Legal ridesharing comes to Portland…sort of
Uber is operating legally in Portland, for now. A pilot program adopted by the Portland City Council has given transportation network companies the green light to operate for four months, at which time the city council will need to revisit the issue. When it does, it may be confronted with a difficult decision: whether or not to roll back the liberalization of transportation-for-hire services. Doing so would be a mistake.
The furor over the emergence of Uber in Portland has overshadowed the comparative weakness of the city’s transportation-for-hire situation overall. In a study conducted by the R Street Institute, which examined the regulatory environment for taxis, limos and transportation network companies in 50 cities across the nation, Portland ranked among the worst.
The new pilot program, which not only legalizes TNCs but also improves the state of the city’s taxi market, could improve Portland’s rank dramatically, provided that the reforms are made permanent.
Regulations that have, to date, artificially suppressed both fares and the numbers of for-hire vehicles that can operate in the city have been suspended. Those changes, in consort with one another, will allow consumer demand, and not industry protectionism, to dictate the future of the transportation market.
What’s more, in a freer market, as consumers come to understand the distinct benefits of each mode of for-hire-transportation, they will be able to tailor their behavior to the situations best fit for each model. For instance, in situations in which an immediate hail is required, a taxi will continue to make the most sense. Whereas, when a ride is needed in an area not otherwise frequented by transportation-for-hire, connecting with a TNC will be an attractive option. The resulting efficiencies will save consumers money.
While the pilot program is victory for Portland’s transportation-for-hire consumers, the significance of the development should not overshadow the state’s need for comprehensive TNC legislation. Legislators in Salem are currently considering bills that would establish statewide insurance standards for TNCs.
Two of those bills are problematic. In fact, they are so onerous that, if passed, Uber might be forced to leave the state. Fortunately, an alternative exists. Insurers and TNCs agreed upon a national model that balances consumer protection with market flexibility earlier this year. Since then, 16 states have seen fit to adopt it.
If adopted in Oregon, that standard would enhance safety by eliminating consumer confusion about the type and amount of insurance in effect during a TNC ride, which has been a hitherto persistent barrier to the wholesale acceptance of TNCs.
Policymakers at the state and municipal level should continue to remove obstacles that hinder for-hire transportation services, in whatever form they take. Affordable on-demand personal mobility is a necessary condition of economic growth and shared prosperity. The more transportation options available to consumers in Portland, and in Oregon as a whole, the better.
