Weekly Brief: New York Slams Brakes on Lyft and Uber

TU-Editor

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13th August 2018

New ride-hailing regulation in New York could signal pushback against the ride-hailing industry across the US but it won’t last long, Andrew Tolve reports.

The gig economy is great for flexibility. If you drive for, say, Uber or Lyft, you can work whenever you want, however much you want, without having to report to anyone other than yourself. On the flip side, the pay is poor – Uber drivers make less than minimum wage – and city streets get inundated with cars, which leads to more congestion and pollution. For some, enough is enough and New York City has passed new legislation requiring Uber and Lyft to establish a minimum pay rate for all of its drivers. In addition, the city slapped a year-long halt on all new hires for Uber and Lyft, effectively freezing growth in the NYC market for both companies in 2019.

Both companies responded as you would expect them to, arguing that the new ride-hailing  regulation is an over-reaction and will lead to more passengers who are stranded, waiting longer and paying more for rides. Uber launched a social media campaign called #Don’tStrandNYC. This is a first for a major US city and don’t be surprised if others follow suit. Mandating minimum pay for drivers is sensible, not to mention humane, and trying to curb congestion while protecting traditional cabbies is noble, if futile.

Then again, what appears to be a brewing stand-off between the ride-hailing industry and cities around the world is really a short-term problem. In the near future, fleets of robo-taxis will be replacing human drivers and those taxis will be working in coordination with cities, not in competition against them. Picture electric vehicles that don’t pollute, that respect the law, that are super-efficient, and thus less in number, and work in partnership with public transportation to make first- and last-mile connections a breeze.

This isn’t some far-off fantasy. A couple of weeks ago Waymo revealed that it’s starting to offer driverless rides to and from public transportation in Phoenix through its Early Rider program. Later this year it will launch a fully commercialized robo-taxi service in Phoenix with no safety drivers behind the wheel, with other cities soon to follow. Cities love the sounds of this, even if they’re concerned about driver pay rates and congestion in the meantime.

Also in the news this week we saw Elon Musk boldly declare in a tweet that he’s thinking about taking Tesla private; it’s a long shot but my colleague Stephen Lawson broke down why it wouldn’t change much even if it happened. Also we saw new research from the Insurance Institute for Highway Safety (IIHS) that raises serious concerns about the safety of the current breed of Adaptive Cruise Control systems on the market. The research looked at ACC systems from Volvo, BMW, Mercedes, and Tesla. As our Greg Hyde reported, the results weren’t pretty.

It’s a reminder that at the end of the day, fully autonomous vehicles operating in a world with other fully autonomous vehicles shouldn’t scare you. The fact is they’re more reliable than human drivers who are distracted, irascible and prone to crude gestures and ego-driven antics. No, what should scare you – and the rest of us – is a world where human drivers become even worse drivers than they already are because they think they have autonomy working for them, when in fact the self-driving tech in their cars is unreliable, “irksome” and even “dangerous,” as the IIHS reported.