If you were to ask a conservative on the street what his most fundamental belief is, he would likely say limited government. If you asked him about his second most fundamental belief, it would likely be free enterprise. Given these values, it should come as a surprise to conservatives that five Republican State House members, in addition to one Democratic member, have introduced a bill that will expand government regulation and throttle free enterprise in an entire service industry. H.B. 907, otherwise known as the “Uber Bill”, will heavily regulate the new ride sharing and ride referral industry which has boomed in cities across the country.
If you haven’t heard of them yet, Uber and Lyft are services which provide on-demand car rides ordered via smartphone apps. These startups take advantage of the mobile technology that 55 percent of all Americans now carry, and this is starting to hit traditional cab services where it hurts.
Lyft allows unlicensed individuals to become drivers, using their personal vehicles to shuttle anyone who requests a ride using the service. The service conducts background checks, driving checks, car inspections and offers $1,000,000 in excess liability insurance to its drivers — $975,000 more per driver than the minimum for Atlanta taxis. In addition, riders are prompted to review their drivers so good drivers thrive while bad drivers move aside.
Uber works in a similar fashion, but allows you to call employee drivers at the wheel of a few types of cars, including sleek Lincoln Town Cars and SUVs, both in black. Like Lyft, Uber also insures its drivers, who are licensed limo drivers, and conducts background checks. Riders are prompted to review their driver at the conclusion of the trip. The Uber model has already expanded to over 70 cities on six continents to wide acclaim, particularly in the 21-35 age range.
So what does H.B. 907 do? First, it allows the Georgia Department of Public Safety to charge up to $100 annually to license drivers. Drivers must also obtain a “certificate of public necessity and convenience or medallion.” The average price for one of Atlanta’s 1,600 certificates Atlanta created? $36,958.50 in 2010. For Uber or Lyft to acquire these, they would have to buy them at huge markups from taxicab companies, not exactly their best friends.
While the medallion requirement alone is abusive to free enterprise, the bill adds several other fees, in addition to extra regulations. There are additional safety regulations placed on the companies, including “reviews” of all background checks and car inspections by state agencies, creating more paperwork and expenses for both the startups and government functionaries.
The bill even wipes out price specials, frequent promotions and other unconventional methods that Uber is capable of offering through its app. Uber’s fascinating experiment in free market pricing, price surges, will be gone. Price surging occurs on unusually busy nights (like New Years Eve) when demand skyrockets. The company uses analytics to automatically raise rates so that the supply of willing drivers more closely aligns with demand. This is innovation in action, yet five of our state house Republicans are attacking it.
Though the bill claims to regulate in the name of safety, by throttling these services H.B. 907 will diminish the options of (mostly young) people who wish to go out on the town, have a few drinks and then be driven home. As the constant stream of DUIs in Athens attests, limiting partiers’ transportation options may be a public health risk, rather than a boon.
THE EDITORS: Blame crony capitalism.
By reacting to a new enterprise with fees and regulations, Georgia puts out the message that it’s not friendly to entrepreneurship and innovation, two ideals that conservatives should always fight for — not against.
—Colin Daniels is a junior studying political science and public health
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