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Virginia DMV Cracks Down On Uber, Lyft 260

Posted by Soulskill
from the markets-solve-many-things dept.
An anonymous reader writes 'Talk about regulatory capture! As radio station WTOP reports, "The Virginia Department of Motor Vehicles says that ride services Lyft and Uber are violating state law and must stop operating immediately. The DMV sent cease and desist orders to both companies Thursday." Who benefits most? It's not the people who are voting with their dollars and feet — seems more like the current stable of taxi drivers and others blessed by the state of Virginia. Good thing there's no call for or benefit from greater per-car occupancy, or experimentation more generally with disruptive disintermediation. Given enough bribe money down the road, I'm sure a deal can be struck, though.'
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Virginia DMV Cracks Down On Uber, Lyft

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  • by NouberNou (1105915) on Friday June 06, 2014 @06:31PM (#47183661)
    Or you know maybe it it's about companies coming in and skirting all regulation and laws that other companies have played by for years? Also some of those (read almost all of those) regulations have a purpose that serves to protect the consumer and the employee.

    But of course Libertarians will circle jerk about how poor little Lyft and Uber are being downtrodden upon by democratically elected governments that established the laws in the first place.
    • Re: (Score:2, Informative)

      by Anonymous Coward

      Two words: Unlicensed taxis

      http://dictionary.reference.com/browse/taxi

      — n , pl taxis , taxies
      1. cab , Also called: taxicab a car, usually fitted with a taximeter, that may be hired, along with its driver, to carry passengers to any specified destination

      So, how is Uber and Lyft not a taxi service despite the method to hire said drivers?

      • Ok, so you showed us a definition of the word 'taxi' to suggest that Uber and Lyft fulfil that definition. (I'm sure there are other definitions of taxi, but whatever.)
        But what you have not shown is that they are LICENSED taxis. And from what I understand that is the crucial point: They don't follow all the same regulations that the states put into place for taxi services.

    • by Anonymous Coward

      You say "democratically elected" as though that means something.

      People are voting with their dollars and their feet EVERYDAY. What is your "democratically elected" government worth in the face of that? How representative...

      • by vux984 (928602) on Friday June 06, 2014 @07:10PM (#47183883)

        People are voting with their dollars and their feet EVERYDAY.

        And people would buy toys with lead paint in them too if the price was low and they weren't aware of the risks of lead paint. Does that mean the regulations preventing them are wrong?

        Similarly people will get into a car operated by a driver without sufficient insurance or any gaurantee that the vehicle is operating correctly and safe, and if its cheaper they won't care either... at least... until there is an accident.

        Which is how the regulations came into effect in the first place -- the public was tired of getting into cabs that weren't insured or maintained properly.

        The public seems to have a very short memory.

        • by jythie (914043) on Friday June 06, 2014 @07:18PM (#47183947)
          'aware' is really the key word here. Everything tends to be fine until it isn't, and these services are fantastic if one lives in a fantasy world where everyone is fair and safe (kinda needed for libertarian and anarchist models), but people have been spoiled by the benefits of regulation and oversight so they assume they will get the same level of assurance but at a lower cost.

          As you say, people would buy lead painted toys if the price is lower and no one they know personally got sick from them.
        • Clearly you've never been in a Yellow Cab in northern virigina. I have. Uber is not missing much.
        • Re: (Score:2, Insightful)

          by physicsphairy (720718)

          And people would buy toys with lead paint in them too if the price was low and they weren't aware of the risks of lead paint. Does that mean the regulations preventing them are wrong?

          Children are assumed to lack the capacity to make intelligent decisions for their well-being. They receive both additional protections, and are denied most of the rights which are granted to adults. Regulating toys may hold up in that philosophy, in as much as they are intended for children. However, adults are still allowed to purchase products which contain lead, such as solder, because the assumption is they can adequately assess the risks, and have the right to decide accordingly.

          Certainly, we can trea

      • by DRJlaw (946416) on Friday June 06, 2014 @07:25PM (#47183999)

        People are voting with their dollars and their feet EVERYDAY. What is your "democratically elected" government worth in the face of that? How representative...

