Online Carpooling Service Fined In Canada

TechDirt is reporting on a disappointing development out of Canada. An Ontario transportation board has fined PickupPal, a Web-based service for arranging carpools, because a local bus company complained of the competition. (TechCrunch apparently first broke the story.) "[The transportation board has] established a bunch of draconian rules that any user in Ontario must follow if it uses the service — including no crossing of municipal boundaries — meaning the service is only good within any particular city's limits. It's better than being shut down completely, and the service can still operate elsewhere around the world, but this is yet another case where we see regulations, that are supposedly put in place to improve things for consumers, do the exact opposite."

No sense...

According to the Ontario Highway Transportation Board, there are many restrictions regarding carpooling...

* You must travel from home to work only â" (Not Home to School, or Home to the Hospital or the Airport) * You cannot cross municipal boundaries â" (Live outside the city and drive in â" sorry you cannot share the ride with your neighbour) * You must ride with the same driver each day â" (Want to mix it up go with one person one day and another person another day â" no sorry cannot do that â" must be same person each day) * You must pay the driver no more frequently than weekly â" (Neighbour drives you to work better not pay her right away just in case she drives you later on in the week)

Personally, I'm confused as to how they came to these regulations. It's built on a faulty foundation that they could define carpooling as a very strict set of conditions- and then disallow any activity that didn't meet those conditions.

It just plainly doesn't make sense. If I want to share a ride with a complete stranger and split the gas, how is that any different from sharing a ride with a family member? According to these restrictions, I can't drive myself and my mom to the airport and split the gas cost?

It's my car and I'd much prefer to do with it what I'd please- I see absolutely no reason the government has any say in this!!

Other Canadian news:
-In a surprising decision by the Ontario Sandwich Authority, You may no longer split the cost of a foot long sub with somebody else and then each eat half, as it doesn't boost profits to our local sub shops...

Re:No sense...

The really good part of democratic govenments is that you can actually change the rules to improve them. The really bad part is that it's mostly just a theory, and rules only get added, not fixed.

Re:No sense...

Democracy works--in theory.

Re:No sense...

This ain't democracy. Was there really a 51% majority that voted for this? Representative democracy works... in theory... if you don't elect idiots as the representatives.

Re:No sense...

Wrong.

The landlord pays property tax and that cost is passed along to tenants as part of the rent.

Re:No sense...

Oh, there we go again, conservatives crying about the need for deregulation. Poppycock, I say! I say the problem is a lack of regulation! Heap more regulations on top of the pile until it's all fixed, I say! It's a good thing PickupPal got stopped doing their illegal and immoral business practices. Someone has to stand up for the consumers, primarily those of the local bus company.

It's my car and I'd much prefer to do with it what I'd please- I see absolutely no reason the government has any say in this!!

Haven't you heard? Government = Democracy = We The People = We Can Tell You What To Do. Really, why do you conservative blowhards need to kick and scream every time Leviathan tells you, "No, You Can't, For The Greater Good?" You live in a complex society with complex interpersonal interactions, by living in our System you surrender your rights and dignity for the collective so you can live happily and freely. So what if the masses don't understand the implications and issues they vote upon the great deal of the time? At least we live in a marketplace of ideas, which I can tell you is a much better marketplace than the oppressive one with money and goods and slave wages.

Re:No sense...

There are plenty of cases where government gets it right, plenty of cases where businesses get it wrong.

The difference is that I have a choice of which private enterprises I do business with. Short of armed revolt or emigration I don't have that same choice when it comes to Government.

Re:No sense...

In the US, you can change government officials and policy.

Tell that to all the people who voted for John McCain. Remember that Democracy is two wolves and a sheep deciding what to have for dinner.... not a bad deal if you are one of the wolves but kind of a tough break if you happen to be the sheep.

Re:No sense...

There is a saying:

A company does a hundred things wrong, and 1 right you only here about the 1 decision. The government does 1000 things right and 1 wrong, you only hear about the wrong one.

This is true.
A company just needs to to tralk about it's failures, and very few people know. The government has a lot of people whose sole purpose is to tell everyone when smething goes wrong.

I worked in the private sector for about 38 years, and now I work for a city government. I see aso many thing being done correctly, for the benefit of the citizen. I see projects that are completed on time and within budget all the time.
I see a lot less waste. (you can confuirm that by going to the labrary and looking at the numbers)

But a son as 1 thing goes wrong, it's headlines. Sometimes it
s becasue of a stupid elected official, sometimes it's due to unforseen factors. Like the price of rock suddenly going through the roof, sometimes it looks like a mistake because of a lack of facts.

