Councilor: Time for city to regulate ride-share companies

City Council President Bill Linehan says it's time to bring companies such as Uber and Lyft under the same sort of regulations already that taxi and pedicab operators already have to follow.

On Wednesday, the city council considers a request from Linehan for a hearing on how to give city regulators say in the operation of the new services:

All Taxis and Pedi-cabs in the City of Boston are regulated, for purposes of consumer protection and public safety, by the Hackney Carriage Unit of the Boston Police Department and licensed by the Commissioner of the Boston Police Department under the authority of Chapter 392 of the Acts of 1930, and;

Transportation applications such as Uber and Lyft have been operating within the City of Boston for several years, competing for a substantial share of the city’s transportation services.

The city council's meeting begins at noon in its fifth-floor chambers in City Hall.

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Comments

We demand opportunities for

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We demand opportunities for graft and power! KNEEL BEFORE THE MIGHTY COUNCIL AND DESPAIR!

Because a 21st century city needs to stamp out innovation with regulations from the 1930s.

Next thing you know the city will want to bring back Prohibition. "For the Children!"

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Yes, innovation!

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Starting a company where the owner openly disdains both his customers and especially the people who stick their neck out for him financially every day who helped him build his garish man cave offices!

Inflating the value of a company that has little to no physical assets to placate the people who invest in you!

That's innovation!!

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Really?

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Maybe you missed the part where Uber is valued at 18 billion without owning a single vehicle? I'm sure even Eddie Tutungian would not claim to be worth that much without at least a couple of cabs being physically owned.

So what?

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Who cares whether they own a vehicle or not? They own proprietary software and a distribution network that cab companies don't own. Uber isn't "claiming" to be worth $18 billion, those investing in the company are saying it's worth $18 billion.

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uber rules!

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I've been taking uber for a few months now....about twenty rides and not one dirty car or driver hustling me for a tip or a cab that doesn't show up after twenty minutes. Of course we can't let this continue!

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Great idea

The current system works so well for taxis! The BPD Hackney division has taken action every time I report a cab for refusing me a fare home and everything! *endsarcasm*

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Curious. Are existing cabs

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Curious. Are existing cabs more accessible than uber? Seems like an iphone app with accessibility features would actually be easier. plus uber calls you when they arrive and they are generally more spacious without the glass divider..

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WAV

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Accessibility for the handicapped includes wheelchair access. Cab companies with at least 15 cabs in their fleet are required to provide at least 1 WAV (wheelchair-accessible vehicle) 24/7 to comply with hackney regulations.

Uber doesn't own a single vehicle...so it doesn't have to provide jack shit when it comes to wheelchair accessibility.

Sure

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I'll give you that. Some minimum number of vehicles should be accessible. But ONLY if we get meaningful cab reform so that taxis offer the same level of service as rideshare services.

As a guy who takes a ton of cabs, Uber is far too good to let dinosaurs like Linehan ruin. He doesn't care about accessible cabs, or affordable cabs, safe cabs, or accountability for drivers, or cabs that serve all neighborhoods equally, or drivers making a living wage. He just cares about fighting change and keeping his old white constituents happy at the expense of everyone else.

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Bingo!

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Right now the only affordable option is The Ride, which works if you are going where there is a T route. Also, The Ride isn't always the most reliable service.
Otherwise, you have to pay a great deal of money for a private chair car company.
Not many can afford his/her own accesible vehicle and would still more than likely need a driver.

Ride-sharing would be amazing!

Meh...

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That shouldn't be regulated by government. If there's a need then I'm sure Ãœber and it's drivers will fill it.

Making sure there are rides

Making sure there are rides for those with disabilities is exactly the kind of thing that government should get involved in. That's an area the market won't reach. The ADA happened for a reason.

Why? How?

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Uber doesn't care which drivers it has on staff at any given time nor what type of capacity they bring to the table. Uber can't make any of their contractees take a ride if they're off the clock currently. If one day all Uber drivers decided not to log in, Uber would be blank in that city.

So, how is Uber going to fill a need for wheelchair accessibility on its own? And if it's only one person a day who needs it, then how do they make certain at least one of their drivers that's logged in can handle a wheelchair? There's no way and why would they care if ONE fare all day can't be served?

This burden right now is on

This burden right now is on the drivers. If Uber could give an incentive to drivers to purchase a van with a wheelchair ramp, it'd be great.

