Fare Play: Should Florida be over Uber?

Is it a car service? Is it an app? Is it the next great step forward for the 9aec93564d35f1a4649ef067e2e8837276452ae76c452893d324b7363c9e9a4a“sharing economy?” Another David vs. Goliath showdown, where innovation squares off against entrenched and outdated local control?

The Uber debate is not easily broken down by a prevailing ideology or caucus factions. Age has played a critical role in understanding its function and predicting where supportive parties can be found (perhaps an explanation to  Sen. Clemens’ ‘Yea’ vote by contrast to the ‘Nays’ cast by Sens. Sobel and Margolis, the elder stateswomen of the Senate Transportation Committee).

With the final week of session upon us, the bill is a long shot for passage. But this pony has legs. Despite the general sense of confusion surrounding the bill, and aided by a strong lobbying campaign (for and against), Rep. J.W. Grant is taking HB 1389 to the House floor, though the Sen. Jeff Brandes’ Senate companion remains in committee purgatory. The language has been retooled and its reach is limited, for now, to Hillsborough County, which falls under the purview of the Public Transportation Commission.

The PTC’s history of cronyistic governance and negligent regulation adds to the complexity of the Uber debate. Are dissenters tacitly supporting the PTC and its bribery issues, commissioner infighting, and burdensome overregulation? Not exactly. As more and more instances of “creative disruption” clash with old-line policy and regulation, a gentle touch will be necessary to ensure that these innovations can have a meaningful but fair position in our markets and society.  Neither party has taken on the challenge with much dedication, and dissent in this instance doesn’t mean members are protecting the status quo.

As of last week, Lyft and Uber had already flouted the standing regulations of the PTC and began to offer their services in the Tampa area. Only after a strongly-worded op-ed in the Tampa Bay Times, did the Commission announce a fine scheme, for drivers operating for the services, ranging from $50 to as much as $800 per offense. Lyft has already offered to cover the fines for their drivers—a defiant rejoinder that belies confidence in this legislation passing before session’s end.

If the Florida legislature decides to take this step forward for innovation’s sake, it will be on the foundation of an unbalanced regulatory structure, currently no more than a patchwork body of rules. Issues involving wages, geographical range of service, and cherry-picking passengers surround the ride-share upstart in nearly every city in which they operate.

As recently reported by Al-Jazeera America, Uber is a facing a class action lawsuit in California by two drivers who accuse the company of skimming tips. Uber employs a well-rehearsed refrain that it is merely a “facilitator” and not an employer; that its drivers are not employees but simply subcontractors. As we’ve seen here in Florida, this is an attempt to skirt the licensure requirements that limo and cab services face. More worrisome is the recent wrongful death case filed against Uber, after a six year old girl was struck dead by a driver, who was allegedly keying in his next fare on the Uber app when the incident occurred.  The company is seeking to absolve themselves from the suit, leaving their “subcontractor” on the hook for this terrible tragedy, but profit cannot be made independently of risk, or without a structure for handling risk (i.e. insurance), for any transportation company, formal employees or not.

Other states have addressed this growing tech-imbalance by loosening the noose on minimum fares, while increasing insurance and public safety requirements for Uber’s drivers. In Paris, a 15-minute mandatory waiting period for Uber drivers is in place to insure fair competition between their drivers and cab companies.  But Shanghai, where Uber doggedly forced its way in, has banned the car service component of the app outright and restricted the hours of operation for its cab service.

As it stands now, the timing isn’t quite right for Uber in Florida. Grafting on more exceptions to the regulatory framework in the name of innovation and forward progress does not create fair competition or the halcyon free market that we hear so much about.  Most importantly, if you care about this sort of thing, piling on these exemptions for a service that will certainly exclude those without access to smartphones or credit cards—and the low-income areas in which they largely reside—will create nothing more than a taxi caste system for residents in every metropolitan area throughout the state. Is this what the “sharing economy” looks like?

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