        People vote with their dollars and their feet for dumping in unlicensed landfills and on abandoned property EVERYDAY. That doesn't make it a remotely good idea.

        • People are voting with their dollars and their feet EVERYDAY. What is your "democratically elected" government worth in the face of that? How representative...

          People vote with their dollars and their feet for dumping in unlicensed landfills and on abandoned property EVERYDAY. That doesn't make it a remotely good idea.

          "Unlicensed landfills"? WTF are you talking about? Oh, it's just a strawman.

          We don't need new regulations for every activity. Your example is (the actual one, of dumping on abandoned property), is people violating others' property rights. That has been illegal for hundreds of years. Why do we need a new law for some specific type of property right violations?

          • by Bryan Ischo (893) *

            I think you missed the point.

            The point is that people "vote with their dollars and their feet" is not a good argument in this case.

            People "vote with their dollars and their feet" means that people make their choices known through actions other than voting on the issue. But the person you replied to is pointing that "voting with dollars and feet" does not legitimize the contested activity, just like "voting with your feet" that having to pay for garbage removal is too onerous and demonstrating that by dumpi

            • People "vote with their dollars and their feet" means that people make their choices known through actions other than voting on the issue.

              Voting and voluntary exchanges are legal activities.

              But the person you replied to is pointing that "voting with dollars and feet" does not legitimize the contested activity

              It legitimizes ALL voluntary exchanges. The only thing "contested" is unnecessary government intervention.

              just like "voting with your feet" that having to pay for garbage removal is too onerous and demonstrating that by dumping your trash inappropriately does not legitimize that activity.

              That analogy doesn't hold up. The example "dumping trash on abandoned property" is a person illegally violating the rights of the property owner. If I want to create a landfill on my own property, ensuring that it does not contaminate water supplies and doesn't create a nuisance for neighbors, I'm within my rights to do so. I don't have to pay trib

      • Nevertheless, rather than just whining about the big, bad, evil DMV (who are mainly enforcing laws passed by others), it would be more productive to work to get the bad/outdated laws changed. Yes, that may mean fighting an uphill battle against a powerful lobby (existing cab companies), but it there is already a lot of public support for this.

        • Lyft just announced their opening in Honolulu and the cab companies are already lined up to fight them.

          Cab service is very expensive here, for instance $50+ for a 7-mile ride from my place to the airport. Lyft to proposing to undercut taxi service by about 30%, which is a step in the right direction but still nothing close to cheap.

          It will be interesting to see what the city does, that is, to find out who has been making the biggest payoffs.

      • by tomhath (637240)

        What is your "democratically elected" government worth in the face of that?

        It makes and enforces laws based on the will of the majority. There will always be a few dissenters.

      • People voting with dollars is the reason we have regulatory capture in the first place. I mean why have any government at all? People can hire their own security forces if they need police. The private fire brigade can run a credit check on you to see if you can pay the bill before they put out your burning home... If it spreads to the neighbors, that's just more clients for them! All roads, bridges, ports, rail and telecommunications infrastructure can be private and commerce will THRIVE. I just had a
    • by Ralph Wiggam (22354) on Friday June 06, 2014 @07:00PM (#47183827) Homepage

      In related news, Airbnb thinks they are exempt from food safety regulations.

      http://goo.gl/LC73vZ

      Newflash- if you offer goods or services to the public for money, you are not part of some new and different "sharing economy" just because it involves an iPhone app. You are part of the old fashioned economy and you need to play by the existing rules.

      • by jythie (914043) on Friday June 06, 2014 @07:22PM (#47183973)
        Every few decades there is a movement or two that discovers that things are cheaper if you skip the rules, and they look around and can not see horrible things happening so they assume that things simply don't go wrong (as opposed to there being a regulatory structure that is helping)... but after a while things go wrong, people get sick, people get hurt, long term consequences start becoming visible, and those injured by the workarounds start demanding regulation so it does not happen to others... then wait a decade for people to forget again.
      • ...you are not part of some new and different "sharing economy" just because it involves an iPhone app.

