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  (Source: LA Times)
Taxi unions say government regulation is essential to "safeguard" the public from itself

The U.S. isn't exactly a "free market" at times, with outright bribery -- condoned by the U.S. judicial system -- or collusive public-private cartels leading to some products and services being banned from the market.  Just ask Tesla Motors Inc. (TSLA) whose electric vehicles have been banned from sale in many states.  That debacle arose due to the fact that Tesla has no dealerships and fearful dealership lobbyists banded together to pay off state politicians to ban direct auto sales.

I. Carpooling Gets Digital Era Makeover

Now the same principle is being applied to stymie the emergency of another set of companies in the transportation sector -- cloud-driven ride-sharing services.

Ridesharing -- also known as carpooling -- involves members of the public contacting each other via a smartphone or PC internet networking service and arranging to ferry each other to various destinations for fees.  The practice in informal form is almost as old as the automobile itself, but in the digital age app-enabled ridesharing has seen an explosion in interest, threatening the commercial taxicab industry and the city officials who depend on that industry for revenue.

Uber is among the pioneering startups in cloud apps for paid carpooling/ridesharing.
[Image Source: Uber]

California often is characterized as a leader in onerous regulation, but at times it can flirt with being laissez-faire.  

On a state level, that has been the case with ride-sharing.  Many companies in the field are based in California and rolled out their first services in the state.  Startup ridesharing services Sidecar, Uber, and Lyft are all based in San Francisco, Calif.

Uber, Lyft, and Sidecar

After initially threatening fines against these in-state startups, the California Public Utilities Commission (CPUC) backed down and agreed to create a new regulatory category [PDF] -- "Transportation Network Companies".  While perhaps not as good as no regulation at all, the move has allowed the service to grow within California without fear of being banned at the behest of the threatened taxicab lobby.

Ridesharing celebration
Ridesharing supporters celebrate CPUC's decision not to ban carpooling for cash.
[Image Source: Lyft]

Elsewhere, the trio are proving less lucky.  

All of the ride-sharing companies operate on the same principle, claiming that their fares are "voluntary" and admittedly fluctuating based on supply and demand.  Because they aren't charging rigid rates, they claim they are not subject to local ordinances in various cities that require taxicabs to pay per-cab tolls to city transportation departments/agencies.

Cities transportation agencies are pretty upset about not getting their cut of the pie.  They've circled the wagons in many jurisidictions, backed by the traditional taxicab industry who views these disruptive new players as an unlawful threat.

II. Philadelphia Shows Sidecar Drivers no "Brotherly Love"

The funny thing is that many cities supported ride-sharing as part of "eco-concious" initiatives when it was on a smaller scale and largely greenwashing.  But once it expanded and money became involved many cities had seen enough.

Sidecar -- a Google Inc. (GOOG) funded venture -- opened operations in Philadelphia, Penn., the "City of Brotherly Love" in late 2012.  But of late there's been little love for the disruptive startup from the city government.  

Sidecar infographic

In 2013 the Philadelphia Parking Authority (PPA) -- a city authority that derives its revenue from taxicab licensing -- decided it was time to put a stop to the business, which hadn't paid its toll.  It conducted a sting, seizing cars, ticketing drivers, and shutting down the operation.  Marty O’Rourke a PPA spokesman told TechCrunch:

[Sidecar drivers are] passing themselves off as taxis and they’re not.  It’s clearly not about technology. This is about public safety.  [The sting] was an operation to impound vehicles because they were operating illegally. If we find them out there again, we’ll impound them again.

Sidecar vigorously disagreed.  It points out that its drivers don't claim to be taxi drivers and are simply engaging in the time honored practice of carpooling with a small fee for the time and gas.

Philadelpha, Penn. has banned ridesharing. [Image Source: Visit Philly]

This month Sidecar was in court to try to defend itself, but it has yet to win the right to deliver services again or get some of its property back in Philadelphia.

III. Gotta Ban 'em All

Likewise Austin, Texas saw outcry from taxicab drivers who successfully petitioned the Austin City Council to in Feb. 2013 send cease and desist letters to the ride-sharing service ahead of the yearly South-by-Southwest (SXSW) festival.  Sidecar took advantage of the publicity, offering rides for free to spite city regulators.  But later in 2013 it had basically ceased operations in the city.  It's trying to petition the City Council to reconsider via a petition (which closed with 3,727 signatures), and local business leaders have also asked the council to change its mind.  But so far there has been no breakthrough.

Sidecar mirror
Austin, Texas has also banned Sidecar, Uber, and Lyft. [Image Source: Yelp]

Sidecar's last opportunity for action in Austin is the courts, where it filed a lawsuit in Mar. 2013.  Company VP Margaret Ryan blogs:

This lawsuit is bigger than Austin, Texas. What happens here matters for the entire sharing economy. Sharing resources is not a crime – it’s a solution for a better and more sustainable way of life. Rideshare is good for Austin and we’re going to defend this position in Austin City Court.

