WASHINGTON (June 6, 2014)  – The R Street Institute is deeply disappointed by Virginia Department of Motor Vehicle’s cease and desist order to Uber and Lyft this week, ordering the services to immediately stop operating in the commonwealth.

“Virginia is just the latest in a long line of states and municipalities that have seen the overwhelming consumer demand for peer-to-peer transportation and responded by trying to destroy the services filling that need,” said Andrew Moylan, executive director of R Street. “Instead of taking a light-touch approach that fosters new business models like Uber and Lyft, the DMV has chosen instead to smother them in their cribs.”

While minimal regulation of ridesharing services, such as criminal background checks and minimum insurance thresholds, are appropriate requirements to place on all drivers transporting passengers for compensation. However, peer-to-peer services like Uber and Lyft are not transportation companies, and therefore should not be subject to further operating regulations required of companies that own a fleet of cars for hire. The purpose of services like Uber and Lyft is to connect drivers to riders. The services neither employ the drivers nor own the cars.

Moylan also noted that services like Uber and Lyft provide new alternatives and more choices for consumers, something the established transportation companies do not support.

“Virginia’s antiquated taxi and limo industry has worked tirelessly to destroy any possibility of competition. Sadly, the DMV has responded to their agitation by trying to end thriving services like Uber and Lyft,” he said. “This attempt at snuffing out competition will only end up harming consumers, divers and Virginia’s economy.”

Moylan suggested the state government take action to ensure that consumers have as many options and competition available to them as possible.

“More competition provides savings for consumers. Virginia’s legislature should immediately begin working on their own cease and desist letter to the DMV in the form of new laws that make clear that for-profit peer-to-peer hired transportation is a legal business model.”

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