

 Ridesharing startups hit with cease-and-desist by California regulator - jetcom
http://arstechnica.com/tech-policy/2012/10/ridesharing-startups-hit-with-cease-and-desist-by-california-regulator/

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jakejake
I think the idea of ride sharing is pretty cool. But to be fair when I read
about some of the ride services, they kinda are just unregulated taxi
services.

If somebody's heading to the airport and I get to hitch a ride with them -
that's a ride share. Having drivers waiting for ride requests and then taking
them wherever they want to go - call me crazy but that doesn't seem like ride
sharing to me.

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nc17
If I were the rental car lobby, I would be putting pressure on regulators to
make things as hard as possible for these companies. They are startups, so
it's hard for them to put up much of a fight.

It would be very different if Google was behind ride sharing. It took someone
the size of Apple to work with the music industry to sell mainstream music
legally to the masses.

~~~
aaronblohowiak
>It took someone the size of Apple to work with the music industry to sell
mainstream music legally to the masses.

This is historically inaccurate; Apple was merely the first to do so at such
scale. UMG/Sony/WMG all had the 99cents/10dollar albums by 2000, the iTMS
wasn't available until 2003.

<http://en.wikipedia.org/wiki/Online_music_store#History>
<http://en.wikipedia.org/wiki/ITunes_version_history>

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dsl
Prostitutes attempt to skirt the law in the same way by accepting "donations"
for time instead of payment for services. You know how well that works for
them.

~~~
citricsquid
I thought prostitution laws were avoided by escorting, providing time with
another adult (which totally won't have sex involved!) for a fee? or is that
to avoid different laws?

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TinyBig
I wonder if some of these startups knowingly run afoul of the law, thinking
that if they build sufficient ridership it will give them the sway to have the
laws changed.

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tsotha
I agree with the state in that these companies fall under the law as written.
The real question is whether the law is really designed to benefit the public
or whether it's a rent-seeking arrangement with the taxi companies.

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rootedbox
I can agree with side.cr, and lyft.. That they are simply a platform by which
drivers, and those wanting to be driven are able to reach other. However...
Even though payment is voluntary the drivers are participating in a
transportation service, and are subject to being regulated as one; non-profit
or not.

Not a perfect example of this but similar is that craigslist might be a
communication tool for those dealing in prostitution, but they are not the
ones committing the crime.

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johnrob
The problem is that "communication platforms" don't normally run background
checks, process payments, or offer insurance policies. Ironically, getting rid
of these things - which serve to make the service _safer_ \- probably would
make them more legally sound.

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muzz
Would this apply to Zimride, Riderbee, Ridejoy, etc. ?

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anigbrowl
Tough to say. For Ridejoy in particular, regulation could be a challenge,
because it will be argued that by matching drivers with underused vehicles,
there's an implicit promise that the vehicles are roadworthy and so on. Sure,
you can invite users of the service to waive some of their rights or
voluntarily accept a degree of risk and uncertainty to use the service, but
courts sometimes view such arrangements as contracts of adhesion - tilted in
favor of the offeror by virtue of the fact that a large organization has
substantially more bargaining power than an individual, who is left with
little choice but to accept or reject terms rather than negotiate them.

I don't have a strong opinion on how this should turn out and am not an
attorney. Rules that limit industry like this are sometimes the result of
regulatory capture, but are equally often the result of consumer pressure
following malfeasance by unscrupulous service providers some time in the past.
Certainly such rules represent an increase in red tape, but that doesn't mean
they're inherently bad; one might argue that they're an unavoidable corollary
of a complex technological society, reflective of the challenges faced by its
members - just as product liability rules are reflective of
industrialization's severance of the traditional relationship consumer and
producer that used to exist at the local level (blacksmiths, carpenters, _et
al._ ).

Incidentally, I hope people won't interpret the CPUC's representatives mention
of enforcement mechanisms as a threat. Spokespersons for public bodies like
this are duty-bound to cite the way the law actually operates, rather than
make policy statements about how it should operate. So discussion of
enforcement mechanisms is no more than a restatement of fact in response to
journalistic inquiry.

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rprasad
I know people in the echo chamber don't like to hear this, but ridesharing is
not an innovation. Los Angeles and Chicago have had ridesharing programs for
at least a decade. Hell, even Cleveland had a ridesharing program years before
Uber or Lyft were founded (and that was how I got around Cleveland in law
school).

Uber and Lyft call themselves "ridesharing" programs where passengers "donate"
money to a driver who "just happens" to be going to the same destination as
his passengers but who will not remain at that destination and who will
probably pick up more passengers shortly thereafter and "coincidentally" drive
them to their desired location in exchange for a "donation." Uber and Lyft can
use all the euphemisms they want, but they what they are is the very
definition of a for-hire car service.

