In case you haven’t heard, Uber and Orlando are frenemies. Sure, they work together, but they don’t have to like it. So what’s the beef all about? The enactment of a new local ordinance (Orlando Ordinance 2014-64 made enforceable February 1, 2015), requires rideshare drivers to pay a $250 vehicle permit and charge a minimum fare of $2.40, more than double Uber’s $1 base charge. These charges have been said to serve no practical purpose other than to prevent competition between “transportation network companies” (TNCs) and veteran yellow cab companies like Mears. Wait. Prevent competition and innovation? That doesn’t sound very American.
Since its enactment, there have been little, if any, citations issued to unpermitted drivers. Could this be because hiring an Uber is notoriously inconspicuous? Is it because Uber promised to reimburse drivers for any citations they may receive, thereby de-incentivizing drivers to obtain permits? Or perhaps our local code enforcement officers simply choose not to tilt at windmills? It is, after all, fairly obvious the rideshare model is revolutionary to the transportation sector and intends to grow onward and upward. Even market trend-setter Apple shared some Uber love: at Apple’s “Spring Forward” event in San Francisco on March 9, 2015, the company unveiled the Apple Watch and fired up the Uber app to demonstrate how to hail a cab from your wrist. Apple doesn’t just hitch its wagon to any ol’ company. With all the positive reinforcement going on, it’s no wonder rideshare drivers seem unfazed by local ordinances.
Legally, the ordinance and other similar laws attempt to regulate TNCs as if they are taxicabs. This has forced Uber’s existential crisis: am I a taxicab subject to regulation under the Department of Transportation? Regulations are reserved for licensed industries, and the DOT imposes regulatory framework upon traditional taxicab companies. TNCs such as Uber, however, are merely cab brokers who provide smart-phone apps to sign up drivers (using their own vehicles) and match them with passengers. Uber sets the rates depending on market conditions. The TNC business model is arguably a market economy subject to competition, not government oversight and regulation. The inability to compete is generally the death toll to innovation, change and advancement. Need an example? Larry Downs from Forbes magazine puts it perfectly: “Look inside a typical taxicab today and you’ll find little in the way of technological sophistication. Just a meter (introduced in 1897), a two-way radio (circa 1940), and maybe a GPS device (not likely–after all, getting lost earns you more money).”
This doesn’t mean our fair City’s ordinance is completely misplaced. It certainly has teeth if enforced, and crafting regulatory framework around TNCs is a current national trend for state and local governments. But for now, Orlando’s ordinance seems fairly benign. Perhaps its enactment was a respectful tip-of-the-hat to our veteran yellow cab companies, who have always been subject to state and local regulation.
Naturally, there will soon be bigger fish to fry. The State of Florida is currently contemplating statewide regulation over TNCs. (They just can’t help themselves!) Senate and House bills have recently been filed: the Senate version will require insurance and background checks and impose fees similar to Orlando’s ordinance; the House bill will require the same insurance and background checks, but will preempt local regulation. The best approach may be to impose a minimum regulatory framework, and then watch and see how the industry develops.
For now, take solace in participating in the new global “sharing economy”. Hire an Uber to take you to your Airbnb condo, and share your experience on Facebook. Our online community is fairly new to lawmakers (who are generally not on the cultural forefront of innovation), so give them a chance to craft some basic rules and ride on, Orlando, ride on….
Contributor Vanessa Louise Braeley, Associate Attorney with NeJame Law