Regulations

How To Read Past All The TNC Trickery

Posted on August 5, 2014 by - Also by this author

This is an example of ridesharing, also known as hitchhiking. A passenger gets a free ride shared by a driver who chooses to pull over. Get it? Ride. Share. No money involved. TNCs and their media admirers need to understand that Uber, Lyft, etc. are not a rideshare company. They are ride-for-hire services. Glad I could clear that up.
This is an example of ridesharing, also known as hitchhiking. A passenger gets a free ride shared by a driver who chooses to pull over. Get it? Ride. Share. No money involved. TNCs and their media admirers need to understand that Uber, Lyft, etc. are not a rideshare company. They are ride-for-hire services. Glad I could clear that up.

There’s been a lot of tough talk about TNCs lately among all sides involved, as the app-driven form of transportation gains ground with customers and stirs up regulatory controversies. At LCT, we see plenty of media coverage of TNCs, such as Uber, while generating some ourselves. I’ve noticed that much of the discussion across the media board could use more accurate terms and concepts.
 
On the theory that whichever side controls the language and its meaning has a better chance of winning an argument, I offer this “corrections” column for coverage of all-things TNC and Uber. Before any resolutions can be reached, some basic lessons need to be absorbed:

TNCs Are Not Rideshare Services: Media lemmings widely use the “rideshare” label, which plays right into the TNC public relations strategy. But a TNC is not a rideshare company. Sharing a ride implies voluntarily giving a friend a lift, picking up a hitchhiker or carpooling to work. That’s not happening with TNCs. They are selling rides for profit. I don’t “share” a hotel room when I take my hotels.com reservation and check in at the Hampton Inn. I’m still paying for a room and checking in, just like a walk-in guest. If I hit the Uber app, I’m paying for a ride. Sharing is based on voluntary exchanges of free goods and services. Once money is involved, it’s not sharing. It’s called buying and selling, and the media should learn this distinction.

TNCs Are Transportation, Not Technology Companies: The TNCs whip out this clever canard all the time: We are a technology company, so you can’t regulate us. A TNC is no more a technology company than a grocery store chain, with its real-time inventory, delivery, and price scanning and adjustment information technology. Once again, if I hit the Uber app to pay for a ride, it is not delivering a technology to me. Uber is giving me a ride. Uber may use technology, but there is no on-the-ground difference between a TNC and a limousine company that retains only independent contractors who own their vehicles, and then directs them via Internet cloud technology.

TNCs Are Not “More Pure” Free-Marketeers: As the political rhetoric heats up, we are seeing an increasing number of editorials and opinions pitching Uber and TNCs as innocent capitalist participants (good guys) being unjustly hamstrung by antiquated anti-business forces, i.e. government, insurers, taxicabs, and traditional ground transporters (bad guys). Free-market ideology has been loosely applied to the TNC-debate, with newspapers such as the Orange County/Los Angeles Register accusing the “bad guys” of trying to preserve entrenched interests. It’s not that simple. What the free-market advocates are missing in their otherwise sensible theory is the original American principle that government, no matter how limited, still must enforce the rule of law. Free markets thrive only when synced with equality of opportunity. There are countless examples and proof of Uber and TNCs not only ignoring the rule of law but benefiting from laxer standards and/or enforcement. TNCs and limousine companies are transportation businesses that do the same thing in different ways. A vehicle still picks you up, whether booked via app or a reservation.

Dude, like the way you extend your rideshare app. Great technology!
Dude, like the way you extend your rideshare app. Great technology!


Government Is The Problem — And The Solution: The fact that we are seeing so many regulatory spats among ground transportation providers results from a legacy of too many government rules to begin with. The more rules a government imposes, the more it has to track and enforce them. At some point, the edifice gets rickety and unwieldy. TNCs threaten the limousine industry when governments grant them preferential treatment. TNCs that are more loosely regulated than limo companies gain an unfair competitive advantage because TNCs do not bear the costs of the regulations and enforcement. Federal and state constitutions grant all citizens, employees and companies equal treatment under the law. Governments must abide by that high standard while grapsing a basic principle of 21st Century global economics: Technology enables business sectors to run freer, so service providers move faster to supply consumer demands. In that scenario, old-school regulatory minutiae fall flat. Rules should match innovation.

Prime-Time Flub-Dubs: Uber CEO Travis Kalanick has become a business media darling, hailed as a rags-to-riches entrepreneur providing cheap rides when you want them. But attitude and conduct tell us more about a business person than mere success. Kalanick publicly calls the taxi industry a-------. He acts combative and aggrieved. Fueled by big money and manipulative rhetoric about liberty, he swaggers like a nouveau-riche arriviste with a sense of entitlement. There’s nothing wrong with success and its private spoils, but Kalanick’s public pose betrays an attitude of being above the rules. As they pursue solutions, the limo and taxi industries should be wary of Uber’s big money ploys. And Kalanick could use a veneer of humility and finesse, or at least hire a public relations agent who can fake one.

The saving graces of free information and business markets ultimately lie in how consumers choose and perceive products. Confusion may slow the flow of facts, but eventually truth emerges in a connected, always-on, information-driven world. If TNCs shirk rules and responsibilities and incur liabilities that endanger customers, the riding public will hear about it and catch on. If the TNC debate highlights the pains of government regulatory excess and crony capitalism, citizens will get angry and advocate for change. Better yet, if the limousine industry can pull off a superior business and technology model and outsmart competitors with safe quality service, the free market will bring the just rewards.

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