In cities in the United States and around the world, people are discovering a welcome alternative to costly, unpredictable and inconvenient taxi cabs. Car-for-hire communications companies like Uber and Lyft enable people to use their smartphones to arrange and pay for affordable limousine (“black car”) service or else get a cheap lift (“ridesharing”) from private drivers who have passed the companies’ background checks. The companies are a godsend to car-less urbanites, make more efficient use of vehicles on the road and are a welcome source of income for drivers.
Despite all the “winners” from these services, there are some politically well connected losers: taxi cab companies. Decades ago, those companies worked with state and local governments to establish a licensing and regulatory system that makes their business model the king of the road. As a result, taxis can overcharge passengers, under-serve certain communities and give unpleasant rides to customers without the cab companies having to worry about competition from other business models. Now, by helping customers connect easily with black cars and private ride-sharers, Uber and Lyft are forcing the cab companies to do a better job at a lower price.
And the cab companies are fighting back, with help from the politicians. For instance, in Annapolis — a city where ridesharing would be especially useful both to get people around town and deliver them to Baltimore, Washington and Ocean City — Mayor Mike Pantelides recently announced that the city will fine any driver using Uber’s communications services. This comes on the heels of last summer’s attempt to regulate such companies like taxis statewide, under the auspices of the Maryland Public Service Commission.
Some people may side with the mayor, saying that though Uber and Lyft conduct background checks on drivers, gather customer feedback and keep records of transactions, some form of government intervention is also needed to keep customers safe. Perhaps that’s true, but Mr. Pantelides and other politicians specifically demand that all cars for hire follow the taxi cab business model. They prohibit other models that are less expensive, more flexible and — judging from Uber and Lyft’s popularity — preferred by many customers.