        What if they have an Android App? Android is Open Source after all.

      • Yep (Score:5, Insightful)

        by Sycraft-fu (314770) on Friday June 06, 2014 @07:28PM (#47184019)

        Now, if you think the regulations are unreasonable, ok, fair enough. But the correct answer then is to push to change the regulations. It isn't ok to say "Oh no those regulations are necessary for the NORMAL economy but our special SHARING economy should be exempt". That is just being greedy and trying to have unfair competition. Either it is good for all or it needs to be changed.

        Also, if you think it should be changed, you might first want to look and see why said regulations exist in the first place. Sometimes they are bullshit, but often there is a good reason why a regulation comes in to force. There was a problem, and regulations were created to solve it. OHSA regulations are a good example. For anyone who's had to deal with them they can seem a little onerous, but then you study history and find out why we have them and it seems like a pretty damn good idea.

        A business that can only be competitive and offer a lower price by skirting regulations isn't something to be proud of.

    • by pepty (1976012)
      UberX and Lyft call themselves ride-sharing services, but Virginia state law limits the ride-sharing definition to non-profits.

      http://www.washingtonian.com/blogs/capitalcomment/local-news/virginia-dmv-tells-uber-and-lyft-to-stop-operating.php

    • by Dahamma (304068) on Saturday June 07, 2014 @03:05AM (#47185399)

      They may have originally served the purpose of protection of the consumer, but now they clearly serve the purpose of protection of the status quo. You think the fact that taxi licenses/medallions in most major cities are severely limited below demand is because they have just found the cream of the crop of drivers and no one else is trustworthy and capable?

      Those companies *love* the regulations they have played by, because they are the status quo and they have used the regulations to prevent what we are seeing today with Uber, etc.

      It's the same sort of thing that is preventing Tesla from being able to operate dealerships in some states - there was some obscure argument 60 years ago based on Detroit monopolies and pork politics to separate manufacturers form dealerships, and now the dealerships are using a totally obsolete law to protect their status quo.

  • by jtara (133429) on Friday June 06, 2014 @06:36PM (#47183681)

    Uber and Lyft are essentially third-world Jitney services, with a high-tech veneer.

    The difference is the driver has been vetted by the company to some degree and there is a social reputation system in place.

    Drivers are typically under-insured and under-licensed vs. regulatory requirements.

    In California, for example, drivers-for-hire have to be specifically licensed, and carry $1M liability insurance. Uber provides a $100K "umbrella" for the benefit of passengers, "just in case" the driver isn't insured as required by the company. (But the required insurance level is far less than that required by the state.) The car, as well, needs to be registered with the state (TCP). (Unless a taxi, which is regulated locally).

    Certainly, taxi and limo companies have a stake in keeping the status quo. That does not change the facts about under-insurance and under-licensing. So, they do have a legitimate beef about unfairness and protection of the public. This also works in their self-interested to limit competition, though.

    If we don't have enough taxis, or limitation of taxis is artificially boosting rates, change the local regulations to allow more taxis. Let's have a more fundamental public debate and solution. Sure, taxi and limo companies are greedy. So are Uber and Lyft. Let's work-out what is really best for the public.

    Uber/Lyft is "solving the problem" by ignoring it, and avoided a public/political debate by slipping in through a (non-existent, IMO) loophole.

    • by rwa2 (4391) * on Friday June 06, 2014 @06:58PM (#47183809) Homepage Journal

      Puerto Rico has these "third world" jitney services.

      They're actually pretty cool, when I was there all the drivers of the vans knew each other, and had their own cellphone social network going on, so if you called one for a pickup, and they weren't close to you, they would call another driver who was available to come pick you up.

      Even better, they would do their own vanpooling of passengers, kinda like the airport shuttles work here in the US, but coordinated over their social network. So you might be going from town to town, and stop somewhere briefly to pick up and drop off some other paying passengers who called in and just happened to be along the way.

