Taxi apps divisive as ever

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A Checker Motors New York City yellow taxi. AFP/Getty Images/Miguel Medina

The electronic hailing of a physical taxi cab and ride-sharing smartphone applications have gained popularity in the U.S., but not without instigating protests from transportation companies that naturally want a say in how their industry changes. The increasing usage of apps that call cabs, and locate willing drivers to transport users within city limits, has gained attention from the government as well. California policy makers proposed a ruling on July 30 that would regulate such mobile apps.

The California Public Utilities Commission proposed a decision that would implement regulations on hailing and ride-sharing technology to ensure standards for insurance and driver and passenger safety, despite most of the apps already including their own procedures for these requirements. The decision names Uber, Lyft, and Sidecar as three of the services targeted with such legislation that would tighten rules for driver criminal background checks and insurance coverage, and the apps are referred to as Transportation Network Companies:

“A TNC is defined as a company or organization, operating in California that provides transportation services using an online-enabled platform to connect passengers with drivers using their personal, non-commercial, vehicles…”

If the ruling makes it onto the regulatory books, these startups will be off the hook with angry cab companies whose business is threatened as they will be somewhat state-sanctioned services, and they will also skirt the hurdles of wrestling with California city administrations. (Uber and Lyft have already received cease-and-desist letters from the city of Los Angeles, and Sidecar is banned from the San Francisco Airport, according to reports.) Although the anti-ride-sharing rallies are likely to continue.

Progress for electronic taxi apps made way in other parts of the U.S. earlier this year as New York City lifted injunctions against apps including Uber in June. Uber and its competitor Hailo are not quite as disruptive as a service like Lyft, which employs amateur drivers in their personal vehicles. Still, California could be taking a lesson from New York, and embracing the expressed desire of the consumer as more users sign up for the digital cab services, and the apps themselves expand to more cities.

The outcry from transportation authorities and cab companies is to be expected in the face of these services that detract from their businesses, but can electronic ride-sharing and hailing apps actually put out traditional taxi cabs as, say, e-mail put out the paper mail postal service? Only time will tell, and until then, perhaps state-implemented regulations on the operations of these apps will somewhat stem the tide of their meteoric growth.