Lawmakers in Massachusetts are deliberating the imposition of new regulations on ridesharing transportation network companies like Uber and Lyft. These new regulations could include requiring the purchase of $1 million in insurance, closer regulation from the state’s Department of Public Utilities, and compulsory government background checks on all drivers.
Reason Foundation Vice President of Policy Adrian Moore said that the proposed rules are more about protectionism than about actual protection.
“There is little to no consumer protection in these proposed regulations on Uber and Lyft,” he commented. Rather, they are rules designed to protect the taxi companies from this new competition. Consumers clearly prefer the personal ratings and information available via apps with ridesharing services to trusting the regulators of taxi companies that have given them stodgy, low-quality, expensive services for decades.”
“There is simply no justification for regulating this market, other than basic insurance requirements, now that technology has solved any information problems between consumers and providers of paid rides,” he added.
Moore remarked that peer-to-peer economy services greatly benefit consumers and should be only lightly regulated.
“These ridesharing services are increasing the market for paid rides,” he stated. “That is good for the economy and the environment, so legislators should not put any barriers in the way. The only regulations needed now are basic insurance requirements.”
The traditional taxicab industry has a history of adapting slowly to consumers’ demands, said Matt Blackburn, policy analyst for the nonpartisan Pioneer Institute.
“When you look at the way that taxis have historically functioned, they have been especially slow to adopt technological improvements that consumers have long called for,” he said.
Blackburn then cited credit card readers and GPS technology, which taxi companies were slow to accept. “There’s no incentive for taxi companies to meet consumer demands, because they weren’t worried about losing any market share,” he said of the companies.
