Editorial: Ride sharing ordinance misguided


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Most people who have spent time residing in big cities have been introduced to the services of ride-sharing. Companies such as Uber, Lyft, and Sidecar challenge the traditional taxi services by allowing customers to order and track rides on their phones.

This competitive advantage has allowed ride-shar ing to dominate the market in recent years. In Los Angeles, YellowCab LA, its largest taxi company, has experienced a 15 percent decrease in incoming calls after companies such as Uber began operating in the area. This comes after four-straight years of growth for YellowCab LA.

One of the reasons ride-sharing companies have become so successful is because they are not subject to the traditional regulations of taxi companies. Their cars do not have to have uniform color schemes. They don’t need to have a 24-hour dispatch. The cars are not subjected to stringent checks as taxis are. These are just some of the many rules that ride-sharing companies are exempt from.

Based in San Francisco, Uber is the largest of these ride-sharing companies. It operates in 53 countries and more than 200 cities around the world. The company has grown so quickly since its inception in 2009 that it is valued at more than $40 billion.

While Iowa City’s college demographics make it a perfect location for ride-sharing, chances are if you live in Iowa City, you haven’t experienced Uber. This is because ride-sharing companies have not yet expanded into town.

Unfortunately, although Uber has expressed interest in coming to Iowa City, this may not happen just yet. The City Council has decided to place ride-sharing companies in the same bucket as taxis in regard to regulations. A spokesman for Uber has indicated that if this ordinance passes, the company will not expand into Iowa City.

Given the advantage a service such as Uber would provide, the decision is disappointing. Uber has become popular in other Big Ten college towns, including Madison, Wisconsin, and Ann Arbor, Michigan, which have chosen to not lump ride-sharing in with taxi regulations. Additionally, Uber also operates in Des Moines and Cedar Rapids.

City Councilor Michelle Payne said one of the main reasons for the ordinance is safety.

While taxis are certainly more regulated than ride-sharing companies, this does not necessarily translate into safety. While both Uber and taxi companies require the drivers to undergo criminal-background checks, Uber has additional advantages. The Uber cars are consistently tracked with GPS, and the company also has a system in which passengers can rate the drivers. This means that before you get in a car, you know the driver’s reputation. 

Uber is also more lucrative and compelling for drivers. Its drivers have the flexibility to decide when they want to work. After a ride is completed, the driver keeps 80 percent of the fare. Unlike traditional taxis, which have a uniform price system, Uber can change its price depending on demand. When everyone wants a ride, prices can double or triple. The result is that in highly populated areas such as Los Angeles, Uber drivers can make up to twice as much as taxi drivers.

The Daily Iowan Editorial Board believes that the current taxi ordinance is a mistake. The success of ride-sharing companies in recent years is evidence that taxi regulations are outdated and hinder growth in the market. The solution to resolving the conflict between ride-sharing and taxis resides in eliminating and modernizing regulations so that taxi companies can compete. There is a strong demand for ride-sharing services such as Uber in Iowa City. Let’s have our city be a leader in this revolution.

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