Seattle taxi commish on Uber: I don’t want to kill innovation but I do want to buy a year for taxis

posted at 10:01 pm on March 25, 2014 by Mary Katharine Ham

Liberals and Washington Post, meet regulatory capture. Regulatory capture, liberals and Washington Post. The fight in major metropolitan areas over Uber has instructed a new generation of liberals on this concept, even if they call it Stockholm Syndrome:

What started out as a fight over price and quality has turned into a fight to win the hearts and minds of regulators.

That fight took an ugly turn this month when Seattle’s Committee on Taxi, For-Hire and Limousine Regulations voted to limit the number of vehicles UberX and two similar services could operate to 150 each, down from an estimated 2,000 that had been in service.

Explaining her rationale for the vote, city council member Sally Clark, who chairs the Taxi Committee, explained, “No, I don’t want to ‘temporarily’ kill innovation, but I do want to buy a year for the taxi world to adapt.”

Clark’s rambling blog post and a subsequent one written after the vote give all sorts of explanations as to why it is in consumers’ best interests for governments to protect taxi and limo services from market competition even when every other business large and small must compete on its own merits. These include concerns over the training of drivers, adequate insurance, and protecting consumers from unfair pricing.

She also notes that most of Seattle’s drivers are immigrants. And those immigrants may have had to pay as much as $150,000 on the “gray market” for the right to operate for-hire vehicles, because, Clark notes without irony, Seattle hasn’t issued new medallions for over twenty years. (The City Council issued a moratorium in 1990). And anyway, she concludes, companies such as Uber have raised millions in “massively successful” venture financing rounds, suggesting, I guess, that they are all run by fabulously rich people.

The incoherence of regulators such as Clark isn’t much of a surprise. Like the taxi and limo drivers they oversee, the regulators haven’t had to deal with disruptive technological change for decades. The committee was created to protect consumers, of course, but after all this time working exclusively with the industries they regulate, it’s not surprising to find something at work akin to what psychologists call Stockholm Syndrome.

Ya think:

And it may well be that the same technology that makes UberX possible has also become a far more effective regulator than out-of-touch regulators. Consumers, not bureaucrats, rate the quality of the vehicles and the rides, and do so at the time of service, not at random checkpoints. The smartphone calculates the cost of the ride and takes payment, reducing the opportunity for drivers to cheat the rules. Constantly-updated data lets everyone know where traffic is worse, and when there are more drivers than passengers, or visa-versa, optimizing the number of vehicles on the road not once every twenty-four years but in real time.

Welcome, literal limousine liberals, to the downside of regulation. This is why Sen. Marco Rubio is making waves on this issue. “Technological disruption” is the gateway small-government drug of my generation. Com on in. The water’s fine! Rubio wants to thwart the powers that be in Miami and get Uber operating there. Smart. This ride home from the club brought to you by…your Republican senator?

Sen. Marco Rubio was looking to score a quick ride in Miami, but when he tapped his white Uber button on his smartphone, the Florida Republican came up empty.

“I was bragging to someone about this service in Washington and I clicked onto my app … and up comes a message saying, ‘Sorry we can’t pick you up in Miami because the county commission won’t allow it,’” he recalled.

That incident was the impetus for Rubio’s Monday visit to Uber’s Washington headquarters, where he used the struggle of a growing and fashionable tech company to underscore his case concerning overburdensome regulations.

“We should never allow government power and government regulations to be used to protect an establishment incumbent industry at the expense of an innovative competitor,” he said.

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Regulatory capture, liberals and Washington Post.

But you repeat yourself, twice, MKH …

ShainS on March 25, 2014 at 10:05 PM

OT what’s this about Pelosi and the dems going to force Boehner to allow a vote on amnesty tomorrow? Will Marco be supporting this effort? Then we can look forward to a bunch of illegals driving the uber cahs sans insurance et al.

AH_C on March 25, 2014 at 10:08 PM

Blue on blue violence. Pass the popcorn.

nobar on March 25, 2014 at 10:09 PM

Big gov types hate people and hate freedom and hate capitalism and hate competition …but love themselves some payoffs. Fck them.

