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Transportation services are a hot topic dominating the news today. With the introduction and proliferation of services like Zipcar, Uber, Sidecar, and car2go, the average city dweller has reaped the benefits of a more robust urban transportation infrastructure. But not all response has been positive. The conflict began in 2010, a year after Uber was founded, when the company received cease and desist letters from the San Francisco Metro Transit Authority, stating that Uber was operating as an unlicensed car dispatch service. At that point, Uber was establishing itself as an innovative company capitalizing on supply and demand. Uber claimed that it wasn’t actually a car service, but rather just a medium between driver and passenger that did not fall under any current regulations. City governments didn’t have a standard response on how to approach the new service, and some are still considering how to respond. Today, there is no single standard for regulation, but why does this come as a surprise? The concept of peer-to-peer ridesharing is not new. In fact, much of the hostile reaction to Uber, Lyft, Gett, and Sidecar is actually a familiar tune. Some people are hiding behind the same arguments that have been around for more than 100 years.
Henry Ford had a pretty great idea when he introduced the first Model T in 1908: Make the automobile business more efficient and personal transportation more accessible with a lower-priced car. Little did he know that he would lead the way for the shared transportation economy of 2014. In fact, everything changed just six years later with the introduction of the jitney concept.
At the time, electric streetcars were the predominant source of public transportation in crowded cities. The streetcars would go up and down a busy street on a fixed route, but they become so popular that the lines would go down the street and around the block. On July 1, 1914, one guy in a Model T pulled up to the streetcar line and offered to drive people to their destination for a nickel, the same price as the streetcar. People got excited and more drivers started doing the same, offering a faster, more direct route since automobiles could drive on side streets when streetcars could not. And thus, the peer-to-peer jitney service was born.
Uber, Lyft, Sidecar, and Gett use many of the same principles as the jitney providers of the early 20th century: Identify holes in the system and use modern technology – in today’s case, smartphone technology – to bring rider and driver together more efficiently. It’s a classic case of supply and demand, and one any entrepreneur can understand. When Jitneys were introduced, they spread like wildfire because of the demand among the young urban professionals of 1914. Sound familiar? The big private companies operating the streetcar, however, saw their ridership begin to decline. They used their networks and deep pockets to argue that the jitneys weren’t safe and weren’t good for the city. Since the jitney drivers did not pay into the city, city officials ruled on the side of the streetcar owners and squashed the innovative transportation system. Leveling the Playing field to anyone who follows all the news of transportation in cities like San Francisco, Washington, D.C., and Seattle, this story will sound quite familiar because history is repeating itself. Licensed taxi companies are rightfully building arguments claiming that Sidecar, Lyft, and UberX are “not safe” and “are bad for the city,” but what they are not saying is that this new technology is a threat to their 100-year-old business model. We are lucky to live in a society that values free enterprise, but let’s live out those values. At the end of the day, the user should dictate who the winner and loser are of this most recent transportation debate. Businesses must adapt to operate in the world of today or, better yet, tomorrow. Regardless of the outcome for businesses, we should make sure that we serve a common good and that the service is safe, legal and reliable. But scare tactics don’t help the conversation. This is where RideScout comes in for cities: We level the transportation playing field and let the best option win for each person based on their needs at the point of sale. RideScout shows the whole transportation ecosystem in the palm of your hand. When people can see all of their options and then make an informed decision based on that knowledge, that is free enterprise at it’s best.
Rather than having government try to over-regulate or under-regulate a market, let’s have it set a minimum standard of safety, insurance, and liability and then let the consumers decide what they need. In the end, we all win if market forces work freely within a smartly regulated industry. Joseph Kopser is the Co-Founder and CEO of RideScout, a technology platform that shows all transportation options in one view. Joseph is a 20-year veteran, West Point graduate, and a White House Champion of Change honoree.
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