Limo, Taxi Industries Should Apply “On-Demand” To Government

Posted on January 14, 2015 by - Also by this author

Fed up with the Goldilocks status of TNCs, taxi drivers in Broward County, Florida are insisting on a simple solution: Let us be like Uber.

It makes you wonder if all the energy being devoted to trying to regulate TNCs “up” wouldn’t be better spent regulating everyone else “down” to their level.

One or the other path must be taken, for sure. But long-term, de-regulation for taxis and chauffeured vehicles is the option that can best promote technological improvements in operations and accommodate changing customer demands and preferences.

The TNC controversy is one more element in the overall economic struggle of the 21st Century: Slow, antiquated public sector bureaucracies can’t keep up with private sector technology and innovation.  While TNCs stand guilty of deceptions and double-dealing, even worse offenders are the crotchety, semi-comatose governments at all levels. We must not lose sight of that bigger picture.

Governments, not TNCs, created this mess. Over the years, they wrote different sets of rules, applied them inconsistently across ground transportation categories, colluded with protectionist interests, multiplied the number of rules and mandates, levied expensive fees and charges to fund their regulatory edifice, enforced the rules randomly, and failed to keep up with innovations. So now we have the situation of TNCs redefining the ground transportation market and getting off easy because government has hamstrung taxis and limos.

The logical answer is to de-regulate all for-hire transportation down to a more flexible, competitive level, as appears the case in the city of Washington, D.C., where taxis and TNCs are seeing some success with regulatory parity. Maybe this could be a model, or the beginning of one, for other cities and states:

Weekly Standard article here

The truth behind cab fares and limo rates is that they are driven up by costs of insurance requirements, licensing fees, background checks, labor and employee mandates, and a myriad of other rules and requirements — all of which are passed on to consumers. Limousine operations, for example, must abide by insanely high insurance requirements, often with liability levels of $1 million or more per vehicle.

So if governments cannot get their acts together, or at least back off their acts, then the limousine and taxi industries should en masse insist on, demand, and legally pursue every de-regulatory remedy possible. If a TNC cannot be fairly regulated like a limo or taxi, then limos and taxis should be able to do business exactly like a TNC: Flexible rates and reservations, territorial service choice, use of independent contract drivers and chauffeurs, and real-time, customer-driven technological adjusting.

To re-create this environment, each state government should set up its own universal “ground transportation license” program, or GTL, that establishes insurance coverage levels, vehicle safety standards, and driver background checks for all for-hire vehicle, commercial passenger transportation. The 50 state legislatures and regulatory agencies each would determine their respective GTL standards via the democratic process involving all parties. Then let FHV providers choose whether to operate and brand like a luxury limousine service, a black car service, a cab service, an airport shuttle service, a TNC — or any combination thereof. As long as you have a legal state-level “GTL,” you are good to go.

Ground transportation has a lot in common with the media business, actually.  If I’m a media content provider, I can choose how do deliver my products, whether via the Internet digital media, Amazon Prime and Netflix, satellite/cable TV, for-sale DVDs, movie theaters, live broadcast TV and radio, and/or print publications. I just need to respect the same copyright, postage, FCC and/or ICANN standards as everyone else, wherever they apply.

Ground transportation should run in the same manner: Choose your methods and mediums on a level, clearly defined competitive arena, and provide your service your way. Let’s hope government finally gets it -- and gets out of the way.

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