CW on March 25, 2014 at 10:09 PM

OT what’s this about Pelosi and the dems going to force Boehner to allow a vote on amnesty tomorrow?

AH_C on March 25, 2014 at 10:08 PM

Report: House Dems Will Try to Force Amnesty Vote with Discharge Petition

ShainS on March 25, 2014 at 10:11 PM

Liberals against…
Liberals…

Reminds me of a Star Trek episode..

Where there was race with black on the right of faces against black on the left side of their faces….

Electrongod on March 25, 2014 at 10:11 PM

MKH, this might be a great article if only I knew what it was about.

Is there any background? History? What is UberX?

Should I not read things I don’t understand?

BobMbx on March 25, 2014 at 10:11 PM

Where there was race with black on the right of faces against black on the left side of their faces….

Electrongod on March 25, 2014 at 10:11 PM

“…Last Battlefield”

One of the best episodes.

BobMbx on March 25, 2014 at 10:14 PM

but love themselves some payoffs. Fck them.

CW on March 25, 2014 at 10:09 PM

At the end of the day, the only way any politician makes any real money, is through extortion. Yes, they love themselves some payoff’s.

oscarwilde on March 25, 2014 at 10:14 PM

…liberals always need ‘to buy time’…what else is new?

KOOLAID2 on March 25, 2014 at 10:15 PM

Uber will prevail — especially after these politicians start hearing from disgruntled voters who rely on Uber. Boston tried to screw with them and the Mayor did a quick about-face when citizens revolted.

dpduq on March 25, 2014 at 10:17 PM

…liberals always need ‘to buy time’…and they always want to but it on your dime what else is new?

KOOLAID2 on March 25, 2014 at 10:15 PM

predator on March 25, 2014 at 10:18 PM

There is a similar situation in Chicago, where the taxi industry is working to regulate competition out of business.

Taxi medallions in Chicago cost $350,000 a year. The city charges $50,000 for taxi licenses in Seattle.

bw222 on March 25, 2014 at 10:18 PM

“buy” it
*dammit*

predator on March 25, 2014 at 10:18 PM

Where there was race with black on the right of faces against black on the left side of their faces….

Electrongod on March 25, 2014 at 10:11 PM

“…Last Battlefield”

One of the best episodes.

BobMbx on March 25, 2014 at 10:14 PM

more like Republicans and Democrats

RonK on March 25, 2014 at 10:19 PM

She (Sally Clark) also notes that most of Seattle’s drivers are immigrants. And those immigrants may have had to pay as much as $150,000 on the “gray market” for the right to operate for-hire vehicles, because, Clark notes without irony, Seattle hasn’t issued new medallions for over twenty years (The City Council issued a moratorium in 1990). And anyway, she concludes, companies such as Uber have raised millions in “massively successful” venture financing rounds, suggesting, I guess, that they are all run by fabulously rich people.

Larry Downes, washingtonpost.com on March 24, 2014 at 9:40 AM

.
There’s your “money line” (no pun intended).
.
BTW, I’d not heard the term “gray market” before. I guess it’s apparent as to it’s meaning.

listens2glenn on March 25, 2014 at 10:20 PM

…liberals always need ‘to buy time’…what else is new?

KOOLAID2 on March 25, 2014 at 10:15 PM

.
As long as they’re not doing it with someone elses money, I don’t really— oh wait

listens2glenn on March 25, 2014 at 10:23 PM

“…Last Battlefield”

One of the best episodes.

BobMbx on March 25, 2014 at 10:14 PM

:)

Electrongod on March 25, 2014 at 10:26 PM

God help me, I do love living here (Seattle), but this kind of liberal insanity makes an early grave more of a sure thing. Sigh.

ugottabekiddingme on March 25, 2014 at 10:29 PM

Speaking as someone that drives a taxi, my concern with Uber and similar services is passenger safety. If the drivers are background checked and the vehicles are inspected, well, game on. It will hurt the individual taxi drivers and their companies, but competition is the organizing principle of the free market, right?

In my city, the process to getting a hack license is almost the same as getting a concealed weapon permit… Fingerprinting, FBI background check, no felonies, clean driving record, no DUIs in 7 years, plus, your car is supposed to be certified by a mechanic yearly, although some companies run some pretty ragged cars.

