Comment by ChuckFrank | Hacker News Reader

Comment by ChuckFrank | Hacker News Reader

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These PEER-TO-PEER TAXI SERVICES (as opposed to genuine ridesharing services) are illegal because privately insured vehicles cannot be used for commercial purposes. The insurance becomes invalidated and so neither the driver nor the passenger are covered. Commercial use is a distinct classification, and Lyft and Uber technically fit under that classification.

Lyft and Uber try to get around this by describing passenger payments for these commercially offered rides as 'donations.' However drivers of these services are not being paid for their volunteer work, they are working for these services. They are working for the money, and in this way it's not a donation.

Finally ridesharing is a specific gov't defined catagory. Only when the costs are ridesharing costs ($0.565/mile or less) can they be viewed as non-commercial.

Ridesharing is defined by the US Government (MAP-21 bill) as offering the use of seats in privately owned vehicles to other passengers on a cost-reimbursement basis only. H.R. 4348 (112th): MAP-21

So any fee the exceeds costs-reimbursement is income, and these drivers are working, and they are doing so commercially. So they are commercial drivers, getting paid to drive people around. Ergo they are taxis, and they are required by law to be regulated like taxis.

And why legislate taxis? Because of the commercial abuse of the common carrier, in this case the roads. All commercial use of common carriers - roads, canals, highways, etc - they are all regulated to prevent abuse.

What does this abuse look like? Too many users.

What does Uber and Lyft allow? More users of the common carrier.

This is not a new battle, truckers, couriers, ship companies, all fight this - what's new is the social distribution that new technology has empowered.

For more discussion see -- Hill Brothers Chemical Co. v. Superior Court of Los Angeles (2004) DJDAR 13414

http://www.bledsoelaw.com/articles/treppa_michigan_trucking....

In part, from Quora discussion.

http://www.quora.com/Ride-Sharing/How-are-Lyft-and-Sidecar-l...

> These PEER-TO-PEER TAXI SERVICES (as opposed to genuine > ridesharing services) are illegal because privately insured > vehicles cannot be used for commercial purposes.

The insurance thing is a red herring. Even if Uber were to demonstrate that the commercial insurance they purchase is in effect at all times when the vehicle is being used for commercial purposes, Uber drivers still wouldn't enjoy the same rights and privileges as taxi drivers do.

> Lyft and Uber try to get around this by describing passenger > payments for these commercially offered rides as > 'donations.'

I don't think Uber describes passenger payments as donations. Where did you read/hear this?

> And why legislate taxis? Because of the commercial abuse > of the common carrier, in this case the roads. > What does this abuse look like? Too many users.

I have not heard this argument in favour of taxi regulation before. Can you tell us more? (Intuitively, fewer taxis means more incentive to own a car, which means more cars on the road, and more car journeys overall as, if I have a car, then getting on my bicycle for a short journey is that much less likely.)

As to rights and privileges - should they? They are essentially illegal and unregulated. What rights and privileges should they get? Should they able to charge fares?

As to donations - Lyft regularly called them donations before they changed them to payment:

"“Starting tomorrow, we’re transitioning from donations to regular payments in Seattle, providing increased transparency for passengers and greater peace of mind for drivers,” Lyft wrote in an email to customers."

Common carrier abuse isn't dictated by the same terms as a free market economy precisely because the resource / infrastructure is subsidized. This is why regulatory limits are used.

And as to having too many private cars - well that's certainly a problem we are having, and a problem that places like London are trying to address with their Congestion charge.

http://en.wikipedia.org/wiki/London_congestion_charge

> And as to having too many private cars - well that's certainly a problem we are having, and a problem that places like London are trying to address with their Congestion charge.

It's funny you bring that up as an example, because:

1. The congestion charge does not apply to London taxis. These are the same cars that spend the largest proportion of each day within the congestion charging zone, and so contribute the most to congestion.

2. These same taxis are allowed to use many 'bus lanes', thus slowing down buses (genuine public transport) and using parts of the scarce road infrastructure which is unavailable to higher-density vehicles (picture a family of 4 in a private car, vs. a taxi whose average occupancy is ~2 people including the driver).

3. London has 'minicabs' which are also commercial carriers. They fall under different regulation as taxis, and must be pre-booked (can't be hailed on the street). What's the sensible argument for allowing them to operate (using the roads), having specific regulation and insurance requirements in place, yet not allowing them to (i) pick up passengers waiting on the street, or (ii) using bus lanes, like London taxis?

4. London taxis are _expensive_. I lived in London for 31 of the first 35 years of my life, and I can count on my fingers (not including thumbs) the number of times I hailed a taxi in London.

> 3. London has 'minicabs' which are also commercial carriers. They fall under different regulation as taxis, and must be pre-booked (can't be hailed on the street). What's the sensible argument for allowing them to operate (using the roads), having specific regulation and insurance requirements in place, yet not allowing them to (i) pick up passengers waiting on the street, or (ii) using bus lanes, like London taxis?

London black cabs get certain privileges. In return they have some obligations. They have fixed fare rates; they are wheel-chair accessible; they have tighter regulation about accepting passengers.

> London black cabs get certain privileges.

Yes, some are related to transactions with passengers (black cabs can pick up passengers who flag them down) and others are related to the use of the roads (black cabs can use many bus lanes, and are exempt from the congestion charge). The latter category of privileges are not enjoyed by other users of private cars, regardless of the number of passengers.

> In return they have some obligations. They have fixed fare rates;

Yes, and they're pretty high. For a journey within central London (with an average speed of 8-12 miles per hour), you'll be paying over US$1 per minute. For a longer journey (Heathrow Airport to Central London) you'd pay US$70-$130. (http://www.tfl.gov.uk/modes/taxis-and-minicabs/taxi-fares?ci...)

The fares charged by minicabs are lower than this. Under a free market, taxi prices would be lower.

> they are wheel-chair accessible;

OK.

> they have tighter regulation about accepting passengers.

What? Taxis have _looser_ regulations about accepting passengers. Minicabs drivers would probably love to be able to pick up passengers from the street, but they cannot.

>The insurance becomes invalidated and so neither the driver nor the passenger are covered.

It seems like this is the true crux of the problem. Would the costs of commercial auto insurance be prohibitively expensive?

Perhaps Uber could get into the business of cheap commercial auto insurance as well...

Uber does provide insurance for UberX drivers: http://www.scribd.com/doc/234793312/Ridesharing-Insurance-Po...

I don't know what it covers, or whether it is sufficient.

Know I know why the regulations are worthless. All they do is protect certain businesses. In this case, taxi companies.

As a resident of Portland, I would love to use Uber. Last time I took a taxi, it was overpriced hassle to get one.

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