Our taxi system is inefficient, unreliable and sometimes unpleasant. A new competitor called Uber is poised to enter the Jacksonville market with the aim of improving quality, efficiency and provide consumers with better choices. The only problem? The City of Jacksonville doesn’t allow for their existence.
Uber is an on demand, vehicle-hailing mobile app that matches hired drivers with riders through the use of smartphones. Push a button and you’ll get a ride. The interface is relatively simple. Users open the mobile app and indicate where they are and where they want to go. Uber then calculates a fare based on time and distance (there are peak time pricing fluctuations-such as during New Years Eve or during a Jaguars game). A picture of the driver and the tag number is also displayed (Uber uses existing, licensed drivers). If you agree, then a credit card that is stored on file will be charged and within minutes a clean car and professional driver will pick you up to take you where you need to go. For drivers, an intrinsic level of trust is present as you no longer need to worry about whether a rider can afford their fare being as though a credit card is charged up front. For riders, that same trust level carries over to the service provider as drivers are ranked and reviewed by Uber users. Riders will reasonably know up front how reliable, clean and professional their transportation experience will be before they accept the fare. Uber fares carry a premium price, however consumers will finally have a choice over a cheaper, but oftentimes unreliable and unpleasant alternative. As long as you can afford the fare, an Uber car will take you anywhere without regard to race, ethnicity or zip code.
For an industry that has experienced little in the way of innovation for decades, one might be surprised then why such a service that uses technology driven efficiencies to improve transportation options for consumers and expand economic opportunity for drivers is not allowed in our community. Just as the City’s laws on food trucks are designed to limit competition, so to are the current laws governing the paid ride services market.
The issue with our current ordinance is how limousine services fares are defined as being either ‘charged by hour, or fixed in advanced’, that limousine services must be ‘operated on a reserved, hourly basis for a continued period’ and that pre-arranged contractual carriers must charge passengers ‘based on a written agreement to provide transportation 30 minutes in advance of boarding from a specific location and an agreed-upon fixed rate that exceeds the normal hourly rate for one hour and not the distance traveled.’ Existing taxicab companies are afforded protection from competition as Uber’s method of fare calculation is charged on a GPS/distance based formula and that ‘limousine services’ (which are loosely defined in the ordinance) cannot be hailed on demand.
In markets such as Washington, DC, ordinances have been amended to allow for a new class of for-hire vehicles that use digital dispatch and charge by time and distance. This innovative legislative framework provides for transparency in consumer pricing, increases the supply of vehicles-for-hire, prevents discrimination and provides for a marketplace that allows for new competitors which is ultimately in the best interest of the public.
In monopolized markets where price is controlled and new entrants are prohibited, there is no incentive for existing companies to improve upon their services. In Jacksonville, this has led to a taxi industry that leaves little to be desired. Oftentimes taxis arranged via traditional dispatch methods arrive maddeningly late and when (or if) the taxi does arrive for pickup the experience is defined by unkempt cars and sometimes rude drivers. Many cab drivers in this city do work hard and take great pride in their work. However, the current structure of our taxi services that restricts new forms of competition provides little incentive for taxicab companies to improve upon their operations.
The Federal Trade Commission seems to agree stating that services such as Uber can be ‘more responsive to consumer demand, may promote a more efficient allocation of resources (e.g., vehicles and drivers) to consumers, may expand demand for passenger vehicle transportation services, and may reduce consumers’ transaction costs in paying for such services.’ http://www.ftc.gov/os/2013/06/130612dctaxicab.pdf
Despite our current ordinance which states that regulation should be ‘to the play of free enterprise and market forces’ and ‘encourage free enterprise in the vehicle-for-hire industry’, not allowing for services like Uber means consumers are subject to the inefficiencies of a non-market economy.
We need sensible laws that facilitate new forms of competition, disrupt the status quo through innovation and provide reasonable assurances of price expectations to consumers. Do not criminalize competition, Jacksonville.
Editorial by Mike Field