Lawmakers Are Worried About Uber Undercutting Cab Drivers, but They're OK With Driverless Cars

Regulators chasing rideshare services will be left behind by the next wave of city transportation.

National Journal

As cities and states continue to crack down on popular rideshare services, in part over labor concerns, lawmakers see no contradiction in paving the way for driverless vehicles to start taking over the streets.

On Thursday, Virginia Department of Motor Vehicles Commissioner Richard Holcomb sent cease-and-desist letters to Uber and Lyft, which operate services that allow smartphone users to find and hail drivers for hire. The order comes on the heels of the state DMV's decision in April to levy civil penalties that added up to $35,000 against the two companies.

The conflict stems from misaligned definitions of the services that Uber and Lyft provide. Holcomb says that the two companies' operations "are not ridesharing arrangements as defined by Virginia law because Uber receives compensation for its services." If they were such arrangements, he said, they would be exempt from regulations that govern taxi services. But the companies dispute his characterization, claiming that their apps simply match passengers with drivers.

Both companies plan to continue operations in Virginia.

Uber and similar services have clashed with regulators in the U.S. and abroad because their unregulated model undercuts the wages of licensed cab drivers. But some of the cities and states that are trying to limit Uber's reach in order to protect their existing taxi systems are also tripping over themselves to lay down a legal framework for an impending wave of driverless cars — and autonomous car services would eliminate labor from transportation entirely.

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In November 2012, an attorney representing San Francisco cab drivers filed a class-action lawsuit against Uber, alleging that the company's unlicensed status allows it to "unlawfully compete and take fares from law-abiding taxicab drivers." But a month later, California passed a law that created a "legal framework and safety standards for autonomous vehicles on state roads and highways."

Something similar is happening in Washington D.C., too. After the city threatened to shut down Uber for good, the company secured its place in the District when the city council approved a legislative framework for rideshare services. At the same time, lawmakers are setting up rules that would govern autonomous cars in the city.

Autonomous vehicles are one step closer to reality: Google released a chubby electric two-seater two weeks ago that doesn't even have a steering wheel or pedals. The vehicle has only two controls: start and stop. Writing in CityLab, ZipCar founder Robin Chase envisioned a "heaven" where shared driverless vehicles pick up multiple passengers and shuttle them to their destinations more efficiently than existing taxi services ever could.

If Chase's vision comes to pass, the war cities and states are waging against Uber and Lyft will be entirely irrelevant: The question of who may or may not operate taxi-like services in American cities will be meaningless if drivers are entirely removed from the equation. But until autonomous vehicles arrive en masse, some governments seem to want to keep a tight hold over the taxi sector, to the detriment of innovative rideshare companies.