I might have taken 3 taxi rides in my life so I never really thought about it, but think about this… a girl gets dressed all sexy, gets wasted drunk at a bar, and tumbles into a car with a stranger… what could go wrong?

If any predator or parolee can drive a taxi, the public will pay the price…

PointnClick on March 25, 2014 at 10:35 PM

Speaking as someone that drives a taxi, my concern with Uber and similar services is passenger safety. If the drivers are background checked and the vehicles are inspected, well, game on. It will hurt the individual taxi drivers and their companies, but competition is the organizing principle of the free market, right?

In my city, the process to getting a hack license is almost the same as getting a concealed weapon permit… Fingerprinting, FBI background check, no felonies, clean driving record, no DUIs in 7 years, plus, your car is supposed to be certified by a mechanic yearly, although some companies run some pretty ragged cars.

I might have taken 3 taxi rides in my life so I never really thought about it, but think about this… a girl gets dressed all sexy, gets wasted drunk at a bar, and tumbles into a car with a stranger… what could go wrong?

If any predator or parolee can drive a taxi, the public will pay the price…

PointnClick on March 25, 2014 at 10:35 PM

This is a prime example of why licensing in so many industries is a result of rent seeking by established interests. You can turn around and say “it’s all about safety,” but who’s to say if services like Uber are safe if they aren’t allowed to operate at all?

In my hometown, to get a hack license, all you need to do is make your obeisance to the city commission, which takes all of about five minutes, and if you have a clean driving record, you’re in like Quinn. None of this “medallions” bullshit.

gryphon202 on March 25, 2014 at 10:39 PM

“…Last Battlefield”

One of the best episodes.

BobMbx on March 25, 2014 at 10:14 PM

:)

Electrongod on March 25, 2014 at 10:26 PM

When I think of progressives in ST terms, The Way To Eden comes to my mind almost automatically.

Mainly because to get what he wanted, Dr. Sevrin intended to kill the entire crew of the Enterprise, a plot point the wiki articles strangely fail to mention.

Progressives only put value on their own lives, in the end.

clear ether

eon

eon on March 25, 2014 at 10:40 PM

Our political parties had better start thinking about how they’re going to explain their purpose to the Millenials and the next generations. Dems will have a much harder time with this based on five generations of gummint hand-out spreading than a party who “says” they stand for limited gummint.

Creative destruction will not leave room for massive gummint; technology will first kill the jobs that can be automated. It really doesn’t strain the brain to imagine no DMV at all, does it? Having done scores of transactions in six different states concerning autos, auto plates and taxes, I truly cannot think of one that couldn’t have been handled over the internet. Gummint clerks will be the first to go, then middle managers, then whole divisions and departments will be merged…well, corporate America has already been through this.

Go ahead, “buy” them a year, make sure to get re-appointed and secure your pension, but eventually a database will control the taxi, a la “The Fifth Element” movie.

A brave new world, indeed.

DublOh7 on March 25, 2014 at 10:58 PM

Their socialist city councilwoman sided with the big corporations.

Seattleites are morons.

29Victor on March 25, 2014 at 11:13 PM

29Victor on March 25, 2014 at 11:13 PM

.
How ’bout “these Seattleites are morons cronies“?

listens2glenn on March 26, 2014 at 12:10 AM

There is a similar situation in Chicago, where the taxi industry is working to regulate competition out of business.

Taxi medallions in Chicago cost $350,000 a year. The city charges $50,000 for taxi licenses in Seattle.

bw222 on March 25, 2014 at 10:18 PM

Aha. The real reason for the regulatory squeeze emerges. Uber hasn’t coughed up enough graft.

evergreen on March 26, 2014 at 12:37 AM

“We should never allow government power and government regulations to be used to protect an establishment incumbent industry at the expense of an innovative competitor,” he said.

Um… what will they do with all their free time if you take their main job away from them?

Or did you imagine they did anything else?

In most cities you need more “certification, training, and testing” to cut hair than to work as an EMT in an ambulance. No, I’m not exaggerating for effect either… I wish I was, and it wasn’t THIS stupid.

http://reason.com/blog/2012/05/09/it-takes-10-times-more-educational-hours

“States consider an average of 33 days of training and two exams enough preparation for EMTs, but demand 10 times the training—372 days, on average—for cosmetologists.”

