Colorado embraces Uber/Lyft, a.k.a. competition and innovation

posted at 4:41 pm on June 6, 2014 by Erika Johnsen

Yesterday, the Virginia Department of Motor Vehicles issued an eyeroll-worthy cease-and-desist letter to both Uber and Lyft, the astoundingly popular ride-sharing-via-smartphone app startups, until such a time as the state can get around to taking the companies’ new business models into legislative account — which won’t occur until sometime next year. Uber, at least, is plowing forward with their service anyway, as it informed users via email this morning:

You may have heard that Uber received a cease and desist letter from the Virginia DMV yesterday. We wanted to write to let you know that Uber will operate as usual, and we plan to continue full-speed ahead with our commitment to providing Virginians access to safe, affordable and reliable rides. We are surprised and disappointed by the DMV’s actions, given that Uber has been working with the Virginia government for months to modernize regulations that will put consumer safety first. Virginia should be standing for innovation, consumer choice and job growth.

Uber has set the standard for consumer safety in the Commonwealth. All uberX rides in Virginia are insured up to $1,000,000, nearly 300% more than the $350,000 required of for-hire drivers by the Virginia DMV. While the Virginia DMV does not require that all for-hire drivers pass background checks, all drivers on the Uber platform pass rigorous background checks at the county, state and federal level before they are ever allowed access to the technology. Our commitment to safety far exceeds the requirements set by the Virginia DMV – making their actions puzzling.

Indeed. Out West, however, Colorado just defied the terrible trend of cities, states, and even countries resisting the ride-sharing services’ brand of innovation with a legislative embrace, via the Denver Post:

Gov. John Hickenlooper on Thursday signed into law a bill that officially authorizes ride-sharing services, making Colorado the first state to legislatively embrace disruptive transportation offerings from upstarts such as Uber Technologies and Lyft. …

He called for Colorado regulators to review rules placed on taxis and limos, questioning whether they’re still appropriate or necessary with the advent of so-called transportation network companies like Lyft and Uber. …

Hickenlooper said “rules designed to protect consumers should not burden businesses with unnecessary red tape or stifle competition by creating barriers to entry.” …

The services, available in Denver since September, will now be lightly regulated by the Colorado Public Utilities Commission.

An excellent decision, if I may say so.

It might seem like I’m defending Uber or Lyft personally/specifically here, but it’s really more that these companies are such a wonderful example of an innovative service taking advantage of growing technologies at a rapid rate, giving existing companies a run for their money by more perfectly tailoring their own services to customer demand. Governments need to stop putting up roadblocks and start greasing the wheels for companies like this — which, incidentally, are raking in the dough while providing tons of amazingly flexible full- and part-time jobs. Via the WSJ:

Uber Inc. said it had raised $1.2 billion in additional funding from investors that valued the on-demand car service at $18.2 billion, among the highest valuations ever for a venture-backed startup.

The valuation, following weeks of competitive bidding among mutual-fund managers and venture-capital firms, underscores investor interest in the so-called sharing economy, where users sell time or resources to others. … It also highlights many investors’ belief that Uber can expand the service into the backbone of a logistics and delivery network.

At $18.2 billion, Uber has more than quadrupled its valuation in less than a year and earned an elite place in the world of venture-backed startups. Only Facebook Inc. in 2011 raised capital at a higher valuation from private investors—an investment from Goldman Sachs valued the social network at $50 billion—according to VentureSource data. …

In an interview, Mr. Kalanick said investors were attracted by Uber’s growth rate. He said revenue, what Uber collects after paying drivers and fees, is “at least” doubling every six months.

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Meanwhile, Seattle wants to kill Uber/Lyft. Because unfairness, or something.

Jedditelol on June 6, 2014 at 4:50 PM

It might seem like I’m defending Uber or Lyft personally/specifically here

Why no mention of this not-so-wonderful example?

http://www.usatoday.com/story/news/nation/2014/06/04/newser-uber-kidnap-woman-california/9956755/

corona79 on June 6, 2014 at 4:51 PM

Well, this ought to fit right in with the whole Mile HIGH City thing. Now all the people high on week can use these instead of getting behind the wheel and putting everyone else at risk.

