1. Will the taxicab industry succeed in putting mobile services like Uber out of business?

The taxi industry may prevail in the short run, but as the public becomes aware of the advantages of mobile-based service, municipalities will face political pressure if they attempt to eliminate mobile operators. That doesn’t mean the taxi industry will stay on the sidelines. The industry has a huge stake in eliminating competition. Taxicab owners exert considerable influence over office holders and have been successful in leading strong opposition to mobile services—and some municipalities have banned mobile services. Prohibition efforts in Cambridge, Massachusetts, and Washington, D.C. were met by powerful opposition from app service users.

2. Why are taxicab drivers fighting against mobile app transportation companies like Uber?

Taxicab drivers make a point that mobile-based car services like Uber and Lyft aren’t subject to regulations that taxi drivers have to follow. In addition to requirements with respect to driver qualifications, vehicle inspections, insurance, and fares charged to riders, cities usually mandate fare meters, credit card machines, dome lights, and exterior painting. The taxi industry claims it cannot operate competitively if mobile services are not bound by similar regulations.

3. What is the future of mobile services like Uber?

Some form of ride sharing is here to stay because it’s more efficient than taxicab service. It’s easier to hail a ride over a smartphone than on the street (except in locations where taxis congregate in great numbers). What cannot be predicted so readily is the future of the taxicab. Theoretically, taxi licenses/medallions could reinvent themselves with the use of smartphone technology and operate like mobile services. Will regulatory bodies want to keep two systems in place: one system that limits the number of taxis and grants them monopolies in certain locations; another system for mobile services? Or should these two different modes of transportation be merged?

4. Is mobile-based car service safe?

Mobile service companies set their own driver qualifications and implement their own vehicle requirements, inspection policies, and background checks. To cover ride-sharing trips, such companies usually provide up to $1 million of commercial automobile insurance. In contrast, municipalities regulate the use of taxis to provide consumer protection relative to safety, insurance, and rates charged. Most cities test and train taxicab drivers and conduct background checks for felony and drug convictions and traffic law violations. Cities also inspect taxicabs’ mechanical condition.

5. Why has mobile-based car service become so popular?

Mobile-based car service makes use of a technology that makes hailing a cab from the street obsolete. The apps’ ability to connect drivers with riders increases mobility and accessibility. All the rider has to do is press the app button, which is more convenient than trying to hail a cab or call a taxi company. The app can be used in locations around the world and in most major U.S. cities where mobile services are operating. Mobile-based car service benefits the environment by reducing carbon dioxide emissions that occur when a taxi driver rides around and cannot find a passenger.

6. What governmental bodies regulate taxis?

Taxis traditionally have been regulated city by city. Although local control lets each city set its own policies, the existence of multiple regulations in one metropolitan areas results in inefficiencies and excessive air pollution. Taxicab drivers who pick up a rider in the city licensing them (home city) and drop the passenger off in another city cannot pick up a new passenger at their destination. They have to drive back to their home city without passengers. Time and fuel are wasted.

7. Should mobile service be regulated city by city?

Mobile services should be regulated by a state or region. In most major U.S. cities a regional governmental body already oversees mass transit and highways. When a mobile driver picks up a passenger in one city and drops her off in another jurisdiction, the driver should be able to connect to the closest new rider. Imposing jurisdictional policies would be difficult because the smartphone app looks for nearby potential drivers regardless of their place of origin.

8. How should mobile operators be regulated?

Colorado has passed a law that regulates mobile services across the state and exempts the companies from regulations applicable to other motor vehicles that provide intrastate commerce. Perhaps it will become a model. The Colorado law regulates the following areas:

  • $1 million insurance required per occurrence for incidents involving a driver during a prearranged ride
  • Drivers’ personal automobile liability insurance required
  • Disclosure of applicable rates or method of calculation
  • Option to receive an estimated fare
  • Electronic receipt upon completion of ride
  • Driver requirements such as minimum age to drive and a valid driver’s license; ban on driving more than 12 consecutive hours; implementation of an “intoxicating substance” policy; criminal history check and driving history research report
  • Annual vehicle inspections

Each mobile company that meets the statute’s requirement may get a permit to operate in Colorado for $325. The statute bars mobile service drivers from accepting riders through a “street hail.”