Bear in mind even a moderately size City has 1000's of projects going on every day.
I ahve been pleasantly surprised working for the government. I have also learned a lot about why things seem so expensive.

Re:No sense...

It would have worked if the feds didn't bail out the idiots. They'd be out of business by now.

Re:No sense...

Talking about more or less regulation (as the word "deregulation" does), is useless. A regulated market needs two things: Policy that makes sense, and exactly that minimum set of regulations necessary to reasonably implement that policy.

People who are for "deregulation" generally assume that we started with neither of those things, and so removing some regulation will make things less screwed up. Those against "deregulation" assume we started with a situation reasonably close to those things and removing some regulations will break everything. And you know what they say about assumptions...

This was on NPR a while back

I remember hearing about this story a few months ago on NPR (can't find a link, if someone else can it's worth it to listen to). IIRC, they had an executive from the competing company being interviewed.

Basically, his complaint boiled down to the argument that it wasn't fair that the bus company had to comply with a bunch of expensive regulations, but that a carpooling service didn't.

Re:This was on NPR a while back

As soon as the bus company is merely directing people to buses and not operating said buses, they have a valid complaint.

In the mean time, there is no equivalence.

Re:This was on NPR a while back

A carpool is quite a bit different from a bus, provides an entirely different service in an entirely different manner.

In and around Tampa, Florida, the state will GIVE you a van and buy your gas if you get 4 or more people to ride in it 5 days a week (I think they're looking for people with 40+ mile commutes each way). Turns out to be cheaper for the state to supply the vans than for them to increase capacity on the roads clogged with single riders.

Re:No sense...

As usual the situation is a little less ridiculous than the blogs make it out to be.

The bus company has a valid point that if I wanted to start a bus service but I didn't want to bother with things like safety regulations or hiring drivers with the appropriate license, I could easy just use the carpool site. The carpool site themselves were (they're not anymore) charging a commission.

The bus company says it's unfair competition because anyone with a car can set themselves up as a mini bus company without the expense of adhering to safety regulations. The transportation board's worry is that there will be a bunch of amateur, unregulated bus/cab drivers running around.

Re:No sense...

Personally, I'm confused as to how they came to these regulations. It's built on a faulty foundation that they could define carpooling as a very strict set of conditions- and then disallow any activity that didn't meet those conditions.

They're not disallowing anything. They're simply defining a carpool. Something that doesn't fit into that definition isn't disallowed, it's just not officially a carpool.

If I want to share a ride with a complete stranger and split the gas, how is that any different from sharing a ride with a family member?

You're more than welcome to do that. The problem here isn't sharing a ride with a stranger. The problem here is a business facilitating that sharing. The decision is basically saying that they are not facilitating carpooling, by the legal definition of carpooling, and that therefore what they are doing is facilitating transportation of passengers in public vehicles. The problem is that operators of public transportation vehicles must be licensed to operate a public vehicle, which these drivers are not.

It's my car and I'd much prefer to do with it what I'd please- I see absolutely no reason the government has any say in this!!

They don't. Carry on transporting whoever you want. Even call it a carpool if you want. No one cares. But don't try to operate a business facilitating public transportation without the appropriate licenses.

You're Doing It Wrong

I thought the government was only supposed to provide services that the private sector can't or won't provide with reasonable cost and quality.

Outdated laws are being changed

There is a bill already before the Ontario Legislative Assembly to update the regulations to explicitly allow this practice. It is disappointing that the OTB didn't wait until the bill had passed before passing judgement, but at least we can hope the situation won't last long. The same bill would outlaw some common driver distractions, such as television screens and handheld cell phones.

http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&BillID=2099 [ontla.on.ca]

Article Biased...

The article is heavily biased, although this isn't terribly surprising.

Pickup Pal is a service that allows individuals to arrange not only carpools. Specifically, it allows drivers and passengers to arrange compensation for trips.

Does this remind you of anything else? Oh, yes, a taxi company (or bus company, take your pick) which is Trentway-Wagar's complaint.

The bus company, which TW is, as an organization that arranges for buses to transport passengers for money, is bound by a series of provincial vehicle travel laws which require its drivers to be insured, to possess the correct licenses for their vehicles, and so on.

