Trying to saddle the runaway Uber horse
State and local officials reluctant to regulate popular ride-sharing industry
Third in a series
In May, the members of the Braintree Licensing Board took a step that no other community in the state has been willing or able to do: they banned Uber. By a 4-1 vote, the board ordered that cease and desist letters be given to any driver or company such as Uber, Lyft, or other ride-sharing services that pick up or drop off fare-paying passengers in the town without being licensed as a cab company.
Little more than a month later, however, the board rescinded its never-enforced order in part because Braintree officials said they didn’t know where to send the cease and desist letters. Earlier this month, the Licensing Board took the issue up again, but ultimately decided to put off action, deferring to state lawmakers.
The Braintree retreat is typical of the Uber confusion that’s afflicting policymakers across the state and the nation. Ride-sharing apps are gathering tremendous momentum and undercutting the heavily regulated taxi industry, which is crying foul. Policymakers at the state and local level find themselves in an awkward position: Do they regulate ride-sharing apps like taxis, do they step aside and let the free market take its course, or do they find some middle ground? Some officials even say it’s now too late to intervene, that the market has already embraced ride-sharing apps and there’s no turning back.
Boston Mayor Marty Walsh faced the same policy dilemma and blinked. Cab drivers in Boston, weighed down by fare regulation and medallion costs, are pushing officials to crack down on the free-wheeling ride-sharing apps. There is even a 40-year-old city ordinance banning the use of private vehicles for hire, yet the Walsh administration (and the Menino administration before it) has simply opted not to enforce the law, which calls for the arrest of the driver and carries fines up to $500 per violation.
“In the city of Boston, no person, firm, or corporation driving or having charge of a taxicab or other private vehicle shall offer the vehicle for hire for the purpose of transporting, soliciting, and/or picking up a passenger or passengers unless said person is licensed as a hackney driver and said vehicle is licensed as a hackney carriage by the police commissioner of said city,” reads the ordinance, which has been amended twice, once in 1986 and again in 2002. “Any police officer witnessing a violation of paragraph a. of this subsection may arrest the driver of the vehicle and seize evidence of said violation.”
A spokeswoman for Walsh said the mayor is waiting for state lawmakers to weigh in before updating the city’s bylaw.
State officials are just as reluctant to address the issue. It’s one of those instances where technology has outpaced policy and policy is having a hard time catching up.
Ride-sharing apps first surfaced in Massachusetts in 2011, catching state and local officials as well as people in the taxi industry off-guard. The Registry of Motor Vehicles responded by creating definitions for “personal transportation network vehicles” that required the Department of Public Utilities to certify them for operation. In 2012, before the DPU could issue regulations for the certification process, then-governor Deval Patrick issued a waiver that called a halt to the regulatory process until the Legislature could consider the issue.
Gov. Charlie Baker introduced a bill in May to regulate the emerging industry and state Sen. Linda Dorcena-Forry of Dorchester and Rep. Michael Moran of Brighton have offered a measure that would extend many of the existing restrictions on taxis to ride-sharing apps. The Legislature’s Committee on Financial Services will hear public comment on the bills, as well as two others seeking to regulate the new businesses, on Sept. 15.
Baker’s bill is seen as more favorable to the ride-sharing companies. “The governor embraces innovation in general and innovative technologies such as these are part of the Massachusetts economy,” said Jim Conroy, a senior advisor to Baker. “Transportation network companies in particular provide a valuable service to the people who need it. In the end, competition is just good for consumers.”
“Uber is trying to play themselves off as a software company,” Moran said. “I think the only one who thinks Uber is a software company is Uber. The reality is they’re a transportation company. It’s a new technology applied to an old industry. That is a serious problem both in the point of view of fairness and equity.”
Neither the governor’s bill nor Moran’s bill address the taxi industry’s chief concerns, including the mortgages they took out to buy medallions in communities that require them, the required investments in newer vehicles, and the regulation of taxi fares that makes it difficult to compete with ride-sharing apps on price.
A spokesman for Uber said the company supports Baker’s legislation. “We’re certainly willing to pay our fair share” in fees and assessments that would be levied under Baker’s bill, said the spokesman, Taylor Bennett. “This creates a new set of rules and we can certainly work with legislators to determine what [the final measure] looks like. This codifies a lot of what we already do.”
Uber is also tapping into its customer base to mobilize opposition to the Moran/Dorcena Forry bill. The company invited its subscribers to sign an email petition urging lawmakers to get behind Baker’s plan and oppose the Dorcena-Forry and Moran bill.
“Taxi special interest groups are trying to pass a statewide law to force Uber out of Massachusetts,” the email petition says. “State Representative Mike Moran and Senator Linda Dorcena-Forry have introduced a bill with more than a dozen different provisions that would destroy the Uber you know and love. We need your help to make sure that these negative provisions, designed to hurt Uber riders and driver-partners, don’t make it into law.”
Moran said the email blast is misleading. He said he and Dorcena-Forry are “not trying to make Uber and Lyft a cab,” but merely trying to protect the riding public by having drivers undergo tougher background checks as well as make sure there’s a level playing field for the competition.“Uber is getting very good at their emails and their lobbying because they’ve had to do it in many states,” he said. “I understand businesses not wanting to be regulated.”
The first part of the series focused on the threat posed by ride-sharing apps to the taxi industry. The second part revealed how Uber has found a way to sidestep a law barring pickups at Logan Airport.