Meople on June 6, 2014 at 4:57 PM

There must be a way to tax this

faraway on June 6, 2014 at 4:57 PM

Now all the people high on week weed can use these instead of getting behind the wheel and putting everyone else at risk.

Meople on June 6, 2014 at 4:57 PM

Dumb fingers.

Meople on June 6, 2014 at 4:59 PM

You know this gives me hope that Colorado goes back to its red color.

jukin3 on June 6, 2014 at 5:07 PM

I wonder what they’re smoking in Colorado.

rbj on June 6, 2014 at 5:09 PM

We wanted to write to let you know that Uber will operate as usual, and we plan to continue full-speed ahead with our commitment to providing Virginians access to safe, affordable and reliable rides.

Good for them. If what they’re doing isn’t illegal, then the DMV has no reason to make them stop what they’re doing.

Why no mention of this not-so-wonderful example?

http://www.usatoday.com/story/news/nation/2014/06/04/newser-uber-kidnap-woman-california/9956755/

corona79

Why would she mention it? Is kidnapping part of Uber’s business plan or something? Why didn’t you mention this?

http://www.nydailynews.com/new-york/nyc-crime/taxi-driver-20-years-raping-passenger-article-1.1789225

xblade on June 6, 2014 at 5:14 PM

Let the market place decide.

Oil Can on June 6, 2014 at 5:22 PM

Colorado is a libertarian state. We’re not all smoking weed.

COgirl on June 6, 2014 at 5:46 PM

See, all that pot use has twisted their minds.

Another Drew on June 6, 2014 at 5:48 PM

Meanwhile, Seattle wants to kill Uber/Lyft. Because unfairness, or something.

Jedditelol on June 6, 2014 at 4:50 PM

See, all that pot use has twisted their minds.

Another Drew on June 6, 2014 at 5:48 PM

Apparently, pot is not the issue.

Rix on June 6, 2014 at 6:05 PM

which, incidentally, are raking in the dough

That implies they are making money – which implies a profit.
That is not the same as:

Uber Inc. said it had raised $1.2 billion in additional funding from investors

GWB on June 6, 2014 at 6:31 PM

And, Erika, I think you are defending these companies without giving them the same critical look you give established carriers. I agree that it is always fun and exciting to see new (well, sorta new) business models come up and compete. But their newness shouldn’t mean a special exemption from regulators or laws.

(Oh, and the bit about not seeing the law change until next year – that’s a feature, not a bug, in VA. Remember how you were talking about that VA common sense yesterday? Yeah, well the legislature being very part-time is part of that.)

GWB on June 6, 2014 at 6:37 PM

Colorado is a libertarian state. We’re not all smoking weed.

COgirl on June 6, 2014 at 5:46 PM

…hashish?…coke?

KOOLAID2 on June 6, 2014 at 7:16 PM

Both Uber and Lyft are being sued because the vehicles used don’t conform to the Americans with Disabilities Act.

john1schn on June 6, 2014 at 7:20 PM

LOL, KOOLAID2.

COgirl on June 6, 2014 at 7:39 PM

Uber and Lyft only contribute a new dispatching and pricing model. I can see no reason why they should be exempt from other regulations aimed at securing driver and passenger safety.

xblade on June 6, 2014 at 5:14 PM

…cites above a case where the driver kidnapped a passenger.

Without supervision, it’s only a matter of time before we see more cases of criminals masquerading as Uber or Lyft drivers in order to kidnap, rape, or rob passengers.

Conversely, with no central tracking to make sure the carrier vehicle has not gone astray, drivers are at the mercy of criminals masquerading as passengers, and carjacking, robbery, or worse are inevitable.

THE LESSON: Just because something is “new” or “different” does NOT mean that it’s automatically “better”…or even “desirable”!

landlines on June 9, 2014 at 1:32 AM