The Massachusetts House of Representatives had honorable intentions when it recently passed legislation imposing new regulations on ride-hailing companies such as Uber, Lyft, and (Boston-based) Fasten, but the House bill will make it harder for people to move efficiently and affordably around the state.
The bill improves safety, but would perpetuate an outdated regulatory scheme, stifle competition, and discourage innovation at a time when our transportation system desperately needs creative solutions to keep the region moving.
Over the past four years, these ride-hailing services, sometimes called transportation network companies, or TNCs, have upended the taxi industry, but been a boon for riders, who now find it far easier and less costly to get from point A to point B. TNCs have also benefited some drivers. Many TNC drivers are former cabbies who can now operate their own vehicle rather than having to drive for a taxi-medallion holder. Other drivers take advantage of the flexible hours offered by TNCs to supplement their incomes while they pursue a degree, start a business, care for family members, or interview for their next full-time job.
The state Senate should keep the following principles in mind when it takes up the bill.
Balance safety with opportunity
Safety is the most important consideration. The Senate should adopt Governor Baker’s proposed approach, requiring TNCs to conduct background checks and working with them to develop a framework for preventing potential problem applicants from becoming drivers.
Cooperation with law enforcement is also critical. TNCs should be required to immediately release driver, rider, and trip data when requested by police. This would be a vast improvement over the incomplete, handwritten trip logs taxi drivers have kept for decades. The House wisely did not require fingerprinting of drivers. Nor should the Senate, as that would be an overreach, one that would likely discourage new drivers from joining, without significantly improving overall safety. Taxis and TNCs have important differences, which means they should be regulated differently. For example, TNCs do not accept street hails. And the location of TNC rides is tracked in real time, so riders and drivers can always pinpoint where they are. It’s partly because TNCs are so much safer that they are also more popular with riders and drivers.
Promote access and mobility
The House bill prohibits TNCs from picking up at Logan Airport or the Boston Convention and Exhibition Center in the Seaport District (but inexplicably allows for pick-ups at the Hynes Convention Center in the Back Bay) for a period of five years. The final bill should allow TNCs to pick up passengers anywhere in the state. Blocking TNCs from high-demand locations is nothing more than protectionism; it contradicts the notion that the legislation seeks to create a level playing field.
Indeed, there is plenty of demand at Logan to accommodate both cabs and TNCs. There are 1,850 taxi medallions in Boston, yet Logan generates more than 6,000 taxi rides every day. Both visitors to Boston and residents returning home should have access to TNCs curbside at Logan. One real way to level the playing field is to require that all TNC vehicles pay the Massport taxi-pool fee.
Historically, Massachusetts municipalities have been responsible for regulating taxis. In a region in which many trips cross municipal lines, this has never made much sense. How often have you attempted to hail a cab in the rain or snow in Boston, been happy to see an empty taxi approach — and then discovered the cab is from Cambridge or Somerville and thus is prohibited from picking up in Boston? TNCs, which operate regionally, have made this traditional regulatory framework obsolete. Further, local transportation boards are not well equipped to oversee these services. We can’t allow municipalities to create a patchwork regulatory system that doesn’t reflect how things actually operate. Better to place control at the state level.
Overregulation raises the cost of doing business and stifles innovation. This makes it harder for new competitors to join the industry, which in turn harms riders and drivers — even as it helps established players like Uber, Lyft, and the taxi industry. We shouldn’t be building barriers to entry unless they are unambiguously in the interest of riders.
Our Commonwealth’s transportation policies need to promote safety, affordability, innovation, and ease of use. As we enact new regulations for TNCs, we can’t lose sight of those broader objectives.
Richard Davey is a former Massachusetts secretary of transportation. Christopher Dempsey is a former Massachusetts assistant secretary of transportation and a member of the Brookline Transportation Board, which regulates taxis and ride-hailing businesses.