A bill passed last week by the Massachusetts House to regulate ride-service companies was all about compromise, which is why vested-interest parties on either side of the issue were so displeased. Uber and Lyft complain that the law would stifle competition and reduce consumers’ choices. Taxi-industry advocates say the bill doesn’t do anything meaningful to keep debt-saddled drivers from going bust. They’re both right.
Attention has centered on a provision that stipulates more rigorous background checks for Uber and Lyft drivers. Unlike cabbies, they wouldn’t have to submit to fingerprinting. Reasonable people disagree on the fairness of that, but another part of the bill is clearly misguided and should be dropped when the Senate takes up the legislation. In an effort to protect cab drivers from extinction, the law would extend for five years an existing ban on most ride-sharing cars at Logan airport, and apply the same prohibition to the Boston Convention & Exhibition Center.
Representative Aaron Michlewitz, who cochairs the Joint Committee on Financial Services, said the idea is to give cab drivers time to “catch up with technology” while “creating short-term value” for taxi medallions, the transferrable permits that limit the number of cabs in Boston to 1,825. Medallions used to fetch as much as $700,000, but prices have been in freefall since the arrival of Uber and Lyft — current sale listings on the website DriverZoo are as low as $180,000.
Legislators are trying to put the brakes on innovation, at the expense of consumers, while failing to acknowledge a tough truth: The taxi industry is struggling mightily. Uber and Lyft are popular for a simple reason — they’re superior to taxi services. The notion that someone landing at Logan can’t call for an Uber or Lyft car is absurd, and embarrassing for a city that bills itself as a center of forward-thinking. The companies have been able to negotiate operational arrangements with airports in other cities, so why not Boston?
“We should give riders and drivers the options they have come to expect in global cities,” Uber said in a statement. Lyft took a similar stance, saying, “travelers benefit when it’s easy to get an affordable, convenient ride to or from the airport.”
The bill doesn’t do taxi drivers any favors, either. It keeps in place strict pricing rules that make it impossible for cab drivers to stand a chance of competing with Uber and Lyft, outside of the artificially protected airport and convention center zones. More important, the proposed law ignores the medallion problem. According to Donna Blythe-Shaw, who represents the Boston Taxi Drivers Association, about 620 medallions are owned by individuals, some of whom are on the brink of bankruptcy. “They bought them with the understanding they had a license to work exclusively,” she said.
Blythe-Shaw, who called the House bill “disingenuous,” concedes that the industry shares responsibility for its current state “by not paying attention to changing needs.” That’s an understatement, but taxi drivers who operated within the narrow parameters of a heavily regulated trade deserve some kind of assistance, like zero-interest loans or partial bailouts. Financial ruin shouldn’t be their only way out. Five years of guaranteed income at Logan, Blythe-Shaw said, “isn’t going to make a real difference.”
But there’s a risk that the cab industry won’t exist in five years. Instead of trying to manipulate the market, city and state officials should face that reality now.