Washington (March 7) – In less than ten years, ridesharing has upended the taxi and limo industry and become ubiquitous across the United States. While the battle to legalize companies such as Uber and Lyft is largely over, the industry still faces a number of questions about its regulation and growth.
In a new study, R Street Director of Technology and Innovation Policy, Zach Graves; Technology Policy Associate, Joe Kane; and Senior Fellow and National Security and Justice Director, Arthur Rizer examine the rapid rise and development of the ridesharing industry and provide an overview of policy issues that will need to be addressed as the industry grows and changes.
The paper argues that while many of the initial challenges that the ridesharing industry faced have been solved, the legal and regulatory framework that resulted has calcified the business model based only on how these businesses currently operate, as opposed to how they might in the future.
As policymakers revisit the existing laws and regulations surrounding ridesharing, they should seek to roll back structural barriers to entry and overly stringent rules. When it comes to new technologies, governments should embrace flexible standards that promote growth and continued innovation. Lawmakers should also recognize the ways in which ridesharing can be both a challenge and a solution to future-of-work issues. Finally, they should discard fees and licensing requirements that could enshrine legacy business models.
The authors conclude that: “Ridesharing is an industry that has changed as fast as it has grown. Keeping pace with these changes while having the humility to correct past mistakes is the only way to ensure that its full potential benefits are realized.”