Maybe we should have a

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Maybe we should have a hearing to change Chapter 392 of the Acts of 1930 to be more inline with modern transportation needs and technology. Just a thought.

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It's very telling that the

It's very telling that the antis almost never want any constructive regulation (such as insurance floors, driver vetting rules, etc.) but rather want to simply regulate away Uber/Lyft's business model completely.

I'm still waiting for the antis to explain what's wrong with coupling Uber's business model with requiring a certain amount of insurance (comparable to what taxis are required to carry), driver vetting rules (comparable to what taxi companies have to do) and so forth and let the now equally-protected customers decide what services they want to use and when.

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Sure

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You can say that now...but that's just because you haven't succumbed to botulism yet.

Clarity of what's being discussed please?

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Adam, is he truly speaking about "ride-sharing" or Uber in general? People need to remember to make the distinction. Uber started with black car service that you basically reserve minutes before you want the ride. It'd be no different if you called a limo company and they could take you on the spot and sent a driver around. Uber just agrees that the limo drivers will let them know when they're available for these types of quick-hit rides that won't garner them as much money as a big-time client, but will fill their down time while waiting for their next client pickup.

Now, whether black car drivers are making Uber their exclusive option or not is immaterial. The point is that they are registered livery drivers acting as limo-on-the-spot and there's nothing different about anyone using Uber like that or having a dedicated limo service pick them up whenever they want.

Uber also runs Uber-X "ridesharing" service where the drivers aren't limo drivers, they're just anyone. Whether their car is registered as livery or they work too many hours or anything else that completely ignores hackney law/regulation, Uber says it's none of their business. And maybe it isn't and maybe it should be or shouldn't be. However, these are where we reach a dangerous tipping point of public safety and regulation versus free-market capitalism.

For all its faults, the medallion system was instituted for some really good reasons. First, if anyone can just go be a cab, then everyone who doesn't have something better to do might go be a cab. That means an influx of supply and a complete bottoming of rates (there's no longer a standard rate either, since you don't have to listen to hackney law). Great, right? Wrong. If you can't even make gas money because there are too many cabs trying to undercut each other, then drivers attempting to make a living start to drive more and longer hours. This leads to mistakes and accidents and people getting hurt. Another problem is that the medallion gives you a way to tie performance to the right to perform. If an Uber-X driver is able to lie their way through Uber's system or someone is able to spoof being an Uber-X driver, then they can violate the law (kidnapping, rape, etc.) and harm passengers. And to what recourse? Sue Uber? They just "contract" with the guy, he's the one that lied to the passenger he harmed. Finally, we do tax and regulate livery drivers differently because they are heavier users of the road as a function of their job. They add to idling pollution and traffic. If these drivers are allowed to just drive around looking for Uber-X jobs all day without having to get a livery plate, then what's the point of having a livery plate?

Doing something simple like adding a city regulation that says that the "contractor" has to confirm that its drivers abide by all laws and meet insurance requirements (something Uber has already taken steps to do on its own for fear of pissing off too many legislators) will put some of the liability on Uber who enable these Uber-X drivers to be out on our city streets with limited vetting and without any interest in whether doing so will harm the public interest in any way (be it physically, economically, or even ecologically).

Now, all that having been said, I think the medallion system has lots of problems, like not having the number of medallions tied to the population rate so the number of medallions per capita remains close to constant. The fact that the "medallion owners" aren't the drivers is also a problem that allows for rampant corruption too. So, our councilors should be going after reforms in both sets of rules equivalently.

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Speaking of clarity...

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For all its faults, the medallion system was instituted for some really good reasons.

Protection of politically connected operators' income, mostly.

If you can't even make gas money because there are too many cabs trying to undercut each other, then drivers attempting to make a living start to drive more and longer hours.

Does not compute. If you cannot make gas money doing this, then it's unsustainable to work longer hours. You'll just lose more money. Negative cashflow does not turn into positive cashflow just because you're out there longer, because if you're constantly driving around, then you're effectively saying "more time spent = more gas spent".

Actually, the current medallion system and the structure of having owners be separate from drivers is what's causing taxi drivers to overwork. Because they have to pay a fixed cost per day to take out the vehicle, they have to make that up. And since it is a fixed cost, it is effective to work longer hours in order to pay it off.