Uber, Lyft, and Sidecar all operate in Seattle, but in February the city council passed an ordinance that Sidecar says will effectively ban ridesharing in the city, if it takes effect.  That oridinance does not outright prohibit ridesharing, but limits each company to 150 passengers/drivers on the road at once.

Minneapolis, Minn. in Feb. 2014 announced it would ban/ticket any Lyft drivers who did not file for expensive taxicab licenses and would do likewise for participants in any other popular ride-sharing service.

Taxicab protest
Taxicab unions protest against Uber, Lyft, and Sidecar in San Francisco -- unregulated by the government, means a product is unsafe, they say. [Image Source: AP] 

In New York City -- where taxicab licenses ("medallions') cost up to $1M USD -- crackdowns are also picking up steam.  Efforts are also under way to ban the services in Las Vegas, Nev., Washington D.C., Chicago, Ill., and Cambridge, Mass..  In short the number of cities where paid carpoolers can legal operate is dwindling at an alarmingly rapid rate.

At this point quite literally the risk of carpooling is becoming that you will get your car impounded/seized and be forced to pay steep fines.

IV. California City Officials: If Paid Carpooling is Allowed Taxi Businesses Will Fail

But perhaps the most dire sign for Uber, Sidecar, and Lyft is that in their home state -- where they supposedly "won", local officials are threatening to do what state officials would not -- ban ridesharing.

Officials at the San Francisco International Airport in April 2013 banned the ridesharers from picking up or dropping off passengers at the airport.  

In June 2013 Los Angeles also banned ridesharing.  Los Angeles Yellow Cab manager William Rouse was elated at America's "captialist" system disallowing competition via strong-handed regulation.  He comments:

These rogue taxis are bypassing all safety regulations created to protect riders and drivers. Not only are these high-tech bandit cabs unsafe, they are breaking regulatory standards and disenfranchising safe, legal taxi drivers.

Lyft Lands
Lyft landed in LA -- and was promptly ordered to get out. [Image Source: Lyft]

And in San Francisco this month, city officials and taxicab drivers were eyeing a knockout blow to the carpoolers.  Comments Supervisor John Avalos:

We’ve gotten to almost a crisis mode.  We cannot let [the taxicab] industry fail.

Mark Gruberg, a spokesman for United Taxicab Workers, claims that carpoolers are a menace to society, stating:

People are being injured while they are fiddling, and their rules do not protect the public.  These are taxicabs in every sense of the word.

Lyft is banned
Lyft is too successful a business to be permitted, regulators argue. [Image Source: SF Examiner]

Critics are using a New Years Eve incident as a rallying cry.  On Dec. 31, 2013, a 6-year old in San Francisco was struck and killed by an Uber driver.  The driver was not transporting anyone at the time, but taxicab unions and the city departments that profit off them have gleefully seized upon the death as evidence that carpooling is "unsafe".

V. Taxi Business Owner Compares Carpoolers to Napster, Implies They're Stealing and Killing

Atlanta, Geor. Checker Cab owner/CEO Rick Hewlett writes in an op-ed:

Government has no more important responsibility than to provide for public safety, and many of our laws are for this purpose, including regulations covering vehicles for hire.

Because there is a clear potential for harm to life and limb when individuals are transported in automobiles by strangers, the reasons for regulating vehicles for hire, such as taxicabs and limousines, are obvious and crucial. Accordingly, there is a compelling need for government oversight and standards pertaining to all aspects of the vehicle for hire business.

Yellow Cab
Cab unions say if cities allow a free market and allow citizens to use their cars for carpooling businesses, they won't be able to stay in business. [Image Source: LA Times]

Chris Dolan, the San Francisco lawyer who is suing Uber over the New Year's Eve death comments to Mr. Hewlett:

New technology does not eliminate well-established legal principles.
Uber accident
The Uber driver's New Year's Eve accident may have given taxicabs unions and their government buddies just enough PR firepower to kill the ridesharing market. [Image Source: SF Chronicle]

But if carpooling is illegal, the question becomes where should the government stop.  After all, what about a roommate who gives you money for a ride to the grocery store?  What about a group of friends who pool their money to go to a concert?  If app-connected carpooling is illegal, aren't those people also breaking the law?

Mr. Hewlett didn't write about such examples, but he did compare Uber, Lyft, and Sidecar to Napster, the infamous P2P company that based its business on stealing musicians' copyrighted work.  

Will Lyft and others be destined for a slow, sad ride into the sunset? [Image Source: Lyft]

No matter how crazy that comparison it is, it's not atypical.  Ride sharing and carpooling for pay in the U.S. -- once a booming field of dreams -- has been methodically shut down and beaten back by the loving hand of government regulators and taxicab industry.  Thanks to those cartels, this once thriving sector is now on the death's door, as the nation's top cities approach a ubiquitous ban on sharing, which they say is anything but caring.