      So much efficiency could be achieved...
      Disclaimer: I essentially wrote my master's thesis on running mass transit networks more like a jitney service, with smaller, more flexible vehicles:
      http://hairball.mine.nu/~rwa2/... [hairball.mine.nu]

      Of course, Virginia still gets some points for tolerating "Slug lines"... the instant carpools where people headed in or out of DC could pick up strangers lined up at bus/train stations so they both could ride the HOV lanes in.

    • Certainly, taxi and limo companies have a stake in keeping the status quo. That does not change the facts about under-insurance and under-licensing. So, they do have a legitimate beef about unfairness and protection of the public. This also works in their self-interested to limit competition, though.

      If we don't have enough taxis, or limitation of taxis is artificially boosting rates, change the local regulations to allow more taxis. Let's have a more fundamental public debate and solution. Sure, taxi and limo companies are greedy. .

      Don't confuse rates with what is really at stake here. One of the problems is medallions have become so valuable in some areas that cab companies will fight to the death to prevent more being issued. A medallion can be worth hundreds of thousands of dollars; and may be sold to a cab driver so it's producing a steady income stream whether or not the cab is on the road. It's also easily repossessed, doesn't depreciate and easy to put back in service so if the driver fails to pay you get it back and can sell i

  • by ugen (93902) on Friday June 06, 2014 @06:41PM (#47183715)

    I am not sure trying to pass Uber as an environmentally friendly solution will pass muster. Uber drivers operate essentially as unlicensed taxi cab drivers, rather than true "rideshare" or carpool services. They pick up new clients wherever requested and drive them to wherever client wants to go. These are trips that would not have happened otherwise. Since these services are, generally, cheaper than licensed taxi cabs (though, curiously, not by much in the area I just checked) - they may prompt people to call for and use an individual car, whereas otherwise the same riders might have chosen less convenient but cheaper public transportation.

    • They're not cheaper than taxis. They're at best roughly competitive. What you get with Uber is two things: their Black and SUV service is much nicer than a taxi for little more, and UberX should - in theory, due to congestion pricing - insure that there's always a ride available, even if it isn't cheap.
      • by ugen (93902)

        So what you are saying is that Uber is not even a ride "sharing" platform so much as an enabler for unlicensed car service business? I did not know that.

        I have to admit that my opinion on Uber was, so far, essentially neutral. However, if what you are saying is true - I would be inclined to reconsider and think of them as a net-negative. If they are a taxi cab - they should register and operate as one, any instant online hailing and optimal vehicle routing sauce notwithstanding.

        I will vote accordingly if/wh

  • That their monopolies are threatened and leverage government to protect them.

    Way it is and way it will be.
  • by mark-t (151149) <markt@@@lynx...bc...ca> on Friday June 06, 2014 @07:00PM (#47183823) Journal
    Could someone explain what the difference is between taking a cab and carpooling when the driver expects to receive compensation for the ride?
    • by Anonymous Coward

      Could someone explain what the difference is between taking a cab and carpooling when the driver expects to receive compensation for the ride?

      The government's cut and rules that deter competition for established businesses.

      • by jamstar7 (694492)

        Could someone explain what the difference is between taking a cab and carpooling when the driver expects to receive compensation for the ride?

        The government's cut and rules that deter competition for established businesses.

        That, and the vehicles are supposed to be safer in case of a crash. Your everyday Detrot/Osaka-made car? Not NEARLY as safe as a Checker cab. Those suckers are the tanks of the street.

    • by vux984 (928602)

      Could someone explain what the difference is between taking a cab and carpooling when the driver expects to receive compensation for the ride?

      Its the same as the difference between:

      "getting together with some friends for a BBQ, and all throwing $50 the host to help split the cost of the steak and booze they picked up"

      versus

      "getting together with some friends for a BBQ, and hiring a caterer."

      Can you really not see a difference?

      • Can you really not see a difference?

        Bullshit. Uber/Lyft is simply an unlicensed cab dispatched via a phone app.