At least with the UberX system the drivers can pick and choose their hours and it does not work against them. I try to ask every time I use it how the driver feels about the system, and the most common response is: it gives them freedom of schedule.

Another problem is that the medallion gives you a way to tie performance to the right to perform. If an Uber-X driver is able to lie their way through Uber's system or someone is able to spoof being an Uber-X driver, then they can violate the law (kidnapping, rape, etc.) and harm passengers. And to what recourse? Sue Uber? They just "contract" with the guy, he's the one that lied to the passenger he harmed.

I don't see how a medallion protects you from any of this. A medallion is just as easily spoofed. Maybe more so. I feel more secure even in an UberX, a SideCar, or a Lyft because everything is tracked. The vehicle that shows up is the one I know about specifically. I am expecting a particular driver whose picture and name I have. Both of our smartphones are being GPS tracked. I know exactly what route the driver is taking and I can watch it on the map. If I disappear, there's an easy digital trail to follow. Whereas, in a cab, nobody knows anything about my whereabouts. And we have seen many cases over the years of cabbies doing terrible things.

Finally, we do tax and regulate livery drivers differently because they are heavier users of the road as a function of their job. They add to idling pollution and traffic. If these drivers are allowed to just drive around looking for Uber-X jobs all day without having to get a livery plate, then what's the point of having a livery plate?

I think this is a bit of a specious argument. There's nothing preventing you from driving around all day in your own private car, adding to idling pollution and traffic. At least the ride-sharing drivers are doing something useful and actually making the whole system more efficient. A taxicab or a ride-sharing vehicle that is used by many people each day is much more efficient than a car that sits around in one parking spot or another for 95% of the day.

The proper way to deal with the pollution and the traffic is to charge any and all drivers a user fee based on their vehicle characteristics and usage. Examples include: ideas like "pay per vehicle-mile", factoring in per-axle weight (which is the biggest contributor to road damage), and rating the amount of pollution created by the engine as a cost-factor. In essence, the user fees should encourage more efficient usage of our limited road resources, and the emission of less pollution into the air (with the clean-up cost subsidized by the fees).

Doing something simple like adding a city regulation that says that the "contractor" has to confirm that its drivers abide by all laws and meet insurance requirements (something Uber has already taken steps to do on its own for fear of pissing off too many legislators)

I agree that the main goal of regulation here should be to create a level, safe playing field: everyone is licensed to drive, everyone has the standard safety training, everyone has their insurance up-to-spec, and that appropriate insurance is actually available. Taxicabs too -- remember, the insurance situation for them is really screwed up. We need regulation that does not cement into place one particular business model, nor one particular set of "oligarchs" like medallion owners, but rather a set of regulations that encourages competition and makes it relatively easy for newcomers to break into the business. Yeah, I know, that's exactly what companies hate: competition. And it would be just as bad if Uber was allowed to dominate the ride-sharing market just like the medallion owner cabal has dominated the taxicab market. But that's the role regulation has to take.

Response

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It's built into the gambler's fallacy. If I just roll the dice one more time, I'll win big. Just as you say that guys work longer hours in order to make up the cost of their medallion rental, guys will attempt to field more fares attempting to find the ones that put them above the cost line. For every $40 trip from Logan to Brighton, there's a $10 trip from Allston to Allston that actually gets you above the line. Also, if you work the day for the high demand, you might work the night for low supply to get yourself even. And yes, there's a bottom to how low the rates could go before nobody would do the work, where supply is self-limiting in an anything goes marketized rate and there was a bit of hyperbole on my part in my initial statement.

But let's look at some possible numbers. Let's say Uber-X prices its rates at a 10% profit above cost. Then, they take 8% of the profit leaving 2% of the profit for the driver. Someone who isn't driving to feed their family is going to be okay with that ("it's extra cash and I wasn't doing anything anyways and it's a nice day to drive") whereas someone who is feeding their family isn't going to be able to get by on that low of a margin. Now, who drives a cab when it is raining or snowing? Who drives you in the middle of the night when it's too inconvenient for someone to want to drive for just 2%?

I don't see how a medallion protects you from any of this. A medallion is just as easily spoofed. Maybe more so.

Because everyone has a metal punch in their house... Meanwhile, you rely on Uber-X's background checks to keep you safe. What goes into that? How is that regulated in case anything goes wrong? Oh, it's not? And I'm sure it's fail-safe...oh it isn't?

