Ride sharing services have been in the news lately in ways that are both challenging and promising for the industry’s future. Uber has been banned in London and is likely to pull out of Montreal and other cities in Canada’s Quebec province, because of new regulations that it feels are too stringent. But there is progress on developing autonomous vehicles that can ultimately make the companies more profitable and their services potentially more affordable — at the expense of drivers whose jobs will eventually be eliminated or at least scaled back.
In London, the regulatory agency Transport for London, declared that Uber was not “fit and proper” to offer private car service, arguing that it demonstrated “a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications.”
The agency cited Uber’s approach to reporting serious criminal offenses of its drivers, how medical certificates are obtained and other concerns. Uber said it will appeal the ruling but its new CEO, Dara Khosrowshahi has nevertheless apologized “for the mistakes we’ve made.”
While the ink was still fresh on the London order, Uber announced that it’s pulling out of Quebec province rather than follow new regulations, including that its drivers undergo 35 hours of training as is already required for the province’s taxi drivers. Unless something charges, Quebec residences will say Au Revoir to Uber on Oct. 14th.
I’ll leave it to others to debate whether these disputes should ultimately be resolved in Uber’s favor, but they bring up issues not only for ride sharing, but for other tech-enabled businesses. Uber, Lyft, Airbnb and even voice over internet (VOIP) companies that are attempting to disrupt regulated industries have long been under pressure from incumbent players and some regulators who worry that they create unfair competition because they don’t play by the same rules as legacy companies.
It’s even true for Amazon and other e-commerce firms which, for many years avoided collecting state sales taxes based on old mail-order rules. Those rules exempted businesses from collecting taxes from buyers outside the state where they were based. Until 2012, Amazon customers in California enjoyed not having to pay sales taxes on Amazon purchases, which meant that Amazon was able to effectively offer a discount as high at 9.75 percent without having to forgo a penny in profits.
That didn’t sit well with local businesses who couldn’t offer their customers that state subsidized discount but nevertheless had to pay rent on their storefronts, employee salaries and state and local taxes. By law, consumers were supposed to report those purchases and pay taxes on their state returns, but that regulation was mostly unenforceable.
Airbnb has also been under fire from several municipalities based on complaints from hotel operators as well as regulators objecting to its impact on communities, including removing long-term rental units from neighborhoods.
Palo Alto doesn’t regulate short-term rentals, and I’m not particularly happy that the owners of the largest single family house in my residential neighborhood have moved out and turned their house into an Airbnb. That home was once the scene of an extremely noisy and very crowded party of mostly high school-aged kids, one of whom left a half empty liquor bottles in our yard after jumping our fence to escape the police who rousted the party. The manager promised this would never happen again and it hasn’t, but we still frequently put up with multiple cars on our street, sometimes blocking the sidewalk.
In news of self-driving cars, Ford announced it’s joining Lyft’s “open platform” to develop software to empower autonomous vehicles. Several other companies including Alphabet’s Waymo and General Motors (a Lyft investor) are already working with Lyft, while Uber been testing autonomous cars in several cities including San Francisco and Pittsburgh. Ford and most of its competitors are accelerating their research into self-driving technology. And Santa Clara-based chip maker Intel is now helping to drive this technology with its acquisition of Mobileye, an Israeli-based vehicle automation technology pioneer.
Taxi drivers who now feel threatened by Uber and Lyft better tighten their seat belts and start thinking about other careers as self-driving vehicles start to become a reality. The Bureau of Labor Statistics estimates that nearly 190,000 people are employed as taxi drivers and chauffeurs and that doesn’t apparently include the hundreds of thousands of people who drive for Uber, Lyft and other ride sharing services.
If you really want to understand the long-haul implications of automation, consider the fate of the millions of truck drivers in the U.S., who could also lose their jobs once robotic trucks take over. Freightliner has already introduced the Inspiration, the country’s first licensed autonomous truck, that’s already on the road in Arizona. Tesla is likely to soon announce an all-electric truck and, if it’s like its cars, it will immediately support “auto pilot” that allows for hands-free highway driving with plans for complete autonomy when the software and regulatory environment are ready for it.
Professional driving jobs won’t go away in the next few years and there will probably always be a demand for some drivers, but — for the most part — driving jobs will be about as scarce as those of typesetters, switchboard operators and many other professions that are now fully or nearly extinct.
As per the “sharing economy,” it’s here to stay, but — for the time being at least — its players have to figure out how to “share the road,” so to speak with incumbent legacy companies, play by the rules and be good neighbors and corporate citizens.
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