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EDITORIAL: Giving competition a lift with Lyft, Uber

Ridesharing exposes restrictive regulation of the taxicab industry

- - Friday, June 13, 2014

London's famous black cabs snarled traffic last week to "go slow" to protest Uber, a ridesharing business based on the smartphone. The cabbies say Uber is unfairly cutting into business.

Until the protest, most Londoners had no idea they could download an app that enables them to book a ride from private drivers using their own cars, some of which are more comfortable than others. Uber reported an 850 percent increase in business. This wasn't what the traditional London cabbies were expecting.

Here in the United States, the success of competitive ridesharing upstarts upsets traditional taxi and limousine services, too. They're demanding protection by regulators. They're often getting it.

Earlier this month, the Virginia Department of Motor Vehicles ordered Uber and ridesharing rival Lyft to stop serving Virginians. The companies were fined $35,000 for failing to obtain the proper permits — even though the regulators haven't yet determined what a "proper permit" is. The regulators, as usual, haven't kept up with the times.

Owners of the private cabs, identified by a large pink foam mustache arrayed across the grill in the case of Lyft drivers, say that Gov. Terry McAuliffe and his administration harass Lyft and Uber because the companies are trying something new and different. Customers of the private cabbies have put in glowing reviews. A customer can order a Town Car on the way to dinner, or save money with a more modest car. Surveys suggest the public prefers the added convenience of options to traditional taxi service, which usually requires standing on a street corner waving a hand in the hopes of flagging a ride. Or they can call a cab with their cellphones, but there's a wait.

Regulators want to force compliance with their rules, and many of the rules are outdated. Police in Miami have been writing $2,000 tickets to Lyft drivers for operating a "for-hire" vehicle without a chauffeur registration and a for-hire license. The Pennsylvania Utility Commission proposes $225,000 in fines against Lyft and Uber for improper licenses and for operating cars for hire that haven't been inspected for safety.

A temporary court order in St. Louis bars Lyft drivers from the streets. Austin, Texas, officials ordered cars used for ridesharing impounded. Chicago seized cars of 16 Lyft, Uber and Sidecar drivers because they were "operating an unlicensed public passenger vehicle." Los Angeles, San Antonio, Kansas City and Ann Arbor, Mich., have prohibited smartphone ride-booking services. This pleases traditional car-for-hire companies whose taxicabs are regulated more strictly.

One resolution to the arguments would be the elimination of the taxicab cartels. Slashing red tape across the board would enable traditional car-for-hire companies to adopt new technologies and get relief from suffocating bureaucracy. Reducing taxes and fees would open innovation and competition, enabling consumers to have more and better options when they need to get somewhere in a hurry. Embracing innovation, not resisting it, is always the best option for everyone.