There's nothing preventing you from driving around all day in your own private car, adding to idling pollution and traffic.

Who has the specious argument again? Sure, you *can*...but nobody does (or the fraction of those that do are infinitesimally small). Meanwhile, if you are a livery, you're driving...to make money...so you drive more. It's in the definition. So, it's easy, if we want to regulate and maintain a separate set of registered cars whose purpose is to be driving around to taxi people, then we make a separate plate for them...and one for the regular users of the road. Don't like it? Then don't drive people around for money, because that's livery and so you need to register that way. I'd rather have kept my scooter on the road with a sticker as a "motorized bicycle" but they made a new class and called it Limited Use Vehicle and required a plate and insurance and everything else. So I stopped riding my scooter. Don't like it? Get Uber-X to work with you to change the law so livery plates don't exist or there's a ridesharing exception. But for now, you drive people for money, you get livery plates. There doesn't even have to be a reason (even though there are several including easier identification for hackney cops to know if you should be picking people up for money or not).

There are fixed costs and

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There are fixed costs and there are dynamic costs. For most UberX drivers that I've seen, the fixed costs are sunk costs (they already own the car ...) and therefore the profit they earn from responding to UberX calls is the revenue minus the dynamic costs (gasoline, mostly).

If revenue is less than the dynamic costs then there is no profit-motivated reason for the person to continue driving. None. Now, I'm not going to argue that everyone is a rational actor, and I'm sure some people might continue driving even though they are losing money. But eventually they will run out of money and stop. Or get wise, first.

This is in stark contrast to the taxicab system where there is a major fixed cost that must be overcome every day.

Now it is possible to claim that the UberX drivers also have a fixed cost that they must overcome: the amortized cost of owning the vehicle. For example, if someone buys a car only for the purpose of being an UberX driver, then you might reasonably claim that the amortized cost per day of owning the car is the "fixed cost" that must be overcome. And then they might be tempted to overwork.

And after having said all that, I do want to make clear that I do support hours limitations on work if that's what's necessary to make it safe. I forgot to mention it before. It's a quite common work regulation to appear in the transportation field, for example, with truckers, bus drivers and railroad employees. A certain amount of rest must be had each day, etc. The system of using smartphone apps makes this a bit easier to enforce, by the way, since usage can be monitored.

Because everyone has a metal punch in their house... Meanwhile, you rely on Uber-X's background checks to keep you safe.

Anyone with enough gumption can steal a cab, presumably. Or pry the metal plate off. Or just make one. It's not that hard. Or just rely on the fact that most people don't even check for the metal plate. Do you?

I don't rely on Uber's background checks to keep me safe. I didn't even say anything about that. I rely on the fact that everything is tracked. I know who's coming. I know their face. I know their name. I know where they're going. And so does Uber. Now you could make an argument that regulation should ensure that the police have access to the info when needed. And I would agree, modulo some basic civil rights protections.

So, it's easy, if we want to regulate and maintain a separate set of registered cars whose purpose is to be driving around to taxi people, then we make a separate plate for them...and one for the regular users of the road. Don't like it? Then don't drive people around for money, because that's livery and so you need to register that way.

That's not an argument from reasoning or fact, that's an argument from authority. I have no problem with having Uber drivers acquire livery plates -- as long as the barriers to obtaining such a plate are not too high. I have had several UberX drivers who had livery plates on their personal vehicles, and it didn't really make a difference to me. Frankly, I think your argument from authority is just regulatory capture masquerading as concern, and I don't like regulatory capture. But I'm willing to entertain alternative rationales...

I should also make it clear that I don't have anything in particular for Uber: they just happen to make a popular app that does this ride-sharing thing. I only started using it about 6 months ago. I would really like to see more competition in this space, and I think that once the regulatory situation gets sorted out, we will see more. There's not much barrier to entry, as dvdoff likes to point out, there's no physical assets to manage. Uber is acting as a kind of political lightning rod at the moment, and I find it interesting to watch how it plays out. I have also made an effort to try Side Car but it's been more difficult because of lower availability. Their model of ride-sharing makes it more difficult to find a reasonably priced ride because any significant amount of demand means that every driver is busy.

