The Dom Post editorial:
Some of the complaining is down to professional jealousy and turf-guarding. But it has also posed important questions around passenger safety. So it is welcome that the Government will review the regulations around “small passenger services” – the umbrella term covering taxi companies and private hire outfits. Uber is classed among the latter group, which exempts it from certain lengthy rules around fares, meters, back offices, taxi licences and signage. That’s for the good – these rules simply don’t apply to Uber – and it helps the company offer lower prices than taxis.
But the classification also allows Uber more dubious advantages: no need for security cameras mandatory in most taxis; no need for “area knowledge” and language standards that many taxi drivers must meet; less onerous rules around reporting complaints.
It’s not clear why Uber should enjoy such perks. Its model is fundamentally an advance in ease-of-payment and passenger-driver matchmaking – not an advance in safety. And that is the main reason for having rules: to do what is reasonable to ensure the safety of passengers and drivers.
The security cameras were not put in to protect passengers, but taxi drivers. And they shouldn’t be mandatory anyway.
The editorial misses the key difference between Uber and taxis. With a taxi you get basically no choice as to who your driver is. With Uber you can choose your driver, and you get to see what other passengers have said about them. It is potentially a far more powerful model for safety and quality.
It is like Trade Me – your reputation is vital. Get some bad reviews, and people won’t trade with you.
So the Dom Post misses the point when it says Uber has perks because it does not need to meet taxi standards. Taxis gets regulated by their companies and the state. Uber drivers effectively get regulated by passengers – if your driver gets you lost, you’ll give them a bad review.
It is, however, one of the most disruptive businesses of all those businesses whose disruption is based on technology and it has aroused fierce resentment, among taxi companies in particular. In some countries it has been banned.
Taxi companies say Uber has an unfair advantage because although it operates as a taxi service it is not subject to the multiplicity of regulations that taxi companies must obey. Uber insists, and the Transport Agency at this point agrees, that it is a hire-car service and it fits within all the applicable regulations.
The differences between taxi and hire-car services are that taxis may be hailed in the street and charge by the metered distance they travel, plus extras like credit-card and eftpos fees.
Hire-car services must be booked in advance for a fee agreed in advance. Uber’s drivers are private operators with their own cars. Customers engage them via a smartphone application. The differences between the services can become blurred, however, and taxi companies say that some Uber operators are stepping over the line.
Some of the taxi companies’ fears, such as those about safety, can probably be discounted. Uber drivers, for instance, are vetted and must have a public passenger licence.
Passengers and drivers rate each other and Uber dismisses those drivers with consistently poor ratings. Because of the way they are hired, any misbehaving driver (or passenger) could also usually be traced.
There is, however, a strong argument for saying that taxis are over-regulated. Foss says that the Government wants to allow innovation to flourish. The review he has proposed must allow that and should not be used as a device to shut innovation down.
I’d be impressed with a taxi firm that tried to emulate Uber rather than close it down. Why not allow us to easily rate our taxi drivers and have that info available to passengers? Why can’t a taxi company inform a passenger which cabs are nearby, and allow the passenger to choose the one they want?