That isn’t because working in an Ambulance is easier; it’s because existing or larger barbers, etc. have made certain there is a new block in the way of any new competition.

That’s what most government regulations are for; and what they do. Did Rubio work in the government this long without finding that out until now?

Sorry Rubio, that’s what the Government does. Put up roadblocks to competition for existing businesses to drive out innovation… it’s almost all they’re good at anymore.

Could he really not have known that until now?

gekkobear on March 26, 2014 at 12:42 AM

Gekko

My wife is going through the MA and NY regulation mill to open her marriage counseling practice. 3,000 (not a typo) hours of “supervised” experience before you can take the state test and legally collect insurance reimbursement. Meanwhile, to be a “life coach” (the uber equivalent): start today. Permit to add a binky 120 (not a typo) square foot deck enclosure to our 1792 vintage house on the Cape: 18 months and $5500 in engineering and legal because it is in the coastal management zone. The guy who built it with his own hands 5 years after the predecessors to the hair care and shrink license machinery ratified the Constitution would be looking to move to the Yukon.

cosifantutte on March 26, 2014 at 5:53 AM

Is Uber the one that prices the ride based on demand? My daughter lives in NYC and told me some overpriced horror stories there ($117 to go a handful of blocks, for example). But I think that might be a different service.

lizzieillinois on March 26, 2014 at 7:10 AM

Is Uber the one that prices the ride based on demand? My daughter lives in NYC and told me some overpriced horror stories there ($117 to go a handful of blocks, for example). But I think that might be a different service.

lizzieillinois on March 26, 2014 at 7:10 AM

Yes. That’s uber. It has ‘real time’ market clearing pricing.

It’s cheap and useful when you don’t try to use it during peak demand.

uatu1878 on March 26, 2014 at 7:26 AM

Speaking as someone that drives a taxi, my concern with Uber and similar services is passenger safety. If the drivers are background checked and the vehicles are inspected, well, game on. It will hurt the individual taxi drivers and their companies, but competition is the organizing principle of the free market, right?

In my city, the process to getting a hack license is almost the same as getting a concealed weapon permit… Fingerprinting, FBI background check, no felonies, clean driving record, no DUIs in 7 years, plus, your car is supposed to be certified by a mechanic yearly, although some companies run some pretty ragged cars.

I might have taken 3 taxi rides in my life so I never really thought about it, but think about this… a girl gets dressed all sexy, gets wasted drunk at a bar, and tumbles into a car with a stranger… what could go wrong?

If any predator or parolee can drive a taxi, the public will pay the price…

PointnClick on March 25, 2014 at 10:35 PM

PnC has a point here. Having been around uber, lyft, and other ‘ride hacking’ companies – they definitely do not screen drivers like PnC has been screened.

The few times i’ve used Uber, i’ve liked it but I know for a fact they do not have to or pay for the same level of screening process.

That said, this should force taxi companies to up their game in terms of apps and cashless payments.

uatu1878 on March 26, 2014 at 7:29 AM

They will NEVER ‘adapt’ if you keep protecting them.

And when this goes totally on-line via an off-shore system to get drivers and vehicles to customers, just how will you ban it? Going to go after every cellphone holder and tell them that they can’t use it to get transportation?

Really, when local regulators start doing this stuff, just leave the jurisdiction, pretend you are a normal cab company and dispatch cabs via other means. You don’t refuse paying customers, you uphold local regulations, and yet you dispatch in a way that other, local companies with regulatory capture can’t compete with.

ajacksonian on March 26, 2014 at 7:32 AM

I guess, that they are all run by fabulously rich people.

Translation of Sally Clark quote: Uber and similar services have plenty of money but they haven’t offered any of it to me – yet.

Nomas on March 26, 2014 at 7:55 AM

“Translation of Sally Clark quote: Uber and similar services have plenty of money but they haven’t offered any of it to me – yet.”

EXACTLY. Remember when NYC had medalion AND non-medalion. That was because the rent pool got too small.

Innovators have been trying to innovate in the taxi service for years.

