented dome lights, and also install costly meters and credit card systems.
And drivers like Umoh Ekott claim that these regulatory costs—combined with increased competition—have made joining the taxi industry more expensive than signing up with Uber. In a Tuesday interview with WAMU radio's Martin di Caro, Ekott said that lamented his $500 meter, $700 patented dome light, $200 weekly rental fee, and numerous credit processing fees. "Ubers are not regulated. So a lot of cab drivers, they jump up to Uber," he said.
This anecdote reflects a July study by the Mercatus Center at George Mason University. The report found that D.C. cab drivers pay around $2000 in startup costs due to overregulation. This then increases the competitiveness of companies like Lyft, as barriers to entry are lower and ridesharing prices remain cheaper than taxi fares.
I ride in taxis a lot and I love being able to use a credit card, but the idea that cabbies should have to offer this convenience by law worries me. They are also required to have specific credit card machines that feature advertisements that can be muted only at customer request. The ads are maddening and many drivers have told me that they long to mute them. Should this really be a matter that is regulated?
Of course, the proposal to life certain regulations will face opposition.
But not from me–I am second to none in my sympathy for cabbies who have to drive around all day listening to Jeopardy! repeats.