Regulatory Overload

On Uber

BY GABRIEL HAMENT SRQ DAILY SATURDAY PERSPECTIVES EDITION SATURDAY SEP 5, 2015

The concept of “Creative Destruction” was first identified and explained by the world’s greatest critic of Capitalism, Karl Marx. Later coined by famed economist Joseph Schumpeter, Creative Destruction is the process whereby a new technology, product or process is introduced to an existing market subsequently rendering current products or services obsolete. Every businessperson, scientist and inventor is looking to find a way to deliver a product or service superior to those currently available to consumers. For example, Henry Ford not only revolutionized the automobile industry by perfecting the assembly line and paying his workers twice the typical hourly wage; he incidentally put carriage makers out of business. The result—automobiles rolling out of his factories even his workers could afford!

“One’s own employees ought to be one’s own best customers.”— Henry Ford

Fast forward to 2015 when the City of Sarasota is currently contemplating the passage of an ordinance that would impose onerous regulations on an innovative new mobile application dubbed Uber.

Here is how Uber works. First the user inputs their credit card information, then he/she “drops a pin” on a map indicating pick-up location and final destination. A quote for the ride is then generated. Then a nearby Uber driver acknowledges the request. A picture of the Uber driver and the model of the car are transmitted to the passenger’s phone. If the passenger accepts, the driver proceeds to pick you up. Upon arrival at the destination, your credit card is charged at approximately the same rate, give or take a few cents that was initially quoted. But—here is the key to Uber’s self-regulating genius—the passenger provides a rating of one to five stars and can leave a comment about the driver, the cleanliness of the vehicle, etc. If a driver’s average rating falls below 4.6 stars, Uber can deactivate the driver’s account.

Uber covers each of its drivers with $1 million of liability coverage per incident. In addition, Uber does its own county, state and federal background checks of each driver. Uber drivers cannot utilize a vehicle more than 10 years old. Quality control is further assured through the passenger rating system.

Why is the City proposing duplicative background checks, a mechanic’s inspection of the vehicle and a $35 licensing fee? To generate fees, of course, and to appease the antiquated taxicab industry. Is this the type of culture our City’s leaders should be promoting—one of over-regulation and backward-looking thinking? Or should Sarasota embrace the technological innovation of tomorrow? If our elected officials are serious about attracting and retaining its graduates and young professionals, building a well-diversified economy and competing with neighboring St. Petersburg and Tampa for good-paying jobs, they should make sure Uber stays!

Gabriel Hament, Sarasota

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