The vast majority of cars being driven around the city have empty seats. Why not let people sell some of them, make some money, and provide more transportation without more traffic? One of the obstacles is that these services often run afoul of regulations designed to protect consumers.
A few companies are trying to make private ride sharing a reality. SideCar lets anyone sign up, undergo a background check and other reviews, and then become a “community driver” who can offer others rides through the service for a “donation.”
This is part of a wave of startups providing what’s called “collaborative consumption,” where people have an economic arrangement to share a resource. There have been services like time share vacations and Zipcar car sharing for many years, where a company owns some resources and sells shares in them, but the newer trend is companies that try to help individual people sell unused capacity in stuff they own.
Airbnb, for example, lets you rent out your apartment when you’re not there for extra cash, and makes it possible to find a much more affordable place to stay in busy cities where there aren’t that many hotel rooms.
Regulations, however, often don’t really account for individuals renting out their own stuff. They usually assume that anyone providing such services is a company that does so as its business, and can undergo inspections, file for permits, and so on. Plus, these regulatory processes try to ensure that the products are safe and healthy, that nobody’s getting scammed, and so on.
The new-style collaborative consumption startups are solving the consumer protection problem in a bottom-up, social-media way: people rate buyers and sellers, and a strong reputation replaces a regulator’s review. This is what eBay did to give people confidence in buying things from strangers instead of from stores or established catalog companies.
There are the occasional horror stories, but then, regulators miss things, too. But Airbnb is illegal in most cities, and some cities are cracking down, often at the behest of the hotel industry or neighbors who don’t like strangers coming and going. Mainly the transactions happen outside the law’s blessing, it’s making buyers and sellers happy, not causing a lot of trouble, and eventually cities will probably adjust laws to come to terms with it.
What does this mean for ride sharing? Taxi rides are a particularly heavily-regulated area, with powerful driver lobbies that want to restrict the supply of rides. They weren’t happy about Uber, and really won’t be happy with ride sharing.
Plus, regulators have some legitimate fears. Cars can be really dangerous. Is it important to give people assurance they’re riding in a safe one? You’re under the physical control of another person. How can we be sure that person isn’t going to do bad things? A woman has accused an Uber driver of raping her; police investigated, but prosecutors aren’t pressing charges.
Are these roles the government should play? With Uber, many people argued that regulators ought to ensure the driver is well trained, properly licensed, and not a threat. They should ensure the car is safe and well-maintained. But don’t regulate the prices, since people can choose to ride Uber or not and don’t need the government to decide how much it should cost.
Now, ride sharing companies are essentially trying to take the next step. Must the drivers all have commercial licenses and commercial vehicles? Or can we let anyone sign up to give others rides? Can the companies, like SideCar, self-regulate?
Certainly it’s in SideCar’s, and Airbnb’s, and Uber’s interest to be sure everyone is safe. SideCar has extensive safety information on its site. One theory is that these companies will make sure it’s safe, or else go out of business. After all, it’s easy to spread a bad experience on Twitter, so even a small number of problems could earn the company a bad reputation.
The DC Taxicab Commission isn’t ready to embrace this. Having just created regulations for sedan drivers that regulate much less than they are used to, they’ll need more outside pressure if they’re going to let ridesharing get an even lighter regulatory touch. And should they?