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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.
  • 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 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.

  • by Anonymous Coward on Friday June 06, 2014 @06:57PM (#47183801)
    I know you're joking, but interestingly enough, the reverse is so much more likely. Given the nature of the payment system, a bunch of missing Uber passengers would quickly be tied to the killer. The general anonymity and cash payment system of taxis would be entirely more preferable for a predator.
  • 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 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.
  • 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.
  • by Anonymous Coward on Friday June 06, 2014 @07:23PM (#47183975)

    Thank goodness the government mandates sunscreen, otherwise I'd get burned at the beach!

    Government is like the guy who jumps in front of a marching parade and then pretends to lead it.

  • by vux984 (928602) on Friday June 06, 2014 @07:23PM (#47183983)

    EVERY Uber ride I've ever had has been in a nicer and better-maintained car than any cab I've ever been in in my life.

    a) Then UBER should have no trouble meeting the requirements establishing that the cars are in fact safe

    b) No idea where you live / travel, but I've never been anything but clean and excellently maintained cabs.

    AFAIK, Uber guarantees insurance on all of their drivers as well.

    Sure they do. To a faction of the limit than the state requires.

    Meanwhile most Uber drivers I've met are effectively operating their vehicles as cabs, but are insuring them as pleasure and commuter cars.

  • 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.

  • 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 vux984 (928602) on Friday June 06, 2014 @07:36PM (#47184071)

    Oh, I didn't realize that the taxis of yore carried continuously updated ratings and reviews from each and every passenger.

    So now the number likes you have on facebook means I can trust you? The reputation system of Uber is a good idea, but 'other passengers' are hardly qualified to assess the mechanical condition of the vehicle, or the insurance held by the driver. Its good if I want to know if he speaks Chinese, is friendly, talks too much, or if I want to hear long winded complaints about how the previous passenger must have worn too much perfume that triggered an allergy attack but the driver got him to the hospital efficiently so A+++.

    Also, why can't insurance companies start offering "Passenger Plans" for the wary consumer?

    Really? So if you get sick at a restaurant, the restaurant shouldn't have any liability or insurance; you were suppose to have your own 'diners insurance'?

    Fool; your mind is a fossil. Please, get out of my way.

    That's the best you've got? The existing taxi system has lots of room for improvement and competition, and there is some regulatory capture (corruption even) but pretending uber is all rainbows and unicorns from the knights of good is a bit myopic too.

  • 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 Anonymous Coward on Friday June 06, 2014 @07:47PM (#47184147)

    I've seen my state put up on their billboards, "SAVE GAS, CARPOOL". So now... they don't want me to carpool? How confusing.

  • by griffjon (14945) <GriffJon&gmail,com> on Friday June 06, 2014 @09:33PM (#47184595) Homepage Journal

    Do you live in the area? I do. The cabs here can suck. A cab in the middle of summer that smells of old smoke, with no AC, in 95F and 10% humidity in the middle of summer is a not good thing.

    That said, there are some amazing cabs too - but it's a guessing game. I've been (illegally) kicked out of cabs because my destination was too far or too "dangerous". Cabs get very picky during peak hours on who they pick up and in what neighborhoods they pick up in. Only this year do DC cabs take credit cards reliably, and only because of much-hated and delayed regulation changes based on Uber entering the game.

    Do I think Uber/Lyft/etc. need to join in to regulations? Sure. That's a good direction. But sorry D/M/V cab industry, maybe you should have upped your game a long time ago. I have much respect for a good cabbie, but not much for the industry.

  • 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 physicsphairy (720718) on Saturday June 07, 2014 @03:07AM (#47185405) Homepage

    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 treat average citizens as too ignorant to tend for their own welfare, and provide state protection, but just as with children, these adults are being denied certain rights and freedoms in exchange. There are many proxies for this question, among them, whether people should be allowed to purchase firearms or drugs, even though they are capable of doing damage, depending on the decisions of the user.

     

    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 question is how necessary are the regulations, and, especially, how applicable the regulations which were written specifically for taxis in a different era are nowadays.

    This is one of the major problems with government solutions--they have an awful lot of momentum. It's hard to make changes when changes are warranted.

    Do I really care how well-maintained the transport car is? Why does it need to exceed rules established for cars in general? Are poorly maintained vehicles as much of an issue with modern automobiles as it was when the law was passed? Does the ability of users in Uber and Lyft to rate drivers completely solve the problem since they can vote down drivers with unpleasant or unreliable rides? Is it now so easy to flag down a new driver that the car breaking down is not a particular issue?

    How important is a multimillion dollar insurance package? Is this actually improving the situation for people who would otherwise be walking or taking their own vehicles or a friend's vehicle without such a high insurance coverage? Would it possibly make more sense to transition to a system in which passengers carry insurance instead of drivers?

    The situation is simply not the same as it was when these laws were passed. Back then, these laws provided possibly needed solutions. Now, if the problems they were intended to solve even exist, there may be better solutions. The question is whether the state is going to step in and forbid citizens from pursuing these solutions, on the premise the state is once-and-always-correct, or if we are going to let citizens experiment and make their own decisions.

  • by Ash Vince (602485) * on Saturday June 07, 2014 @05:36AM (#47185549) Journal

    Not so worried about the cars, Uber and Lyft inspect them to make sure they are in good condition, and even if they didn't the first bad ride would flag it.

    Actually, the examples the poster you replied to gave might not be that obvious. The average consumer of these services rates the service based on things like how clean the back seats were, not on the brakes not working or the car having some other intermittent mechanical fault.

    Personally, I don't see any difference between Uber and any other cab company other than the fact they use technology. You still notify the company when you want to go somewhere, they send someone who is self-employed then take a cut of the fare.

    I also think that these companies need to recognise that often, local laws exist because the people who live in the are want them to. Here in London we have lawa that may or may not (our courts are still deciding the details) restrict their ability to operate. It is not up to us to change our laws to make things easier for some international company head quartered in the US and sending all its profits there. We should change our laws if the we want to and enough people write to their politicians demanding the change.

    You might think us a bunch of backward retards or whatever for having such laws, then fine sod off and don't do business here.

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