A les­son from the horses

Taxi­cabs will sur­vive by learn­ing to com­pete with Uber and Lyft

The Washington Times Daily - - EDITORIAL -

Acen­tury ago deal­ers in horses and man­u­fac­tur­ers of buggies and buggy whips took a sad story to the politi­cians: The new­fan­gled man­u­fac­tur­ers of horse­less car­riages are driv­ing them out of busi­ness. Some­body has to do some­thing.

For years their cus­tomers had stepped into the street, dodg­ing the de­posits of horse manure and mud, to hail a taxi­cab and now noisy con­trap­tions spit­ting smoke and noise were tak­ing their cus­tomers. Life was not fair.

The politi­cians, try as they might, had no work­able an­swer. The au­to­mo­bile was here to stay, in any color a cus­tomer could choose so long as he chose black. Horses in­evitably gave way, as did the buggy, and soon even the buggy-whip fac­to­ries ei­ther closed or dis­cov­ered some­thing else to man­u­fac­ture. There would be no more whips to pun­ish the back­sides of horses, or whips with which an an­gry fa­ther could threaten a young man threat­en­ing to get fresh with a will­ing daugh­ter.

Now the “legacy” taxi­cab in­dus­try is in sim­i­lar straits, and lob­bies, as the man­u­fac­tur­ers of buggies once lob­bied, for some­one to do some­thing about the ride-hail­ing ser­vices Uber and Lyft, which a cus­tomer can sum­mon, with­out step­ping into the street, at the touch of an app on a smart­phone.

Wisely, for the sake of pub­lic con­ve­nience, free mar­kets and com­pe­ti­tion, the Mary­land Pub­lic Ser­vice Com­mis­sion has de­cided against sub­ject­ing driv­ers for Uber and Lyft to fin­ger­print-based back­ground checks, a cum­ber­some and time-con­sum­ing pro­ce­dure that threat­ened to drive the up­start trans­porta­tion ser­vices out of the state. With them would have gone the jobs of hun­dreds of driv­ers across the state.

The Mary­land Pub­lic Ser­vice Com­mis­sion voted just as Mont­gomery County-based Bar­wood Inc., and its af­fil­i­ated taxi com­pa­nies, filed for Chap­ter 11 bank­ruptcy pro­tec­tion in fed­eral court in Green­belt, Md., cit­ing de­clin­ing rev­enues that it traced to com­pe­ti­tion from Uber and Lyft.

In its bank­ruptcy fil­ing, Bar­wood said Uber and Lyft had op­er­ated in Mont­gomery County for sev­eral years with­out hav­ing to com­ply with county and state reg­u­la­tions, en­abling them “to of­fer fares that were sub­stan­tially lower than the reg­u­lated prices of taxis.”

Uber and Lyft vowed to pull out of Mary­land if the fin­ger­print re­quire­ments were im­posed, as it had in Austin, Texas, ear­lier this year af­ter a sim­i­lar rule was put in place. Uber and Lyft said the checks they per­form on driv­ers are more thor­ough than the fin­ger­print checks, which they say can present an in­com­plete pic­ture of an ap­pli­cant’s crim­i­nal his­tory, if any. Po­lice records are usu­ally not kept up-to-date and can thus fail to show the fi­nal dis­po­si­tion of charges, par­tic­u­larly if charges had been re­cently dropped.

The Mary­land com­mis­sion said it would im­pose sev­eral ad­di­tional safety re­quire­ments, in­clud­ing an­nual com­pany back­ground checks on all driv­ers, that such checks be au­dited and ac­cred­ited, that driv­ers re­port ar­rests and con­vic­tions to the com­pa­nies within three busi­ness days, and that the com­mis­sion be in­formed when driv­ers leave em­ploy­ment. Uber and Lyft have 10 busi­ness days to re­spond to the pro­posed rules.

Uber and Lyft are not likely to drive all taxi­cabs off the streets of Mary­land, or any other state, but com­pe­ti­tion will en­cour­age in­no­va­tion and the taxi­cab com­pa­nies will no doubt find ways to com­pete. When they do, every­body wins. That’s the rough ge­nius of cap­i­tal­ism.

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