The fact that they straddle the line between two types of regulated car
services (cabs and limos/"charter car") does not change the essence of the
commercial transaction that takes place. The fact that a mobile app or website
is used to arrange the transaction instead of a phone call does not change the
essence of the commercial transaction that takes place.

Regulations on cars-for-hire exist for a reason: to protect the safety of
passengers by ensuring a minimal level of competence _and to ensure
recompense_ via adequate capital or insurance in the event of an accident.
These regulations work remarkably well, which is why so many people think they
are unnecessary.

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ericdykstra
_Regulations on cars-for-hire exist for a reason: to protect the safety of
passengers by ensuring a minimal level of competence and to ensure recompense
via adequate capital or insurance in the event of an accident._

A minimal level of competence? Safety of passengers? I've taken more than a
few rides on all of SF taxis, Uber black cars, Uber X, and Lyft. SF taxis had
the most hasty drivers, and a couple I really didn't feel comfortable riding
with at all. With Uber/X and Lyft, I've never felt anything but safe, and I
have never been harassed for using a credit card to pay.

 _These regulations work remarkably well, which is why so many people think
they are unnecessary._

If everything works so well, why are so many people using Lyft? Have you ever
called a taxi and not had it show up because it found another fare on the way
to pick you up?

I'm sorry, but taxi service is broken in SF (the only place I've used it
extensively). I prefer to make my _own_ decision on what is safe and what
isn't. I don't need a government that takes money from vested interests to
tell me what's safe.

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joe_the_user
I drove a taxi a while back (not in SF) and I have to agree that a lot of
taxis are extremely dubious in their level of safety. I only figured out after
a spin-out that the company car I'd been assign had bald tires with uneven
tire-pressure. And well, obviously I was inexperienced too or I might spotted
that earlier but that's not uncommon.

But that is _after all the regulations_. With no regulation at all, things
wind-up even diciers. Will you check the tire pressure of every car you get
in?

The reason taxis are unsafe is because drivers and companies don't make much
and try to extract every last dime from their rides and their cars and so-
forth.

With more competition, less money to per drive and so-forth, I couldn't
imagine how dodgy things will get.

I'd like to think I was pleasant and courteous. I doubt you can judge driver's
skill by looking at his or her face so your eagerness to judge for yourself
seems foolish.

I can believe Uber- _now_ or Lyft- _now_ looks good. Will you know when the
safety goes out the window, considering there is constant pressure for that to
happen?

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ericdykstra
I don't know why you think government regulation ensures safety. When it comes
down to it, you're getting in a car with someone you've almost certainly never
met, and trusting them to get you safely to a location. I don't claim to judge
drivers' skill by looking at their face, but which of these situations seems
more safe to you? Which is a better experience?

Lyft: I open up the app and get an approximate time of when I can get picked
up if I decide to order a car so I can decide if it's the right choice. I then
get a picture of the car, a picture of the driver, and the drivers' rating on
my phone, and I can watch them come to me on a map. When they come, I'm
greeted by a friendly face who going to get more or less money based on how
well they service me. I know the car isn't going to be more than 12 years old,
will be in good condition, and that the driver has had a background check.

Taxi: I call a company and hope that the cab comes. If it comes I have to try
to figure out if they take credit card or if they're going to lie about their
machine being broken. They drive me as fast as possible to my destination,
without regard for comfort, because they're getting paid based on speed. I
don't know anything about this person's driving record, or if other people
have had generally good experiences with the driver.

You may very well have been a good driver, and I've taken taxis with good
drivers. I've also taken a taxi with a driver who mumbled to himself (no,
there was no phone/ear piece) and drove at a crazy pace without wearing a
seatbelt. How long do you think he would last on Lyft or Uber, where drivers
will get kicked off if they get rated too low?

I'll take Lyft every time, even if I see a taxi I could hail and get more
quickly.

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joe_the_user
Read what I wrote. I make no claims about my ability - I'm a far better hacker
than I was a driver or the goodness or taxis in general.

Like I said, I can totally believe Lyft is better than taxi services _now_.
But the thing about any purely private system is that everything they do is
going to ultimately be a cost-benefit trade _to them_ and everyone in the
equation is going to be trying to figure out new ways of making money. Look at
email, look at craiglist, look at AirBnb. The large large scale produces
problems unlike small scale. If someone comes up with X scam that lets them
profit from Lyft or whoever in a dangerous way, will Lyft be spending it's
entire margin tracking that problem down. Maybe.

The only thing about government regulation is that the state has authority to
be more invasive than a private entity can be and is not limited by a cost
benefit analysis. Government regulation is inefficient but unfortunately
haven't yet demonstrated an iron clad better way to make sure things like
commercial driving, electrical and other infrastructure work remain safe. It's
problematic but it would also be problematic to do a large experiment with the
physical safety of people.

