Breaking in to the market of ride-sharing and private car service dispatch is quite the challenge. Uber, the vanguard in this space, is learning the hard way just how much most cities are resistant to change, but the company doesn’t seem to mind too much. Or if they do they’re hiding the frustrations pretty well. The latest speed bump comes from the California Public Utilities Commission which has issued a $20,000 fine against Uber and two other companes – Lyft and Sidecar – for "public safety violations." The CPUC is claiming that these services do not have the proper licensing in place to prove that both the company and the drivers are properly licensed and insured. Not surprisingly the companies are challenging the claims. An interesting story to keep an eye on…
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Uber is running into similar speed bumps here in Chicago. Though recently they managed to pull together 5500+ signatures to challenge proposed regulations that would shut them down in the Windy City. I’m keeping a close eye on this as well since I just discovered the service and love it!
http://blog.uber.com/2012/11/01/uberchilove/
When presented with a competing product that is favorable to consumers in an established market, one must regulate!
And since Uber doesn’t operate their own vehicles, but only existing licensed vehicles, the lack of licensing and safety concerns are pretty silly on-face. If the cars are unsafe that’s an indictment of the status quo regulatory regime, since the cars are already out there operating. Uber is simply a mechanism to make better use of underutilized resources, the downtime that cars face. At root it’s just matching software that helps customers find rides.
It is not clear to me what the licensing requirements are, Gary, but when they act as a dispatch company – which is what they are doing – then I’m not surprised that they’re being required to document the insurance of their fleet. The cars may be insured but if Uber isn’t properly documenting that I can understand the CPUC’s concern.
There is a happy medium between regulation, and NO regulation. That is what we are seeing the market react to now. Unregulated free markets are NOT a cure-all. Just like private industry overreaches often, government also does. Unfortunately, we don’t always have the most up-to-date individuals inside government, as much of the attraction of public service has fallen by the wayside, and there is a great lag before some regulators are able to understand the complete picture of what they are, or should be regulating. Sometimes the market itself doesn’t know its product, and there are multiple solutions searching for problems. The world isn’t perfect, not even close, but respectfully to some peoples beliefs that doesn’t mean that we should throw away all rules and safeguards and allow anyone to do anything they want.