        • by vux984 (928602)

          Bullshit. Uber/Lyft is simply an unlicensed cab dispatched via a phone app.

          I'm not actually sure where we disagreed?

        • by mark-t (151149)
          That's one way to look at it.... another is to see it as an organized carpooling system where the riders are willing to compensate the drivers for their time.
  • Free Market... (Score:4, Informative)

    by amoeba1911 (978485) on Friday June 06, 2014 @07:22PM (#47183971) Homepage
    This is a good example of how we have a "Free Market" in America... the big business is free to screw you over.
    • Re:Free Market... (Score:5, Insightful)

      by blackiner (2787381) on Friday June 06, 2014 @07:38PM (#47184079)
      It is sad really. One of the best things about America was that it was easy to just set up a company. Being able to quickly set up a business is the real answer to wage slavery. You don't like working a shit job making minimum wage and being a slave to the corporation you work for? Start up your own shop. It empowers the people, and allows them to break free of the control of mega corps. But the urbanization of just about everywhere people live makes it damn near impossible to buy a chunk of property if you want a place these days, and even if you do find a place to set up shop or have a business idea where you don't actually need land (like Uber), you get fucked by regulations. They have even come for software, which is arguable the easiest possible thing to set up a private business around. Pretty much any piece of software you write today is likely covered by some patent, and if you get big enough, they WILL come after you. Everything is perfectly set up to consolidate power in the established players, and cripples the average person.
  • by Max Threshold (540114) on Friday June 06, 2014 @07:36PM (#47184063)
    Whatever the pros and cons of ride-share apps, there is something seriously wrong when a corporation pledges to operate in open defiance of the law. That's far worse than regulatory capture. Corporate death penalty, anyone?
    • nah, this is just the Rise of the MegaCorps, companies so powerful they will eventually become their own "country", just like ShadowRun )without the magick, unfortunately)
      • by Darinbob (1142669)

        MegaCorps? Which are you referring to, the rideshare startups or the local taxi companies?

  • In a state where slugging is a daily occurrence - if not downright necessity - I find it insane that they would rule against what is the next natural evolution of it! Are they going to kill slugging now??
    • by hymie! (95907)

      Virginia does not consider the time saved by slugging to be a "profit", so it's allowed.

  • by Darinbob (1142669) on Saturday June 07, 2014 @12:09AM (#47185087)

    The "great car occupancy" is just wrong. These drivers are not a part of a car pool, where several people going the same way use the same vehicle. This isn't even about friends driving other friends around. Instead these drivers are acting as independent taxi drivers, pure and simple. There may be two people in the car but to infer that it's a reduction in vehicles on the road is disingenuous.

  • Are taxi services sustainable financially at all?

    I'm not sure about US, but in most of the world the taxi services are not financially sustainable and thus are subsidized by additional taxes.

    In other words, the cheaper services, which disrupt already weak taxi's profit margins, are a burden on the taxpayers themselves.

  • Dead, Inc. offers this incredible new service, dispose the your ex, for a dynamic fee.

    And these pesky authorities around the globe insist that it's murder and illegal. Obviously the authorities want to protect the interests of divorce lawyers.

    Basically Uber decided to ignore local laws in most jurisdictions, so I think they should be happy that they are just ordered to cease operating, instead of getting a confiscation order for their illegal gains.

  • There's nothing wrong with having standards for safety, insurance, accuracy in billing, and so on. But as soon as you see a limit on the number of cab licenses, bingo! That tells you that cabdrivers already in business are fiddling with the law to limit new entrants to the field. We of the dark side call this regulatory capture.

  • In many cities around the world, taxis are heavily regulated. Among these regulations are a fixed number of license plates, and the costs of these plates (or equivalent medallions, etc). This means that in many instances there aren't enough taxis to go around because these numbers were fixed a long time ago and may not be have been updated to meet demand. This benefits most the taxi operators and to some extent the drivers themselves because a high demand drives the price of the fare up. Also a business wit

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