Removing Virginia’s Barriers to Ridesharing07/06/2014 | News |
You can do a lot from your cellphone these days — but if you’re in Virginia, don’t bother trying to schedule your ride home with one. While ridesharing companies such as Uber and Lyft are shaking up transportation options in other states, they’ve been put up on blocks in the commonwealth owing to outdated laws that stifle innovation and discourage competition.
Last month, the Virginia Department of Motor Vehicles served Uber and Lyft with cease-and-desist orders, demanding that they stop providing a service that is clearly in high demand, competing on availability, affordability and convenience. There may always be plenty of people who prefer a traditional taxi — and there will probably be taxis for them to hail. Companies such as Uber, though, are more than just competitors — they are innovators, changing how people think about finding a ride.
I’ve learned from experience that it’s almost impossible to hail a cab after a Washington Nationals baseball game, but if I punch a few buttons on my cellphone, an Uber driver will be there in minutes.
The ability to schedule a pickup by cellphone is disruptive to the industry, which is, of course, why the industry doesn’t like it. However, the state’s job is not to protect an industry; it’s to look out for the interests of the citizens. We shouldn’t be shielding existing companies from competition by insisting on strict regulations that have locked us into an unchanging 20th-century model. The arguments being advanced for today’s status quo could just as easily have been made to protect switchboard operators from evolving technologies decades ago.
A hundred years ago, metered cabs were a startling innovation that radically changed people’s commutes. I don’t know if Uber and Lyft will have that sort of impact today — but I do know they should have the right to try. More importantly, Virginia’s commuters should have the right to choose the transportation options that best suit their needs, not the ones spelled out in an outmoded statute.
Virginia’s ban on alternative ridesharing arrangements cries out for a legislative fix, and I intend to introduce legislation freeing up the ridesharing market next year. I guarantee that I won’t be the only one.
Uber’s service relies on a predictive algorithm that models demand in real-time to position drivers before a would-be passenger even presses a button on his iPhone. Fare payments are processed automatically; no fumbling for cash or credit cards, and the tip is included. Passengers are given choices about their ride.
Why didn’t the taxi industry come up with these ideas? I suspect it’s because they didn’t have to. High barriers to entry ensured that cab companies never faced serious competition on rates or amenities. There was never any need to compete on service or value.
In a functioning market, companies respond to consumer preferences. They compete on price, convenience, comfort and reliability. The emergence of companies such as Uber and Lyft marks the return of competition to a grossly overregulated field. I applaud that entrepreneurial spirit.
Virginia has been routinely named one of the best places to do business, but as the cease-and-desist letters demonstrate, there’s clearly room for improvement. With those letters, we are telling entrepreneurs that we love innovation and job creation — but only so long as they’re not competing with anyone. Freeing up rideshare competition will expand economic opportunity and enhance transportation options for Virginia commuters, and what’s more, it’s the right thing to do.
Here in the Old Dominion, we value tradition — but not without reason, nor at the cost of economic dynamism. Virginia’s statutory prohibitions on rideshare arrangements are relics of a bygone era. It’s time for a modern, forward-looking approach to transportation, and freeing up services such as Uber and Lyft is a good way to start.
The above article appeared in the Washington Times as an op-ed on July 5.