Need a lift? Uber offering free rides to the polls on Election Day
The 2018 midterm elections are just around the corner and if you need a ride to the polls on Nov. 6? Ride-sharing app Uber has you covered. The company is planning to offer free rides on Election Day as part of a larger effort to “drive the vote” by going the extra mile to support the democratic process. To help the millions of Americans who cite transportation barriers as the reason they don’t vote, Uber will be partnering with #VoteTogether and Democracy Works to provide free rides to the polls. Uber’s decisions follows that of its primary competitor, Lyft‘s August announcement that the company will offer riders half-off rides booked anywhere in the U.S. on Nov. 6 in conjunction with Vote.org and TurboVote who will help distribute the nationwide 50 percent off code that can be used within the Lyft app. According to Fortune, Lyft is working with groups such as Voto Latino to help get underserved communities to their polling stations.
Ridesharing gets the green light in Alabama
Ridesharing companies like Uber and Lyft got a final green light to operate statewide from the Alabama Senate on Tuesday. The body passed the House-originated version of the ridesharing bill by a vote of 27-0, which will send the legislation to Gov. Kay Ivey‘s desk to sign it into law. The legislation would create a consistent regulatory framework for ridesharing companies across the state and eliminate the haphazard, confusing patchwork of differing municipal laws and regulations. Instead, ridesharing companies would be placed under the control of the Alabama Public Service Commission (PSC), and single permit issued by the PSC would then allow the companies to operate statewide. Ivey announced her support of the legislation last month. “To embrace the future, Alabama must accommodate modern transportation demands. The ability to request an on-demand ride is no longer considered a perk of being in a big city, it is an expectation no matter where one lives or work,” Ivey said at a press conference. “Having consistent rules statewide for ridesharing is the sensible way to give Alabamians access to safe, consistent and efficient transportation options.” Following its passage, Uber spokeswoman Evangeline George issued a statement thanking Ivey and the bill’s sponsors for their leadership in helping pass the legislation. “In passing one clear set of rules for ridesharing, the Alabama Legislature stood with students who need safe rides home late at night, seniors who need rides to their doctors, and commuters who need rides to work,” George said. “We thank Governor Ivey, Representative Faulkner, and Senator Singleton for their leadership and look forward to expanding access to Uber’s safe rides and flexible work opportunities throughout the state.” Lyft spokesman Scott Coriell issued a statement of support as well. “Ridesharing services like Lyft are providing tens of thousands of Alabamians earning opportunities and transportation options that did not exist a few short years ago,” said Coriell. “We’re excited that the legislature has acted to expand these benefits to more individuals around the state, and we look forward to working with the Governor to get this bill over the finish line.” Alabama is one of only six states that lacks statewide ridesharing regulations. Once signed by Ivey, the legislation will allow Alabamians from not only the larger cities, but also suburban and rural communities across the state to take advantage of all benefits the ridesharing industry produces.
