Though they are loath to admit it, ridesharing outfits like Uber and Lyft have profited in no small part from dodging regulations.
Call it the shadow-mover advantage.
These apps are not quite taxi services, and they are not quite livery services either. They have outpaced the law in many locales, saving them money on registration fees, inspections, and background checks.
“This happened so fast with these companies moving into the states, we are playing catch-up,” Indiana state Sen. Carlin Yoder told the Courier-Journal this week.
Indiana is the latest place to consider a law that would treat ridesharing drivers a bit more like cabbies. Yoder’s bill calls for background checks and mandatory insurance. It bars sex offenders, and people who have been convicted of a felony in the past seven years.
Here’s the twist: Yoder, a Republican, said that Uber actually wants these regulations to pass.
“Really, this bill came out at the behest of companies like Uber and Lyft,” he said. “They want to make sure that the insurance and background checks are on par with what they have to provide.” (Uber couldn’t be reached for comment Tuesday morning.)
Yoder added: “This is not a bill that hurts them in any way.”
The measures in the Indiana bill resemble what Uber says it already does to screen drivers. Taxi companies have long complained that the ridesharing apps don’t operate on a level playing field, since they are exempted from many rules governing commercial drivers.
In fact, the first wave of newcomers themselves might see some value in regulation. It’s a sign that they are maturing. Uber and Lyft are the Coke and the Pepsi of the ridesharing world, but there’s a long line of upstart competitors also trying to stake their turf — upstarts who might not be doing the same kinds of background checks, for instance.
Rules often serve as barriers to entry. Who loves barriers to entry? Incumbents.
UPDATE: Uber spokesperson Natalia Montalvo provided this statement.
In 278 cities and 53 countries, Uber is transforming the way people move around their cities, with millions of trips happening every week. In the U.S. alone, 22 jurisdictions have now adopted permanent regulatory frameworks for ridesharing, a transportation alternative that didn’t even exist 4 years ago.