Policymakers face Uber dilemma

State and local policymakers don’t know what to do about ride-sharing apps such as Uber and Lyft that are steadily destroying the taxi industry. The apps are transforming right before our eyes a business in which rates have traditionally been regulated and competition restricted. The apps have been good for consumers, but bad for taxi drivers, who increasingly find themselves unable to compete.

In most instances where technology leapfrogs regulation, policymakers would just change the regulations to put everyone on the same footing. But they can’t do that easily with the taxi industry, because the regulations were crafted in such a way that undoing them is nearly impossible.

In cities such as Boston and Cambridge, regulators require taxi drivers to carry medallions. Since only a set number of medallions exist, they have dramatically increased in value over the years. Buying one is like purchasing a fairly large house in a very nice neighborhood. But with the arrival of Uber and Lyft, the neighborhood is going to hell, and the value of those medallions is starting to fall.

The situation is only going to get worse. Uber is introducing new services that will grab more riders. Word is also starting to spread. Uber has already caught on with younger people who are accustomed to managing their lives through their phones. But now the service is catching on with tech troglodytes who simply like the convenience and lower cost of an Uber ride.

How should policymakers respond? Some officials, including Gov. Charlie Baker, want to do as little as possible because they don’t want to be perceived as standing in the way of innovation. Others want to apply the same regulations that apply to taxis to Uber and Lyft. ABoston Globe editorial suggests a limited buyout of medallions may be the best way out of the regulatory nightmare, but it’s hard to see policymakers recommending that taxpayer dollars go to resolve a problem they created.

Cambridge taxi drivers staged a one-day strike on Monday to draw attention to their plight, but not everyone was sympathetic. “You guys realize the constituency that supports Uber is the majority and you’re the minority, right?” said Cambridge City Councilor Nadeem Mazen, who uses Uber every day. “The state is about to make Uber legal – it’s about to make it fully legal, OK? And you guys are about to be in an even worse position.”




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