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.