Ala. Senate gives ridesharing companies a green light to operate statewide
Ridesharing companies like Uber and Lyft got a green light to operate statewide from the Alabama Senate on Thursday. The body passed SB143, which would create a consistent regulatory framework for ridesharing companies across the state and eliminate the haphazard, confusing patchwork of differing municipal laws and regulations. Instead, ridesharing companies would be placed under the control of the Alabama Public Service Commission (PSC), and single permit issued by the PSC would then allow the companies to operate statewide. The bill, sponsored by Greensboro-Democrat state Senator Bobby Singleton received bipartisan support and passed the chamber unanimously. Alabama is one of only six states that lacks statewide ridesharing regulations. If passed, the bill would allow Alabamians from not only the larger cities, but also suburban and rural communities across the state to take advantage of all benefits the ridesharing industry produces.rural communities across the state. “This is a perfect example of a bipartisan bill that works for all Alabamians,” Senate Majority Leader Greg Reed said. “Installing this regulatory framework is going to provide folks all over the state another choice in transportation, ensure safe operation for both drivers and riders, and pave the way for more jobs in the state.” Because of a lack of statewide regulations, ridesharing companies like Uber and Lyft operate in only fifteen of the larger cities in Alabama: Auburn, Birmingham, Daphne, Gardendale, Gulf Shores, Homewood, Hoover, Huntsville, Mobile, Montgomery, Mountain Brook, Pelham, Tuscaloosa, Trussville and Vestavia Hills. “This is important to the state of Alabama because ride-sharing is the new trend across the United States. If we pass this legislation, we will be the 45th state in the U.S.,” Singleton remarked. “It’s important for us as a state to keep up with trends. This will allow citizens in the state of Alabama to be employed and it will allow people who don’t have transportation to be able to move around in their cities.” Uber’s public affairs manager Nick Juliano praised Alabama lawmakers for passing the bill. “The Alabama Senate took the first major step today in making sure that people in every corner of our state have access to reliable, affordable transportation,” Juliano said. “By expanding ridesharing services to all of Alabama, this legislation will create thousands of new jobs. We are grateful to members of the Senate for their support of this pro-growth initiative that will make Alabama the 45th state in the nation to adopt a statewide ridesharing law.” SB143 now moves to the House of Representatives for consideration.
Ridesharing bill on the move in the state Senate
Ridesharing services like Lyft and Uber took a step toward to becoming legal in Alabama, as the Senate Tourism and Marketing Committee approved a bill on Thursday that will now head to the full Senate for further consideration. The would create a ridesharing network across the state for companies and place it under the control of the Alabama Public Service Commission (PSC). A single permit issued by the PSC would then allow the companies to operate statewide under uniform regulations rather than requiring each municipality to file for their own permits and regulations. Alabama is one of only six states that lacks statewide ridesharing regulations. If passed, the bill would allow Alabamians from not only the larger cities, but also suburban and rural communities across the state to take advantage of all benefits the ridesharing industry produces. Currently, ridesharing companies like Uber and Lyft operate in only 15 of the larger cities across the state —Auburn, Birmingham, Daphne, Gardendale, Gulf Shores, Homewood, Hoover, Huntsville, Mobile, Montgomery, Mountain Brook, Pelham, Tuscaloosa, Trussville and Vestavia Hills — but due to a lack of comprehensive, statewide regulations aren’t able to operate in all parts of the state. On Jan. 11, Mountain Brook-Republican State Rep. David Faulkner introduced the House companion bill, HB 190.
Daniel Sutter: The new power of sharing
Economic growth often involves new factories manufacturing more goods for us. But new forms of economic activity also contribute to prosperity. Ongoing innovations in the sharing economy can increase our standard of living without providing more goods. The best known firms in this new sector are ride- and home-sharing services Uber, Lyft, Airbnb and Home Away. These companies enable people to provide rides or lodging using their own cars or residences in exchange for payment. The use of existing cars and homes is the element of sharing. Many successful businesses have long facilitated sharing. The Uber and Airbnb examples show us that taxis, car rentals, and hotels all represent businesses built around sharing. Lawn services, bowling alleys and libraries also involve sharing. A lawn service uses its mowers to mow one lawn after another. By contrast, the mower you own and use sits in the garage most of the time. The new forms of sharing typically employ new technology, including the internet, smart phones, and social media. Technology is reducing transaction costs, which are the costs of carrying out buying, selling, and trading. Transaction costs often go unnoticed in the retail sector, but only because many innovations have routinized shopping at grocery or department stores, or now shopping online. Commerce-facilitating innovations