The chief taxi regulator in Los Angeles tried to put his boot to the throat of upstart Web-based transportation services Uber, Sidecar and Lyft this week, directing them to stop picking up passengers in the city. The problem is, he doesn't have the authority to do so. Rather than operating conventional taxis, the three companies offer innovative ride-for-hire services that the state Public Utilities Commission oversees. In fact, the PUC has signed agreements with all three that govern their operations. And the main danger the companies pose at this point is to cabbies' hold on what used to be a captive market.
Uber, Sidecar and Lyft may be disrupting the cab business, but they're not operating cab companies. They're electronic clearinghouses that efficiently connect people seeking rides with a bigger universe of potential drivers. Customers reserve a ride through a smartphone application, which summons a limo (in Uber's case) or a privately owned car willing to deliver them in exchange for a donation (Sidecar and Lynx). All three open new opportunities not just for those who need rides but for those who'd like to make money driving their cars.
Taxi administrator Tom Drischler believes the three services are indistinguishable from a garden-variety taxi company. On Monday, he sent each a cease-and-desist letter, asserting it was operating an "unlicensed, commercial for-profit transportation service." But local cab regulations exist to protect people from unknown drivers they hail on the street, not from drivers they hire for pre-arranged trips. Those are the state's purview.
The PUC recognizes that the state's laws and regulations didn't contemplate the likes of Uber, Sidecar and Lyft, and it is in the process of updating its rules for this new generation of "online-enabled transportation service." Yet that's no reason to stop innovators from trying out new business models. The agreements the PUC struck with the three companies require them to provide a significant amount of insurance, check drivers' records and take other steps to protect the public. Those mandates build on the firms' existing safety efforts.
The City Council, meanwhile, is considering a motion by Councilmen Bill Rosendahl and Paul Koretz that, after falsely claiming that the new services come under "no local or state regulatory oversight," calls for the city to subject them to "all the rules and regulations applied to taxicabs." This misbegotten and anti-competitive proposal should go no further than the council's Transportation Committee, which will consider it Wednesday. The city should stop trying to guard the cab companies' turf by resisting state-regulated services that give consumers and drivers more options.