Why the Government is the Taxi Industry’s Worst Nightmare
Forget what you’ve heard, or what think you know about the “taxi vs ridesharing” battle.
You see, most people have a skewed perception of how the taxi industry works, and why.
They seem to have a clear misunderstanding of the wishes and desires of cab drivers (and owners) when it comes to regulating ridesharing; or a misunderstanding of the government regulation of transit in general.
As the owner of a small taxi company, allow me to tell you something firsthand: The government is no friend of ours, and companies like Uber aren’t necessarily a boogeyman that hides under our beds.
The government does not “shelter” cab companies; and the government does not create taxi monopolies. The government, however, costs us far more money than we (or they) care to admit, and the government regulates us without having half of a clue how we operate, or what the needs of the community are on the ground.
We despise the government, and we despise their often outdated and irrelevant regulations. If the government would get out of the way, taxi and rideshare companies could compete healthily… even coexist.
There are a select few taxi “kingpins” and loud-mouthed taxi unions that put forth opinions and industry assessments that are actually a far cry from what most of us want.
For now, though, let’s ignore them. You’re better off talking to small and medium sized cab companies, and their drivers. Most of us don’t belong to unions, and we hate everything they stand for and do to the industry (but that’s another conversation entirely).
The truth is that most of us couldn’t care less how or why Uber or Lyft operates; however, the problem we face is that we aren’t allowed to operate in the same way, even though we provide the exact same service.
It’s not about the “app”, It’s not about “technology”, it never has been! It’s not about the competition or even the vehicles.
We are not backwards, incompetent hillbillies that are oblivious to the modern world. Cab companies can (and often do) develop their own apps and websites, drive newer, nicer cars, etc.
Frankly, they can compete without apps too; when they’re allowed to.
The problem is that they are not allowed to… courtesy of the government.
In most cities, taxi companies aren’t even allowed to set their own rates!
In some cities, even vehicle types, company names, logos, top lights, etc. are regulated.
Costly and often pointless vehicle inspections and emissions testing (which bring their own set of problems) are often required. There are even a handful of cities that still require driver physicals! That’s on top of the – sometimes costly but required – background checks; throw on top of that: Fingerprinting, commercial insurance minimums, mandated meters and programming (pricey in and of themselves, especially for small companies), not to mention local sales taxes and more.
To add insult to injury, taxi companies are usually bound by minimum wage laws, worker’s compensation (which is redundant, since we’re required to carry insurance on the vehicle and driver) and unemployment insurance taxes.
If any of you think we want any of this nonsense, you’re seriously mistaken. Our biggest problem with ridesharing companies is not the ridesharing companies; it’s the government handcuffing us with these regulations and expenses to the point where we cannot compete financially.
Uber is a multi-billion-dollar company that skirts all of this and more; based on an absurd technicality.
This is the complete farce of the concept called “ridesharing”, It is, at it’s core, no different than what we do.
Please, for the love of all that is libertarian, listen to me; the vast majority of us don’t want Uber and Lyft “banned”! The only reason we want them subject to any regulation at all is that we’re being cheated, restricted, and forced to follow regulations (and pay egregious amounts in expenses) that our competitors are not.
We’re angry and fearing for our livelihoods because Uber is pushing lawmakers to bend the rules for them (and succeeding in doing so), but those regulations are not being equally bent for us.
Contrary to popular belief, the solution most of us hope for is for complete deregulation of the transit industry in general.
Most of these regulations are absurd to begin with. The industry itself has many checks and balances.
My wife and I are lucky enough to operate in Laramie, Wyoming, which not only has very few regulations (thus allowing the market to play out as it should), but also has a very small revenue base that forces us to be on top of our game; or risk being put out of business by our competition.
We have demonstrated a number of things for nearly a decade; primarily, if price gouging starts happening, people will simply use other companies, or complain to the point where companies are forced to lower prices.
The same applies if companies operate unkept, unsafe, or otherwise terrible vehicles – or if their drivers are incompetent or unsafe; word of mouth is powerful and spreads quickly in a truly free market.
Quality and price controls take care of themselves. Commercial insurance companies have their own criteria for who they will and will not insure; this automatically takes care of many of the unsafe or egregiously bad drivers.
As far as minimum wages are concerned; when people aren’t getting paid enough by a company, they can easily quit and find better work, usually with another company; it’s as simple as that.
These are just a few examples of how the taxi industry can (and does) regulate itself when allowed to.
In our case, we have a relative stranglehold on the private taxi industry in our small town. Why? Because we’ve fought for it, with blood, sweat, and tears (literally, on all accounts). We’ve done the best we can with what we have available to us; that’s what we call a “natural” monopoly, and you know what: We’re proud of that.
If the government continues to handicap cab companies in other places though, it will create a “forced” monopoly overall, and that will trickle down to even our small town and affect small business.
It won’t be the fictitious “taxi” monopoly everyone speaks of; rather, It will be the rideshare monopoly. For everyone crying that the grass is greener on the other side of the fence: I think you’ll find that trading one assumed monopoly for a very real one, is not what any of you had in mind.
* Matthew Brammer is a musician, business owner, author, and admin of the Facebook page Rocky Mountain Libertarian. Originally a Boise, Idaho native, he now resides in Laramie, Wyoming.
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