include department stores, brand names, advertising, and credit cards. Many economists overlook transaction costs. But economists Douglas North and Oliver Williamson won Nobel Prizes for studying transaction costs. Some economic historians now view transaction cost reducing institutions as the fundamental source of modern prosperity. The market for used books illustrates how lower transaction costs make new trades profitable. The great challenge for exchange here is for sellers to find buyers interested in their books. Used bookstores offered a place for buyers to go to find a decent selection of titles. The excitement of discovering books you really wanted, however, really highlighted the limits of the process. Today anyone can buy or sell almost any book on Amazon Marketplace or eBay. Many new forms of sharing take the rental model. Social media allows the borrowing of tools, cookware, and trucks among a wider circle of friends. Extending borrowing circles is crucial in allowing people to find needed items. Sharing economy businesses are facilitating trading. And different modes of sharing exist. Uber offers rides by others, while Zipcar and Car2go rent cars owned by these companies for people to drive. Zipcar used technology to automate the rental process, allowing cars to be parked near where customers live. Most sharing economy businesses are really marketing innovations that reduce transaction costs. Airbnb’s background checks and rating systems, for example, increase the number of people willing to rent their homes, or pay to stay in a stranger’s home. Wise sharing will allow Americans to own less stuff, and the self-storage industry illustrates how valuable this might be. Today over 55,000 facilities nationwide have 2.5 billion square feet of space and earn annual revenues of $27 billion. About 10% of households rent a unit, and 65% and 47% of customers already have a garage or an attic – and still pay for more room. Sharing will let people tie up less of their wealth owning things that they rarely use. A University of California study found that each Car2go vehicle reduced the number of cars operated by residents of a city by 7 to 11. Essentially this means that one shared car can replace up to ten. Sharing allows people to avoid car payments, insurance, and parking, instead renting only when needed. A University of Massachusetts study estimates that many households could benefit $275 per year, which could rise to $1,000 with really extensive sharing. These savings will increase our prosperity, primarily by allowing peoples’ incomes to go further. We will instead have new and less expensive ways to access things we want to use. Innovative uses of technology constantly improve our lives, often by reducing transactions costs. The sharing economy is doing this today, providing an example where less is more. ••• Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.
Daniel Sutter: Drones, self-driving vehicles, and the future
Two firsts occurred recently for drones and self-driving vehicles. On June 30, the first highway death in a self-driving car occurred when a Tesla Model S on autopilot hit a tractor-trailer near Gainesville, Florida. Then in July, a Reno, Nevada, 7-Eleven conducted the first Federal Aviation Administration (FAA) approved drone delivery. The historic delivery included Slurpees, donuts, coffee, and chicken sandwiches. Drones and self-driving systems for vehicles are both emerging under Federal regulation. While we need rules governing these technologies, the government can also make rules to protect established commercial interests. Whether politics will bless these technologies or block them to protect established economic interests remains to be seen. So far regulators are allowing development. In June the FAA released its long-awaited rules for commercial drones, to replace the current system of special permits. Drones will have to be registered and operated by holders of a drone pilot license, with operation at night or out of the pilot’s sight restricted. Many commercial users seem ready to move forward under these rules. National Highway Traffic Safety Administration (NHTSA) director Dr. Mark Rosekind strongly supported self-driving vehicles last month in San Francisco. This was noteworthy, because although self-driving cars have had encouraging road tests, the inevitable fatal accident could have afforded an opportunity to apply regulatory brakes. Dr. Rosekind announced in San Francisco, “I can tell you that no one incident will derail the Department of Transportation and NHTSA from its mission to improve safety on the roads by pursuing new life saving technologies.” Drones and self-driving cars illustrate the never-ending economic clash between the past and the future. The successful economic practices of the past have built the established businesses of today. New products and technologies threaten established businesses. Life is good in America today, with a high standard of living, people living longer than ever, and the ability do things that would have been unimaginable 100 years ago. For the future to prevail over the past, we must be able to envision how a future that does not exist yet could be even better than today. Both drones and self-driving cars could significantly improve the future. The Association for Unmanned Vehicle Systems International projects that drones could generate $14 billion in economic value annually within three years. Such projections are often self-promoting hooey, but