By Tom Still
MADISON – In a city that prides itself on being among the
nation’s most “techie,” there has been a decidedly un-techie reaction to the
arrival of two ride-sharing companies that have challenged the status quo of
traditional taxi services.
The city of Madison has cast a wary eye on the arrival of
Lyft and Uber, companies that use smartphone applications to match riders with
drivers who use their private cars. Young professionals love the idea; city
regulators with worries about driver safety, insurance and even red-lining of
poor neighborhoods are much less enamored.
It’s just the latest example of how technology is outrunning
the ability of regulators to keep pace. If regulators are truly intent on
protecting the public, trying to stay ahead of the curve is legitimate. It can
be counter-productive and even futile, however, if regulators seek to “fence
in” incumbent markets and to limit consumer choice.
Lyft and Uber, themselves competitors, have been the darling
of venture capitalists of late, raising hundreds of millions of dollars to fund
expansion in the United States and beyond. The companies have gained traction
in some U.S. cities – Lyft launched in Milwaukee last week to much less
controversy – but have been banned or practically so in others.
Still, investors are betting on the long-term customer
appeal of being able to use a mobile phone app to connect with a willing ride
versus calling a snarly dispatcher who may not care how long you wait at the
airport.
Read this column in the Wisconsin State Journal here.
In Madison, Mayor Paul Soglin has said he’s not buying the
notion that Uber and Lyft only seek “donations” for ride-sharing services. Cab
companies agree, saying ride-sharing is really a matter of bringing a passenger
from Point A to Point B for a fee – which sounds a lot like a taxi service, to
them.
The ride-sharing companies contend they’re really technology
companies making the marketplace more efficient. In some cities, they’ve been
adept at gaining crowd-sourced support, with many of their customers openly
accusing local officials of having grown too cozy with existing cab companies.
The clash between technology and regulation is not confined
to ride-sharing, of course. Consider these issues in which the global nature of
technology is changing how, when and where governments can exert regulatory
influence:
– Bitcoin is a peer-to-peer payment system, introduced
as open source software in 2009, that could shake up how the world moves money.
The digital currency created and used in the system is also referred to as a
virtual currency, electronic money or crypto-currency because cryptography is
used in its creation and transfer. The bitcoin system is not controlled by a
single entity, such as a central bank, which prompts concerns it may be used
for illegal activities. Proponents see bitcoins as long-term investments or a
hedge against their own country’s unstable currencies. While some governments
have taken a hands-off approach, others have moved to regulate bitcoins or
similar crypto-currencies.
– The internet has been largely a sales-tax free
zone for years, primarily due to a 1992 U.S. Supreme Court decision which held
that mail-order merchants did not need to collect sales taxes for sales in
those states where they did not have a physical presence. Local resistance to
that rule has grown, over time, in part because traditional merchants think it
is unfair and local and state governments want the revenues. The Streamlined
Sales and Use Tax Agreement has aligned about 40 state governments, including
Wisconsin, in finding internet taxing solutions that simplify a complicated
process.
– “Net neutrality” is a debate that often gets
lost in legalistic terms, but it boils down to the notion that the electronic
pipes carrying our information online should be “dumb” — just like our phone
lines. If the pipes are too smart, internet service providers could
discriminate or prioritize some content, websites, apps or users over others.
While it’s largely a federal issue, some state and local governments have
gotten involved because they fear a widening of the “digital divide” between
rich and poor, or the loss of educational services that cannot compete for
Internet bandwidth.
Global markets and technologies have created new challenges
for regulators, and for consumers who must decide if they need to be
“protected” or given more choice to think for themselves. Cities such as Madison,
which promotes itself as a haven for young, tech-savvy professionals, should
recognize that embracing innovative industries and people sometimes means
taking a fresh look at regulation.
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