Lonetown on March 26, 2014 at 8:05 AM

what are taxi companies going to do when driverless cars become the norm in 30 years?

uatu1878 on March 26, 2014 at 8:22 AM

Marco, welcome to the world of Crony capitalism, writ small. At some point in the not-so-distant future, the greatest number of jobs will be in the regulatory sector (local, state, national) and the second, servicing the massively unemployed.

vnvet on March 26, 2014 at 9:25 AM

Don’t give me that safety issue BS. I’ve been in taxis that got lost and I had to look up the address on my phone and steer the driver in.

It’s all about the big pockets and who’s paying who.

WitchDoctor on March 26, 2014 at 10:47 AM

Speaking as someone that drives a taxi, my concern with Uber and similar services is passenger safety. If the drivers are background checked and the vehicles are inspected, well, game on.

PointnClick on March 25, 2014 at 10:35 PM

That’s exactly what they do. They perform a background check, DMV check and verify that the drivers have the proper insurance. Their system also causes them to suspend and review people that drop below a certain customer feedback rating.

I’ve used Uber, but have yet to use UberX. My friends use both all the time and love it.

nextgen_repub on March 26, 2014 at 12:07 PM

The reason the service is so much better in DC is that taxis are not regulated there as heavily as they are in other areas.

pgrossjr on March 26, 2014 at 1:54 PM

I finally used it last weekend after prodding from everyone I know. The test: Took a regular cab from Union Station in LA to West Hollywood. The driver was twitching and jerking as if he had Parkinson’s and my wife and I were surprised he was licensed as a taxi driver. That aside, the bill including tip? Fifty bucks.

Reverse order, same route. Uber: A much nicer car, cool driver, complimentary water in the back seats and a fare totaling just under nineteen bucks including tip. And all of that credited back to me for my first Uber ride. A no-brainer from now on. Bye bye taxis.

Borgcube on March 26, 2014 at 2:28 PM

PointnClick on March 25, 2014 at 10:35 PM

every vehicle here (Maine) required to be inspected yearly not just taxis.
and as far as I know anyone with chauffeur license also goes through similar checks, know they do the OUI and driving record checks. no reason taxi drivers would not go through same check.

dmacleo on March 26, 2014 at 2:40 PM

And those immigrants may have had to pay as much as $150,000 on the “gray market” for the right to operate for-hire vehicles, because, Clark notes without irony, Seattle hasn’t issued new medallions for over twenty years.

so every driver there is operating illegally?
I don’t know how medallions work.

dmacleo on March 26, 2014 at 2:42 PM

Here in Dallas, it’s been a scandal. Yellow Cab contributes to city council candidates (council and mayoral elections are nonpartisan), and it was revealed last year that Yellow Cab was allowed to self-insure rather than buy liability insurance for ten years, in direct violation of city charter. It wouldn’t have come to light if not for an investigation by the local ABC affiliate, WFAA. Then, when they were finally made to buy liability, there were no sanctions or reparations. Because of the self-insurance, Yellow was denying claims made by drivers who were run into by Yellow’s cabs, and were also not paying for injuries sustained by Yellow’s drivers, who are contractors to Yellow.

Meanwhile, the city was looking to outlaw Uber, and even used the vice squad (WTF?) to go after them.

Ward Cleaver on March 26, 2014 at 4:15 PM

what are taxi companies going to do when driverless cars become the norm in 30 years?

uatu1878 on March 26, 2014 at 8:22 AM

“Thank you for choosing JohnnyCab!”

Ward Cleaver on March 26, 2014 at 4:17 PM

Is Uber the one that prices the ride based on demand? My daughter lives in NYC and told me some overpriced horror stories there ($117 to go a handful of blocks, for example). But I think that might be a different service.

lizzieillinois on March 26, 2014 at 7:10 AM

Which is only slightly less egregious than not being able to get a cab in NYC at rush hour or in a thunderstorm, for love OR money.

Taxi drivers work hard and take a lot of guff, I have no doubt about that, and they’re all tainted by the bad apples. But they lose any sympathy from me when they start lining up behind regulatory firewalls using union strongarm tactics.

evergreen on March 26, 2014 at 4:25 PM