Few startup innovations in the past few years have been as influential and controversial as ridesharing technologies. The emergence and explosive growth of companies like Uber, Lyft, and Sidecar signaled the rise of the sharing economy, allowing virtually anybody to put their spare time, spare car, or spare room to productive use. Not surprisingly, incumbents operating in the markets that these new startups shook up have reacted strongly to their new competitors. Taxi interests in particular have fought hard against transportation networking companies (TNCs), lobbying for restrictions on their operation, and even getting cities to ban their operation entirely.
Regulators will always have a hard time keeping pace with the development of new technologies, but we believe that the great consumer value of TNCs and other sharing economy services warrants a balanced approach between promoting competition and protecting legitimate public health and safety concerns. To better figure out which cities were doing the best and worst to foster competition and innovation in transportation markets, Engine, in partnership with R Street Institute, released a report ranking US cities on how friendly their regulatory climate is towards ridesharing.
The study shows a wide range of regulatory approaches to ridesharing, with some cities like Portland banning them outright, and some like Washington D.C. creating a specific regulatory framework for TNCs that allows them to operate in the city under rules designed for their particular concerns. With this paper, citizens can learn more about what their representatives are doing to promote healthy transportation markets in their cities and figure out what other cities are doing right or wrong to encourage innovative startup activity in the transportation sector.
Along with the paper, R Street launched an associated website that maps out the cities in the study along with their grades and provides tools for citizens to ask their representatives to enact better TNC regulations.
The recent debate about how to treat ridesharing companies is a great case study for how startups can have a quick and meaningful impact on a city’s quality of life and how regulations have a hard time keeping up with the pace of innovation. With this paper, we hope that policymakers can learn about what works and what doesn’t when it comes to regulating the sharing economy.