In general I find that arguments against ride-sharing fall into three camps:

1. Taxicab medallion owners who (naturally) hate competition and are protective of their cartel.
2. The application of double-standards: treating ride-sharing vehicles differently from taxicabs or private vehicles (depending on the argument).
3. Fear of change.

I don't think anything that falls into these categories are valid arguments in the public interest. For example, when people argue against UberX for the reason that UberX drivers might be unsafe on the road, that's a double-standard. The fact is, there are many drivers who might be unsafe on the road, and I'm worried about all of them -- UberX, Side Car, private or anyone. The fact that certain people will attack UberX drivers, while at the same time giving private drivers a pass on bad behavior, reveals to me a hidden agenda that I find objectionable. It's that unfortunate American attitude: private car ownership is normal, protected, and free from consequence regardless of outrageous behavior, that I find to be absolutely atrocious.

Beaten most of this to death

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However, the binning of arguments doesn't exactly allow for a lot of discussion and makes it easy to erect a strawman to destroy each in turn.

I think the problem with calling me a concern troll over double-standards is that there were very valid (and continue to be valid) reasons for a medallion (or a licensing) system that maintains enough cabs but not too many cabs on the streets. On top of that, hackney regulations concerning the charges per distance and quality of the vehicles are all part of the current system that doesn't apply to Uber. The magical sauce behind "surge pricing" should be enough to tell you that if every cab company were allowed to do it whenever they wanted according to their own definition of "limited supply" there'd be public outrage. Uber relies on the fact that they can tell you to "go take a cab if you don't want to pay our prices" because cabs are regulated and have the same rate no matter what.

Another double standard I've seen raised here recently: Cab companies with at least 15 cabs have to have at least 1 wheelchair-accessible cab (WAV) that's available 24/7. Uber? Not so much.

Another double standard: try to pay for your Uber ride with cash. Whereas there are laws that say a cab has to take cash or credit, there's no such thing for Uber. So, no credit? No problem, get a cab but don't call on Uber. Which is funny, because in countries where people don't have use for a lot of credit cards, Uber is experimenting with taking cash...but not in the US.

Another double standard: If an Uber driver doesn't want to go to East Boston late at night, he doesn't have to agree to take your fare and it's totally legal. If a cabbie does the same, it's illegal.

So, to say that arguments of double-standards are just concern trolling because the same people aren't arguing that *everyone be a better driver* or whatever other dismissals you come up with is far too simplistic. We leverage the medallion system to the benefit of the public even if we're piss poor at keeping it up-to-date and uncorrupted by those that have been able to consolidate the wealth and power in their fiefdoms of the system. Uber doesn't care about the public (and to here some talk about it, their drivers). There care about valuation, profit, and therefore indirectly their customers....at least those that can even fit the definition of their customers.

EDIT: And just to be clear, I want Uber and even Uber-X to be an option for people. But we have to do it right. Unregulated corporations have zero reason to care about what or how they operate if it means they can provide a better bottom line for themselves. Regulation is important and bringing Uber under many of the same requirements as the hackney regulations provide for us is important while also allowing their model to compete directly with the fiefdoms of the cab industry and help disembowel the medallion ownership and corruption inherent in the current system.

However, the binning of

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However, the binning of arguments doesn't exactly allow for a lot of discussion and makes it easy to erect a strawman to destroy each in turn

I'm just trying to save time. You can review your own arguments to see if they fall into the bin, and then you'll already know my answer.

I should have been clearer. Those are the 3 categories of "bad arguments" in my view. There are good arguments for certain kinds of regulation. I hope I've made that part clear already, but if not, I've said it again.

The magical sauce behind "surge pricing" should be enough to tell you that if every cab company were allowed to do it whenever they wanted according to their own definition of "limited supply" there'd be public outrage.

Why? Nobody has to ride Uber, a cab, or anything. It's not required by law, nor is it a necessity for life. I don't understand why people complain about surge pricing. I think people who complain about it are just being silly. If the price is too high, here's an idea: don't use it. That's what I do. Uber has chosen to make their number one priority be availability instead of price. That's a perfectly acceptable position to stake out! And guess what: some of their competition has decided to go the opposite route and explicitly advertise that they do not do surge pricing. Great for them too. That's the way it's supposed to work.

