Lawmakers Are Worried About Uber Undercutting Cab Drivers, but They’re OK With Driverless Cars

Regulators chasing rideshare services will be left behind by the next wave of city transportation.

National Journal
Kaveh Waddell
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Kaveh Waddell
June 9, 2014, 9:18 a.m.

As cit­ies and states con­tin­ue to crack down on pop­u­lar ride­share ser­vices, in part over labor con­cerns, law­makers see no con­tra­dic­tion in pav­ing the way for driver­less vehicles to start tak­ing over the streets.

On Thursday, Vir­gin­ia De­part­ment of Mo­tor Vehicles Com­mis­sion­er Richard Hol­comb sent cease-and-de­sist let­ters to Uber and Ly­ft, which op­er­ate ser­vices that al­low smart­phone users to find and hail drivers for hire. The or­der comes on the heels of the state DMV’s de­cision in April to levy civil pen­al­ties that ad­ded up to $35,000 against the two com­pan­ies.

The con­flict stems from mis­aligned defin­i­tions of the ser­vices that Uber and Ly­ft provide. Hol­comb says that the two com­pan­ies’ op­er­a­tions “are not ride­shar­ing ar­range­ments as defined by Vir­gin­ia law be­cause Uber re­ceives com­pens­a­tion for its ser­vices.” If they were such ar­range­ments, he said, they would be ex­empt from reg­u­la­tions that gov­ern taxi ser­vices. But the com­pan­ies dis­pute his char­ac­ter­iz­a­tion, claim­ing that their apps simply match pas­sen­gers with drivers.

Both com­pan­ies plan to con­tin­ue op­er­a­tions in Vir­gin­ia.

Uber and sim­il­ar ser­vices have clashed with reg­u­lat­ors in the U.S. and abroad be­cause their un­reg­u­lated mod­el un­der­cuts the wages of li­censed cab drivers. But some of the cit­ies and states that are try­ing to lim­it Uber’s reach in or­der to pro­tect their ex­ist­ing taxi sys­tems are also trip­ping over them­selves to lay down a leg­al frame­work for an im­pend­ing wave of driver­less cars — and autonom­ous car ser­vices would elim­in­ate labor from trans­port­a­tion en­tirely.

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In Novem­ber 2012, an at­tor­ney rep­res­ent­ing San Fran­cisco cab drivers filed a class-ac­tion law­suit against Uber, al­leging that the com­pany’s un­li­censed status al­lows it to “un­law­fully com­pete and take fares from law-abid­ing tax­icab drivers.” But a month later, Cali­for­nia passed a law that cre­ated a “leg­al frame­work and safety stand­ards for autonom­ous vehicles on state roads and high­ways.”

Something sim­il­ar is hap­pen­ing in Wash­ing­ton D.C., too. After the city threatened to shut down Uber for good, the com­pany se­cured its place in the Dis­trict when the city coun­cil ap­proved a le­gis­lat­ive frame­work for ride­share ser­vices. At the same time, law­makers are set­ting up rules that would gov­ern autonom­ous cars in the city.

Autonom­ous vehicles are one step closer to real­ity: Google re­leased a chubby elec­tric two-seat­er two weeks ago that doesn’t even have a steer­ing wheel or ped­als. The vehicle has only two con­trols: start and stop. Writ­ing in CityLab, Zip­Car founder Robin Chase en­vi­sioned a “heav­en” where shared driver­less vehicles pick up mul­tiple pas­sen­gers and shuttle them to their des­tin­a­tions more ef­fi­ciently than ex­ist­ing taxi ser­vices ever could.

If Chase’s vis­ion comes to pass, the war cit­ies and states are wa­ging against Uber and Ly­ft will be en­tirely ir­rel­ev­ant: The ques­tion of who may or may not op­er­ate taxi-like ser­vices in Amer­ic­an cit­ies will be mean­ing­less if drivers are en­tirely re­moved from the equa­tion. But un­til autonom­ous vehicles ar­rive en masse, some gov­ern­ments seem to want to keep a tight hold over the taxi sec­tor, to the det­ri­ment of in­nov­at­ive ride­share com­pan­ies.

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