With this week’s passage of legislation in the New York Senate aimed at allowing ridesharing services like Uber and Lyft to operate upstate—until now, state laws have limited the services’ abilities to function outside of New York City—one of the last remaining major regulatory battles over ridesharing may be poised to finally draw to a close.
The taxicab industry’s desperate fight to stop the spread of this burgeoning competition culminated in a variety of dramatic public standoffs, such as mass protests by cab drivers in multiple major cities (including Washington) intended to cause gridlock and cripple the city’s infrastructure. Reports of anti-ridesharing collusion between regulators in Florida’s Hillsborough County, which includes Tampa, and local taxicab companies have so embarrassed the agency that the state may soon shut it down. There also was the pitched battle in Philadelphia that escalated to the point of cab officials calling Uber “worse than ISIS” and harassing individual Uber drivers.
The battle in New York State has been no exception. One needn’t look very far below the surface to get to the truth. Consider the response of John Tomassi, president of the Upstate Transportation Association, who was quoted by the Associated Press in its coverage of the legislation’s 53-5 passage.
“The senators who approved this bill have gone soft on public safety, tarnished their legislative records and capitulated to Uber’s high-priced lobbyists,” said Tomassi, who seemingly failed to note the irony of uttering such a statement on behalf of his own high-powered special interest group.
Highlighting Tomassi’s quote isn’t mere snark. A cursory dig into the UTA – which represents the interests of taxi companies across Upstate New York—reveals a telling and all-too-familiar picture. Though consistently couched in feigned concern about public safety, level playing fields and supposed shady power brokers operating behind the scenes from (presumably) smoke-filled rooms, the organization’s website quickly betrays its underlying motivations.
Among the most recent articles featured is the tellingly combative, “Cab industry still winning the battle with Uber in upstate New York.”
Though the article pays a quick nod of homage to the requisite claims that a “level playing field” is the organization’s end goal, the author quickly dispenses with the façade in favor of language praising those who have “launched a frontal attack” against Uber in an offensive to stymie the spread of the “cut-rate service.” Criticizing the “$60 billion” “behemoth,” a representative of the cab industry –whose medallion granting drivers monopolies on the right to pick up street fares fetch up to $1 million apiece – exuberantly declared, “We’ve held them off for three years.”
In short, the root of the ongoing debate over the rapid rise and spread of ridesharing services has very little to do with the cab industry’s disingenuous talking points. Instead, these regulatory battles are a product of an entrenched monopoly’s taking for granted that a more efficient, more responsive service might emerge. Late to this realization, cab owners across the nation have rushed to use their clout within state legislatures to halt their competition through regulatory hurdles, rather than by offering a more competitive product.
The upstart UTA’s focus on upstate is no accident. Cities like Albany, Buffalo and Syracuse have found themselves increasingly isolated, among the very few holdouts nationally whose residents have no reliable ridesharing option. As a result, the cab industry has doubled down, using local insurance requirements and other regulatory clubs to continue to bludgeon Uber and Lyft. After the state Senate’s long overdue vote Monday, these abusive and anti-competitive practices may finally end – at least in New York.
The handful of remaining major cities dragging their feet on ridesharing – like Austin, Texas – would do well to take note. In Austin, city regulators’ political fervor ultimately drove Uber out of the city entirely. In the wake of its absence, at least 10 new ridesharing services materialized in a bid to fill the void and meet the overwhelming demand.
On the one hand, this demonstrates that public demand for more consumer-friendly, cutting-edge options will not be easily put down, despite the cabbies’ wide-eyed fantasies of an easy way out of a self-dug hole. More importantly, such heel-dragging is bizarrely counterintuitive. Young, progressive, tech-friendly cities like Austin and Albany do themselves no favors by forcing enterprising, successful startups to drag regulators kicking and screaming into the future.
Governments should not be in the business of pushing consumers toward particular industries to which their legislators happen to be beholden. Instead, the recent, embarrassing spectacles in Philadelphia, Austin, Tampa, Albany and elsewhere should serve as a reminder to ensure regulatory frameworks are situated to encourage innovation, rather than stifle it out of the gate.
Image by Sean Pavone