uses for drones in surveying and agriculture surely indicate enormous potential value creation. And I await drone package delivery from Amazon. The benefits of self-driving vehicles loom even larger. Over 30,000 fatalities and 2 million injuries occur on America’s highways annually. The NHTSA calculates that if we put a dollar value on all of the losses, auto accidents cost our nation $1 trillion a year. And 94% of traffic accidents are attributable to driver error. Even assuming an occasional crash, self-driving cars could potentially eliminate a majority of accidents. Self-driving cars could provide the handicapped or elderly mobility comparable to other Americans. Adults could consume alcoholic beverages without killing or injuring themselves or others when driving home. Americans drove 3 trillion miles in 2014, and these drivers’ time could be freed up to safely text, talk on the cell phone, or read. Self-driving technology could reduce costs in transportation, as 3.8 million people work as motor vehicle operators. Trucking has provided America millions of good jobs, but companies have been struggling to recruit younger drivers. Technology might avert a truck driver shortage and lower the price of many goods for consumers. The legal burdens the taxi industry has placed on ridesharing companies Uber and Lyft, however, illustrate why regulation might deny us the benefits of drones and self-driving vehicles. Cities have used regulation to protect existing taxi monopolies. Just recently, Austin, Texas, voted for regulations ending ride sharing service there. The NHTSA’s Dr. Rosekind may sincerely want to allow self-driving cars to develop. But numerous businesses threatened by self-driving vehicles (or drones) could seek to throttle the competition. If politicians side with the established interests, even the best intentioned regulators will not prevent regulation from being used to protect the past from the future. ••• Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s alone and do not necessarily reflect the views of Troy University.
Uber to return to Auburn
The City of Auburn has given Uber the green light to return to the city — just in time for football season. Tuesday night the Auburn City Council approved an ordinance to amend the city’s vehicle-for-hire rules for ridesharing services Uber and Lyft. “Tonight, the city council created a permanent home for Uber in Auburn, and we look forward to bringing safe, affordable transportation options and flexible work opportunities to the community,” said Uber spokeswoman Evangeline George after Tuesday night’s decision. “Access to a reliable ride at the push of a button will help empower students, residents and visitors alike to make safe choices at the end of a night out.” Officials say the ordinance adds a section to the vehicles-for-hire code, which sets separate regulations for companies that use an internet application to connect passengers and drivers, stating that background checks are required, but may be performed by the company itself. Opelika-Auburn News reports that city documents reveal “Uber has reviewed this ordinance and our contact has expressed that they are agreeable to this language.” Uber previously operated in Auburn from August 2014 to January 2015, but was forced to leave after the city council passed an ordinance requiring ridesharing companies to have the same level of insurance coverage as taxi companies, as well as to display a city-issued driver’s business license. Uber could return to the Auburn streets as early as next month.
Insurers laud passage of state ridesharing insurance bill
One of the nation’s largest insurance interests took a moment Thursday to applaud Montgomery lawmakers for their work on so-called “ridesharing.” The state Legislature passed a bill this week that Property Casualty Insurers Association of America state government manager says will “close the insurance gap” for customers when they use popular ride-hailing apps like Uber and Lyft. The legislation, SB 262 sponsored by Sen. Shay Shelnutt and Rep. David Faulkner, would require such services — called Transportation Network Companies or TNCs under state law — to insure their drivers when they are engaged in ridesharing, whether they have a passenger at the time or not. “Over the past several months, transportation network companies (TNCs) such as Uber have experienced tremendous growth in Alabama as they operate in several cities across the state including Birmingham, Mobile and Montgomery,” said PCCI’s Logan McFaddin. “However, SB 262 was needed to strike the right balance in protecting the public, closing the insurance coverage gaps and allowing for an increase in entrepreneurial activity. This bill ensures that the TNC driver who picks you up and drives you across town is properly insured, so that you and the public are not at risk if an accident were to occur.” “PCI commends Senator Shelnutt and Representative Faulkner for their great work and attention to this issue. SB 262 requires rideshare drivers to have the necessary insurance coverage from the time they log in to the app to the time they log out, which is a critical component to effectively protecting consumers and drivers,” concluded McFaddin. The bill provides insurance on each TNC driver’s call for up to $1 million for death, bodily injury, and property damage. Should Gov. Robert Bentley sign the bill which now awaits his signature, the bill will go into effect on the first day of the third month following its approval.
