Monday, February 4, 2013

Ridesharing / Hitchhiking 2.0: Yes, there's an app for that

Last week I wrote a somewhat quirky post about hitchhiking and ridesharing.  It appears this may be becoming a serious business.  Today I read an article about how a number of apps are now available to help people arrange rides and eliminate the need to "thumb it."  The interesting issue is that they are being challenged in court as potentially violative of taxi regulations, as some of the apps charge a percentage of "donations" that passengers give to drivers for a ride.  From the article:

Uber [one of the new apps] allows passengers to use their smartphones to summon luxury town cars and other vehicles driven by professional drivers. Customer credit cards are charged fares based on time and distance.
Lyft and SideCar describe themselves as community "ridesharing platforms" that connect riders and drivers, who use their own vehicles. After each ride, passengers are asked for a voluntary donation based on what others paid for similar trips. The companies take a 20 percent cut.
"We started Lyft to create a system for matching up people who need a ride with people who can offer a ride," said Logan Green, co-founder of San Francisco-based Zimride, which operates Lyft.
But taxi operators say the new ride services are little more than illegal cabs that don't have permits, pay city fees or follow regulations. The upstarts are also steering business away from cab drivers, making it harder to earn a living.
"It makes for an uneven playing field," said Barry Korengold, who heads the San Francisco Cab Drivers Association. "We're not trying to stifle technology. We're saying do it in the legal way."

It's a great story of how technology can revolutionize an age-old tradition, but also run afoul of norms--even the "new property" rights--established by regulating an industry.  These apps may not only permit people to get across town quickly, or find a nearby neighbor who shares a similar commute pattern, but also require us to reconsider how we regulate taxis and other "traditional" forms of ridesharing that are more centralized, and often less responsive, to decentralized demand.  Could the traditional, regulated taxi industry be the next victim of a mobile phone app?

Stephen R. Miller

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