Women and men who drive for Uber and Lyft are hopping mad with the city of Seattle for raising base fares – eroding their competitive advantage. They say the city's idea of "leveling the playing field" in the transportation business is like fixing a flat tire by slashing the other three tires.
Last week, city councilors in Seattle, Washington approved new regulations on ride-hailing (or ride-sharing) apps that among other things would raise the base fare to $2.40 per ride — up from the $1.35 base fare they currently charge. The legislation was drafted with the help of a local Teamsters' union of taxicab and truck drivers.
The idea is that this will deliver ride-hailing drivers more take-home pay, but drivers and opponents say it will drive away customers to the benefit of their competition – taxicabs – much more. They recognize that lower fares make their rides more attractive than traditional taxicabs and is a competitive advantage.
One woman who drives for Uber in Seattle explains that they didn't need the city to boost their wages. She and many other drivers she knows say they earn about $20 per hour – well above minimum wage. Instead, she thinks the city council is working to protect taxi drivers to their detriment:
“We’re all for competition,” [Barbi Fortin] said. “There’s Uber, there’s Lyft, we have taxi drivers that we help … We feel bad for the taxis with all their oversight from the city. It’s an old industry, and you need to fix it.”
“I am a small business owner — the smallest of businesses — one car, one person, and an app in order to connect with riders,” Fortin said. “I choose to do it this way; I can make a great living at this, and I do not need big businesses or politicians to step in my way and make my job hard.”
Over 23,000 customers also sided with ride-hailing drivers and signed a petition created by Uber expressing their opposition to the city council's efforts for various reasons including public safety and the affordability of ride-hailing compared to traditional taxicabs. Their comments were clear about why they don't want the city to raise ride-hailing fares:
"I live in Seattle – not Naples. Rideshare reduces costs, drunk driving and saves lives. Doubling the price will cause hardship and likely kill people as higher costs will induce more people to drive themselves when they should not. Is killing people the goal?"
"We don't own a car. It's just never been afforable to us. Having rideshare bd so affordable to us has open many options of when and how we can get around. We're not limited anymore and the main reason is because of how affordable rideshare is and reliable, unlike taxis…"
This is about protecting taxicabs. Period. One city councilman even admitted it:
Tony Kilduff, a member of the City Council staff, said that the regulations are intended to “put a floor on the rates that are available to everybody so that the taxi drivers are not at a disadvantage on that price point when it comes to maintaining market share.”
This is a prime example of government picking winners and losers rather than ensuring a truly competitive marketplace by de-regulating areas of the industry that are being held back by strenuous rules.
If taxicabs are over-regulated, lower their regulations and rates fares so that they can be competitive rather than stifling new competition.