People who complain about surge pricing are acting as if Uber was some kind of entitlement. It's not. Heck, even public transportation agencies sometimes use "surge pricing" of a form, e.g. rush hour fares in Washington D.C. If a regulation was based on resentment over surge pricing it would be bad public policy, and bad for consumers.

Cab companies with at least 15 cabs have to have at least 1 wheelchair-accessible cab (WAV) that's available 24/7. Uber? Not so much.

I agree, there should be accessibility, and this is a reasonable place for regulation. I don't know how it would work, but I'm open to hearing ideas.

Whereas there are laws that say a cab has to take cash or credit, there's no such thing for Uber. So, no credit? No problem, get a cab but don't call on Uber.

Sounds reasonable except I have no idea how it would work either. For me, the big advantage of Uber is that you don't pay cash. Once you get cash involved, you start having the problem of untracked transactions, which undermines the whole system. As I mentioned earlier, I greatly prefer the fact that Uber rides are digitally tracked, and I find that to be a big advantage over traditional taxicab service.

If an Uber driver doesn't want to go to East Boston late at night, he doesn't have to agree to take your fare and it's totally legal. If a cabbie does the same, it's illegal.

Hah. And you think that cabbies never refuse fares? So much for that.

I have not had an UberX driver refuse my fare. I don't know if that happens, or how it would happen. I do know that Uber uses a rating system for drivers, and I would give the lowest rating to any driver who did that. I also know that Uber has had excellent customer support in the times that I have used them thus far. Neither of those is a guarantee that my fare will not be refused. However, it is far more than I would ever get from the traditional hackney system, and it is a problem that is alleviated by introducing further competition into the market -- not by restricting it.

I have had a Side Car driver refuse my offer, but that's how it's supposed to work. You choose a driver, make an offer, the driver decides whether or not they would like to do it. In other words, a market place.

So, to say that arguments of double-standards are just concern trolling because the same people aren't arguing that *everyone be a better driver* or whatever other dismissals you come up with is far too simplistic.

I wish it were too simplistic, because everyone who thought of those arguments would realize how wrong they were and would never even bother raising them in a public forum.

But since I have seen people actually make those ridiculous claims, they need to be countered.

And just to be clear, I want Uber and even Uber-X to be an option for people. But we have to do it right. Unregulated corporations have zero reason to care about what or how they operate if it means they can provide a better bottom line for themselves.

I completely agree. There is a place for well thought out regulation that protects the public, provides accessibility, and fairness for drivers and passengers. The problem thus far has been that most people's calls for regulation are not well thought out. Many of the calls for "regulation" come from taxicab medallion owners who are just looking to abuse the law as a means to protect their own private profits. Another set of false calls for regulation come from people who are upset at the idea of anything beyond "1 person 1 car" culture. There's also a loud group of sour people who, for some reason, throw childish tantrums about surge pricing. And then there's the usual hatred of anything different or new.

I am all about clearing out the corruption in the hackney system, and I'm glad to see that ride-sharing companies seem to be finally making a dent in it. I am wary of duplicitous calls for "regulation" that will just create a new system of corruption and poor public policy.

PS

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http://www.nbcbayarea.com/investigations/Is-Uber-Keeping-Riders-Safe-256...

Another great list of people who were drivers that passed Uber-X's background checks despite their list of recent convictions including a driver without a valid license.

If a taxi company were to hire a driver that violated regulations, there would be hell to pay. However, when Uber faces these problems, it falls back on the canard that it's "just a technology company" that makes a cool app and not a transportation company. That kind of bullshit chicanery is exactly why better regulations are needed. You're putting faith in Uber to be a good player as the "contractor" of all these drivers, but there's evidence they aren't, that they're profiting from not being a good player, and that at the first sign of trouble, they deflect all blame and run and hide. Matthew, you'd be the first to stand up and say that companies shouldn't get away with leaving it's "employees" and customers high and dry...but you give Uber a pass on all of that? Just because you've had better experiences with Uber than with Boston cabs?

This is basically what I said

This is basically what I said a few months back but was called a shill for cabs (couldn't be further from the truth) and anti-Uber (I'm not at all, I use it) by some commenters. Kudos to you. This doesn't have to be a zero-sum game. Uber is a great product but has issues that need to be resolved as well as you articulate.

Which regulations?

The pro-consumer sort of regulations the taxi cartel fights tooth-and-nail, or the corrupt good-ol-boy regulations they love?