Uber to launch in Huntsville Friday
Uber, the ride-hailing service based out of San Fransisco, is set to launch operations in Huntsville Friday at 4 p.m. Not only will the service be a boon for roving residents, there are already more than 20 jobs listed on www.simplyhired.com. The company received its business license in the city Thursday and, though a few last minute issues may stall the launch, it is set to begin zipping through town just as workers are heading home for the weekend. The Huntsville City Council approved a business license last week for Uber affiliate Raiser and last month passed two ordinances to allow Uber and similar services to operate in the city. “We were very excited to bring Uber here,” said Kelly Schrimsher, communications director for the city of Huntsville. “Uber has become quite the standard for people coming into town.” Schrimsher noted that Huntsville is an “international city,” which hosts scores of out-of-towners needing to get around. While she noted that it’s “too early to tell” what kind of effect the company will have on jobs or revenue, Schrimsher said it’s an excellent opportunity for people looking to make some extra money. Schrimsher commented that the city had worked with local taxi companies concerned about Uber’s presence in the city and added that there is nothing stopping local cab companies from offering similar services to consumers in the area. “It’s about consumer choice,” Schrimsher said. “And we don’t believe the government needs to get in the way of consumer choice.” Uber has come under scrutiny of late for its business model of employing private contractors to operate its pastiche tax service, which fails to provide health insurance or other benefits. Further, consumers have complained that rates may fluctuate enormously for seemingly short car rides. Despite that, the company has garnered wild success in cities across the country and may fair well in Alabama’s metropolitan areas, which generally lack adequate taxi services. Uber launched in Birmingham two months ago and in Montgomery January. “We’re looking forward to having the service here,” Schrimsher said, adding that the city encourages similar operations, like Lyft, to follow suit. New to Uber? Sign up and your first ride is on them (up to $15).
Daniel Sutter: Unintended consequences of Uber
The disruption of established taxi markets by ridesharing services like Uber and Lyft is bringing financial ruin to some in the industry. The consequences raise complicated economic, political and ethical questions. Uber and Lyft are ridesharing services. People sign up to drive using their own cars and drive on their own schedules. Riders use an app to request a pickup. The companies facilitate sharing by generating a minimum threshold of initial trust. We teach children not to accept rides from strangers; Uber helps customers trust the stranger giving them a ride. Governments have regulated taxis for decades, requiring taxis to possess a medallion to operate legally. Limits on the number of taxis increase fares compared to unregulated competition, making customers pay extra for rides. But cab drivers do not typically benefit from the system. Why not? Regulation makes each fare somewhat higher than otherwise; let’s say that this totals an extra $20 over a typical shift. But the cabbie will not get to keep the $20 – the taxi company monitors rides and fares. The extra revenue collected day after day goes to the medallion owner, not the cab driver. Obtaining a medallion would seemingly allow the driver, not his employer, to keep the extra revenue. Taxi medallions can be bought and sold, and generally purchase is the only option, since cites rarely issue new medallions. But as Lee Corso says on ESPN’s “College Game Day,” “Not so fast!” Owners looking to sell a medallion know that the buyer will get to charge higher fares, and will accordingly charge more for the medallion. This process, known as rent capitalization, constitutes one of the more confusing results of economics. The price of medallions illustrates the extent to which cities restrict the number of taxis. The medallion, after all, is just a bureaucratic permission slip and doesn’t help transport riders. In New York, the price of medallions reached $1.2 million. Taxi regulation costs consumers enormously, and yet in a very real sense does not benefit the vast majority of cab drivers and companies. Most medallion owners today entered the business by purchasing medallions, and so profits from operating cabs merely pay back the cost of getting into the business. Economist Gordon Tullock called such a situation the Transitional Gains Trap. Ridesharing has driven fares down to the level that would have prevailed without regulation. The price of taxi medallions has fallen dramatically, by more than 25% in many cities. The city of Philadelphia recently sold some new permits for $80,000; they had hoped to sell them for nearly $500,000. Current medallion owners may not benefit much from regulation, but they certainly bear the losses