Sources: SF Examiner, Lyft and Sidecar, Fox News, California Public Utilities Commission (CPUC) [PDF]

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RE: Seize your car?
By JasonMick on 4/6/2014 4:52:09 PM , Rating: 5
Your xenophobia is hilarious. How dare those immigrants come to our country and get jobs driving people around?
You couldn't be more off base. I'm a strong support of diversity and the right to immigrate -- a foundation of this nation.

Exactly where did I say immigrants should not get jobs or that I opposed immigration??

I support immigration. I don't think you have to oppose immigration, just because you believe that employees in occupations that require a lot of human interaction should have reasonable proficiency in the language of the land.

If I moved to Sweden, I'd expect people would be irritated at me if I became a taxi driver and didn't bother to learn the local language fully.
Earning money for driving people around should be reserved for internet startups and rich white people with free time on their hands
Again you're making ridiculous leaps from what I actually said. What does being white have to do with speaking English and being friendly and approachable?

I know plenty of African, Asian, Hispanic, and people of a variety of other ethnicities who can all speak English clearly and interact with people in friendly fashion.

It is entirely accurate that my opinion is that human services jobs are best staffed by citizens who have strong conversation skills in the primary language of the land. However, I have no biases when it comes to the race of the employees. To suggest otherwise is a pure bullsh-t.

In the U.S. the primary language is English. If you can't speak English well (which is true of at least a third of the cabbies I've encountered personally) I'd advise you not to take a job that requires a high level of banter and interaction skills i.e. the transportation sector.

It'd make a lot more sense to go to technical college and go into IT or some other job that requires less human interaction, giving you the time necessary to learn the language of the land and properly immigrate.

Do you honestly think that's it's xenophobic to want people to proficiently speak the majority language of their nation of choice?

If you think that's unreasonable, too bad I guess, because most people around the world think you're wrong.
Why should we prevent the average Joe from using his minivan as a bus? Why should we prevent any average man with a hammer from being a carpenter? Those laws are just there to protect carpenters.
Really, you believe the government should ban people from using hammers to do their own carpentry?

That has to be one of the most alarmingly outlandish statements I've ever read here... and that's saying something

It appears you are truly insane.

People like you make me worry about the country.

RE: Seize your car?
By Mr772 on 4/7/2014 12:37:20 PM , Rating: 4
Jason you just fell prey to the typical liberal\progressive attack strategy. Insult you, lie about what you said and use abusive language in the process. Saul Alinsky playbook 101 followed perfectly. Xenophobe is one of their favorite name calling cards. They come out of the wood work when you question the government controlling every part of your life, or trying to suck every penny out of you to line the pockets of their friends and supporters.

RE: Seize your car?
By xti on 4/7/2014 12:42:54 PM , Rating: 1
It is entirely accurate that my opinion is that human services jobs are best staffed by citizens who have strong conversation skills in the primary language of the land. However, I have no biases when it comes to the race of the employees. To suggest otherwise is a pure bullsh-t.

In the U.S. the primary language is English. If you can't speak English well (which is true of at least a third of the cabbies I've encountered personally) I'd advise you not to take a job that requires a high level of banter and interaction skills i.e. the transportation sector.

interaction is optional with a cab driver. You give them the address or the passenger punches it in the screen and then the driver starts driving.

They dont have to ask about your trip the same way a hairstylist doesnt havent to ask you about how crappy your day is.

The problem is everyone overcomplicates everything now a days. Now we have to make sure our drivers can understand english? This is a cab driver, they aren't running your portfolio.

Just know what stop/green-yellow-red/ main street means, take me there, take your 10 bucks from me and that is all I really need you for.

You may know a bajillion people of hundreds of different races or creed, thats great. What no one ever states is that they know a family who doesn't know a lick of english but they can see they use every resource, energy or ounce of intelligence they have everyday to make up for the social handicap. Let alone say that it is admirable.

believe me, if they were given an option of what nationality vagina they wanted to be pushed out of,they would have all said 'merica.

RE: Seize your car?
By MrBlastman on 4/7/2014 2:54:57 PM , Rating: 4
Don't you DARE try to screw in a lightbulb, Jason! Didn't you know you NEED to be certified to do that? They are hooked up to electricity for heaven's sake! You might get electrocuted or worse, slip on your footstool and injure yourself!

Call your electrician immediately! He needs to be licensed, bonded charge a minimum fee of 350.00 for the service call. But no worries. Your lightbulb will be replaced perfectly with no risk to yourself and you can go about your day focusing on more productive things...

... Like figuring out how you're going to pay a damn electrician 350.00 to screw in a ten dollar bulb.


Nanny-State mentalities are scary.

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