Why I Agree With The Uber CEO — To A Point

Posted on August 21, 2013 by

Uber CEO Travis Kalanick recently discussed in a Fortune magazine interview how restraint of trade can be legal when it is disguised as regulatory law. Although I do not agree with anyone skirting the laws which protect the riding public, what he said did hit home a bit. Can laws be so arbitrary and heavy-handed that they are designed solely to restrain trade?

In some cities, the fees, licenses and fines to do business are astronomical and make it difficult or impossible for new players to enter the market. The best example of this is Philadelphia. The Philadelphia Parking Authority charges $12,500 for operators to have the right to do point to point pick ups in the City of Philadelphia and charges an additional $325 per vehicle annually to maintain that right. The PUC, which regulates the rest of Pennsylvania, charges only a $350 application fee and does not limit the number of vehicles for the same rights. 

The issue here is twofold: The amount charged by the Philadelphia Parking authority is over the top, but when operators have had to pay and endure these astronomical fees, they get defensive when there is an appearance that the system that they have had to operate under is bucked. I am not saying whether or not Uber is bucking the system. I don’t know either way, but I do believe that the rules should be the same for everyone. I also believe that regulation should be state wide. 

Florida is another state where municipalities looking for revenue streams have done it on the backs of the limousine industry. Operators who cover Miami Dade, Broward and Palm Beach counties have more than 10 permits they must affix to their windshields, all with fees and inspections attached to them. Statewide authority would address this. Illinois is now fighting this same battle.

Additionally, Kalanick discussed enforcement in his interview, which is a problem in Philadelphia and Pennsylvania. There are too few enforcement officers to police the illegal operators, and what they are actually doing is policing the legal operators. When a scab operator puts his card at the local car wash (let’s call him Bob’s Car Service) offering to drive you to doctor’s appointments and the airport, you have no way of knowing if he is or isn’t legal. He picks you up and the client could care less if his car does not have LM plates. The client doesn’t even know to ask. Enforcement can’t tell if he is illegitimate. We have all seen the hustlers at the airport who go up to travelers and ask if they need a ride. They know how to avoid the too few enforcement officers who are in other areas of the airport.

Kalanick also said in this interview that he is teaming with limousine operator partners. If this is the case, those companies in cities where the regulatory issues are out of hand should get Uber on board for the fight. I don’t believe that you go in and blatantly ignore the law. I am an American who believes that the system that was constructed to change laws by our forefathers is the right way to make change. This process is a difficult and rocky road, but with the backing of a billion dollar company such as Uber, these laws could be fought much easier. Most of the time operators are doing it grass roots on their own dimes while running their companies. 

Finally, Uber is essentially a dispatch system. If they are vetting the people they are working with and confirming that those folks are legal, then Uber has as much right to be a player as anyone else with an app. Limousine operators also have a right to work with them or choose not to. The problem occurs when luxury service becomes commoditized. As long as those companies who  work with any of the App companies are being paid the true value of their service, then the partnership should be equitable.

Uber may be the biggie right now but they won’t be the last. Instant gratification is what it is all about and the up and coming customers of tomorrow will forgo service for now. The limousine industry needs to find a way to work legally with these outfits to move forward or create an alternative of their own. If not, we may go the way of the record player.

— Linda Jagiela, LCT contributing writer

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