If you haven’t heard of it, Uber is a smartphone-driven way for a person to summon a car, driven by an independent contractor, without the regulations (and fare structure) that come with the highly managed taxi industry. And it’s causing quite a stir in the Ocean State.
Taxis have been seen for decades as a public service, much like drinking water and electricity. The result of this regulation over the years is that taxis have many rules about how they should operate, including how automobiles in service should look, as well as how the driver should dress (sweat pants are not allowed).
The reaction from the taxi lobby to Uber – available now in 21 countries – has been to request – and receive – new regulation, including a $40 minimum charge for short-haul rides given by nontaxis, designed specifically to keep Uber from “seriously and perhaps irreparably [damaging] a much needed and crucial taxicab industry in Rhode Island,” according to testimony from the Division of Public Utilities.
Needless to say, not everyone believes that it is government’s role to intervene in a marketplace that is evolving to a more customer-centric model. And the proposed new minimum fare, which was to have gone into effect this month, has been put on hold thanks to a suit filed by four old-line car-service companies that would have been harmed by the fare floor as well.
The obvious answer for the taxi industry would be to take advantage of the same technology as Uber and compete on price, service and convenience. Asking the state for the equivalent of a bailout does not help Rhode Island shed its long-time image as an over-regulating foe of business innovation. •