Editorial: Too much regulation will zap Uber’s edge
The Michigan Legislature is considering several bills related to the ride-sharing industry, which is flourishing in cities like Detroit, Ann Arbor and Toledo in recent years. App-based services suc as Uber and Lyft have given many customers a reliable transportation alternative, and lawmakers shouldn’t stomp on this business model.
Yet that’s what the Senate is trying to do with legislation that would bring restrictive regulations to ride-sharing. Some want to make Uber and similar services operate like taxi and limo companies, but ride-sharing is not the same model and shouldn’t be treated as such.
The two Senate bills would introduce onerous restrictions that subject the technology companies to the same regulations as the limousine industry. Further, the legislation would let individual municipalities set their own regulations, creating a patchwork of inconsistent rules.
Sen. Rick Jones R-Grand Ledge, who introduced both bills, said he wants “Uber to be prosperous,” but also expressed frustration that Uber doesn’t have what he believes to be “proper Michigan medical insurance on their passengers” in the event of a crash.
Mike White, general manager for Uber’s Detroit office, disagrees with Jones and said safety is something that Uber takes very seriously. Currently, a passenger driving in an Uber car is covered with commercial liability insurance for the duration of the trip.
The House is offering a more reasonable solution that would establish an even set of regulations for Uber and Lyft across the state. This legislation would require that transportation network companies hold a certain amount of insurance, get annual vehicle inspections and only use licensed drivers with good driving records, among other stipulations. And local governments couldn’t add extra regulations or ban ride-sharing companies.
These bills would protect the consumer, while not squashing the innovation of the industry.
“Uber and other transportation network companies could be the future of transportation,” said Rep. Tim Kelly, R-Saginaw Twp. He introduced similar legislation last session.
The bills would require the drivers in ride-sharing networks to have $1 million in insurance coverage — two to three times the amount required in taxis.
“Currently Uber operates unregulated in Michigan — we want them to be under some regulation,” Kelly said.
Both White and Lyft representative Chelsea Wilson said their companies aren’t opposed to regulation as long as it is aimed at safety and not increasing the barriers to entering the market. White said that a uniform set of regulations throughout the state would let Uber expand into more communities.
Michigan cannot afford to stay stuck in the old taxi model of regulation, killing travel innovation and job opportunities for its residents. Uber and Lyft provide a high quality service, often for a lower rate than traditional taxis.
The Legislature should offer ride-sharing companies a boost — not limit them with unnecessary interference.