There are, in fact, specific exceptions in the specified Acts for car-pooling, but it appears that Pickup Pal does not satisfy them for various reasons (which should actually be quite obvious, prima facie).

The difficulty is that Pickup Pal is obviously not merely offering a carpool service. They are also obviously not offering a public taxi service or a bus service, either, but the carpool service has a defined exception in the law.

The law, the board argues, exists to protect riders. Drivers are to be insured, carry the proper licenses for their vehicles, and so on. (Insurance issues, which is a major public interest in cases such as these, form a major part of the Board's concern. Insuring a public vehicle is very different from insuring a private car and the caps on insurance are often much higher.)

As a result, Pickup Pal was ordered to immediately cease taking any actions that would put them in violation of the Public Vehicles Act.

Pickup Pal argues that they have nothing to do with the service, that they merely arrange this. The Board does not agree, for good reason- a taxicab company could make an identical argument. Such an argument is unpersuasive. There is a compelling public policy argument to regulating public vehicles and carriers and so on. For abiding by these regulations, Trentway-Wagar incurs costs, and they found it unfair that another provider would be able to avoid the regulations and thereby avoid the costs- hence the charge of unfair competition.

The summary writes that the regulations are making things worse for the consumer. I beg to disagree. Unsafe public transportation is worse than expensive public transportation, and there is a compelling public policy reason for regulating public transportation for safety's sake- regulations that Pickup Pal did not abide by.

Re:Article Biased...

Specifically, it allows drivers and passengers to arrange compensation for trips.

Does this remind you of anything else? Oh, yes, a taxi company (or bus company, take your pick)...

The difference being that the taxicab/bus company itself makes money on each ride. PickupPal does not receive any money from the passenger or driver. Are they going to fine the phone company when I call my friend up and we arrange a road trip where he agrees to pay for half the gas? What about the message boards at colleges where drivers and passengers arrange for long trips back home? Sue the college?

Specifically, it allows drivers and passengers to arrange compensation for trips.

Between the driver and passenger, which is a private transaction that has nothing to do with PickupPal. It is not a transaction between the driver, passenger, and 'arranging' entity (taxicab company). Now, if you want to go after a driver because he is accepting money for a ride without having a taxi license, then go ahead. But going after PickupPal is just absurd.

I Live in Ontario

I have never heard of these regulations. I doubt very much they are enforced at all. The fact that the got fined is only due to a complaint. If A) the public was aware, or B) the Premier was aware of those regulations, it would be dead in a week. This is actually very stupid move by the bus company if they are really worried about competition. I mean really, the province just started installing car pool only lanes on the 401, are they going to now say they are not committed to this sort of activity. Silly.

If I were PickupPal I would not pay the fine and write two letters, one to our Premier, and one sent to the various mainstream media outlets also indicating a letter was sent to the Premier.

This will kill the fine, kill the regs, and likely promote PickupPal, and car pooling in general. That's a quadruple win I think.

Not surprising

"[The transportation board has] established a bunch of draconian rules that any user in Ontario must follow if it uses the service â" including no crossing of municipal boundaries â" meaning the service is only good within any particular city's limits. It's better than being shut down completely, and the service can still operate elsewhere around the world, but this is yet another case where we see regulations, that are supposedly put in place to improve things for consumers, do the exact opposite."

Regulations ultimately act to benefit the regulated; not the public. The raise barriers to entry and protect incumbents. A Nobel Prize laureate in Economics pointed that out years ago.

In general, regulated industries can sustain higher prices and have less competition than unregulated ones. That's not o say regulation does not have a place; but to think it results in lower prices to consumers is wrong.

Re:Canadians carpool?

They ride moose up there. They're bigger.

Re:Walking

This sort of reminds me of a short story that Asimov wrote about a boy who decided he no longer wanted to use the transporters in every home in order to go to school. He preferred walking to school each day instead, much to the horror of his mother.

It just... piqued my memory, I guess.

Re:Okay I was wrong..

This is the most media fueled common misconceptions, please stop using it. Apple did not charge because Sarbanes Oxley, they charged because of additional patent/royalty costs. 802.11n has more patents then 802.11g so it costs more to license. It the same with MPEG, H264 cost more the H263 which cost more the base mpeg4 to license. When they originally sold you a router they only licensed it for 802.11G, who would pay more if they don't have to? You essentially were paying Apple's additional IP costs.