from its disruption. Not surprisingly, taxi companies have battling tooth-and-nail, seeking regulations to hamstring ridesharing and suing the companies. This political opposition may, at least in some markets, limit realization of the potential gains from ridesharing. The situation also raises an ethical question. Is it fair for the current owners of taxi medallions to bear this loss? Many were hard-working cab drivers who saved and borrowed to buy a medallion, and now face financial ruin. They made business and life decisions based on expectations created by government policy over decades. Should cities make good the promise of regulation reflected in medallion purchase prices? On the other hand, taxi regulation represents an improper use of government’s regulatory power. Regulation was (and still is) defended as protecting consumers from unscrupulous or even criminal behavior on the part of taxi drivers. Government is not supposed to simply enrich one group of citizens (sellers) at the expense of another (customers). Haven’t taxi riders suffered enough? We make decisions based on the economic world around us today, and the world we expect to prevail tomorrow. Even costly and ineffective government programs shape our expectations and decisions. Consequently, ending wasteful government programs costs more than imagined. Gordon Tullock concluded that avoiding such messes altogether was the only good solution to the Transitional Gains Trap. Hopefully the difficult straits of many in the taxi industry today will encourage us say no to new ill-advised regulations governments propose this year. • • • Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision.
Montgomery city officials give green light to Uber, approves ride sharing ordinance
Montgomery City Council has voted to allow ride hailing companies such as Uber to begin operating within the city. Multiple media outlets report that city council approved the ordinance during a Tuesday night meeting. Ride-hailing services such as Uber and Lyft let people use smartphone apps to book and pay for rides. Montgomery Mayor Todd Strange told local media he expects the decision to attract young people and businesses to the city. Uber’s public policy manager for the Southeast Trevor Theunissen told local media that prospective drivers have already signed up to work in Montgomery. Council President Charles Jinright told the Montgomery Advertiser that Uber must now get a city business license and adopt a vehicle inspection plan. Jinright says Uber could be operating within two weeks. Republished with permission of the Associated Press.
Birmingham City Council gives Uber the green light
After a months-long push to allow Magic City residents to hail rides from the popular ridesharing app Uber, Birmingham City Council voted to approve an ordinance that would do just that on Tuesday. Representatives from the firm lauded the move popular service, along with competitors like Lyft, to open up shop in Alabama’s largest city within weeks. “Today’s action by the City Council is a win for riders, drivers and the city of Birmingham. We thank Council President Austin for his leadership, and look forward to bringing safe rides and economic opportunity to the Magic City in the coming weeks,” said Tom Maguire, General Manager for Uber’s operations in Alabama. Under the just-passed ordinance approved by a vote of 7-1, Maguire said he hopes Uber can begin offering rides as soon as the end of 2015. The ordinance – which Uber urged users to support via an in-app appeal – came with a last-minute amendment offered during the meeting. The amendment created a six-month provisional window during which the city will evaluate the status of safety, taxation, and other municipal concerns. City Councilors Valerie Abbott voted no, while Councilor Kim Rafferty abstained. Council President Johnathan Austin came out in support of the bill, after missing a meeting last month that had to shut down for lack of a quorum. Austin blamed the poor turnout by members on the the meeting’s proximity to the Thanksgiving holiday. Councilors Lashunda Scales, Valerie Abbott, William Parker, Sheila Tyson, Jay Roberson, Steven Hoyt, and Marcus Lundy also voted in the affirmative. The move came after about an hour and a half of debate, including some questions about city legal staff about how Uber’s vetting process for drivers. The amendment creating the six-month review period quelled those and other questions nay-sayers presented Tuesday. The ordinance doesn’t go into effect immediately, however. Birmingham Mayor William Bell – who had signaled his support for ridesharing in the past – must sign it in order for it to take force. Ride-hailing firms must then apply for and receive licenses for prospective drivers. The smaller municipalities of Homewood and Mountain Brook also recently passed ordinances to allow Uber et al. to operate within those city limits, making Birmingham the third city in the Yellowhammer State to open its roads to the services, though provisionally, at least for now.
