Uber says it’s a technology company. Technology is defined as a better way of doing things. Uber built technology to efficiently dispatch vehicles on demand. The technology is embodied in the Uber mobile app; it represents a better way to hail transportation.
Taxi companies are not technology companies; they are transportation companies. For one, these companies own and rent taxi cabs to taxi drivers at a weekly rate. For at least this reason, the companies are generally required to commercially insure the cars they themselves rent to others. This makes sense.
The question thus becomes whether technology companies such as Uber should endure the same regulations as transportation companies. Put differently, should a technology company that develops airline-booking software (e.g., Priceline) be required to insure and manage all the airplanes using that software?
Indeed, applying the same regulations to technology and transportation companies makes no sense. Uber does not rent cars to Uber drivers. As, Jarrod noted, Uber drivers use their own personal or commercial vehicles to fulfill ride requests received via the Uber app. Again, Uber is simply a piece of technology –a digital dispatcher. Nothing more ( but a 20% finders fee)
But wait, what specific regulations are we even talking about here? Require drivers to have insurance ( more then your standard coverage)? Driver background checks? Car inspections(?)? Non-discriminatory practices. Uber says it already performs these “regulations.”
Can Taxicabs and Uber happily coexist? With at least 15 federal lawsuits, and this week, the California State Senate’s insurance committee passed bill AB 2293, a measure to require “transportation network companies” such as Uber to insure drivers as soon as they turn on their ridesharing app of choice. Currently, Uber and similar startups offer drivers commercial insurance when their app is on and someone has accepted a ride — the coverage then generally lasts until the rider exits the car at their destination.
If AB 2293 passes through the state’s Appropriations Committee and becomes law, taxi industry leaders will flood newswires with victory cheers. To them, startups like Uber should be required to provide full-time, primary commercial auto liability insurance coverage, just like traditional taxis.
Or maybe the taxi industry should be deregulated?
So I guess time will……and we all know how swiftly the U.S. justice system works.