Cab companies, normally at odds with each other, are banning together to combat Uber.

Uber, a ride-sharing company recently valued at $18 billion, came onto the scene in San Francisco in 2009. Five years later, the company is operating in over seventy cities worldwide. Uber is disrupting the current taxicab market with its use of cutting-edge technology platforms to connect ride-seekers with drivers and its ability to sidestep regulations, rules, and licensing requirements that cab companies must follow.

Cab companies take issue with the latter Uber-advantage; attorney John Lally, who represents the interests of cab companies operating in Prince George County, Maryland said, “This has caused us to form an alliance to make those guys play by the same rules that we have to play by.” On August 6th, the Maryland Public Service Commission ruled that Uber must follow state regulations for passenger-for-hire services and characterized Uber as a ‘common carrier’ – a small victory for cab companies. Uber, however, plans to appeal this decision claiming that it is a technology company rather than a transportation company, and plans to “continue to defend the rights of riders and drivers to have access to the safest, most reliable transportation alternatives on the road.” Maryland is the first state to classify Uber as a ‘common carrier.’

Uber has a different perspective on the cab companies’ solidarity – instead, referring to it as the ‘Big Taxi cartel.’ On August 19th Uber announced it had hired David Plouffe, Obama’s former campaign advisor, to help win a fight that it has analogized to a political campaign against the ‘Big Taxi cartel.’ Regarding his recent appointment, Plouffe said, “I look forward to doing what I can right now to ensure drivers and riders are not denied their opportunity for choice in transportation due to those who want to maintain a monopoly and play the ‘inside game’ to deny opportunity to those on the outside.”

Regardless of whether the ‘Big Taxi cartel’ wants to maintain a monopoly or the cab companies want everyone to play by the same rules, it will be interesting to see if other states will follow Maryland’s lead.

– Erin Webb

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One Response to An Uber Vexation Facilitates Solidarity Among Cab Companies

  1. Lawrence Crane-Moscowitz says:

    I find Uber to be a fascinating litmus test when thinking about how technology and regulation interact.

    The company’s ethos is often described as reflecting CEO Travis Kalanick’s neo-libertarian worldview, where ‘disruption’ is solely a positive. In comments he’s previously made to Techcrunch, Kalanick has expressed disdain for regulatory agencies, describing them as knee-jerk organizations, captured by cronies and overly sensitive to “the public’s view.” http://techcrunch.com/2012/09/12/ubers-travis-kalanick-on-regulators-you-have-to-grit-your-teeth-be-a-warrior-or-do-something-less-disruptive/

    David Plouffe’s hiring though, could be thought of as a possible counterbalance to that worldview. Politico has noted that Plouffe might be well positioned to “influence” rules under consideration by the Departments of Commerce and Transportation. The idea of national standards would probably not be endorsed by a textbook libertarian, but even Kalanick has been quoted as saying (jokingly) that he’s “trying to find some angle where [he] can just say all this corrupt stuff just comes down to the federal thing.” http://www.politico.com/story/2014/08/david-plouffe-uber-110366.html

    As of today though, it seems like Mr. Plouffe may be of more use overseas, since Germany just banned Uber’s flagship product. http://www.bbc.com/news/technology-29027803

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