Uber, Other E-Hailing Services, Learn that Regulation = Shakedown

How can we regulate your app intelligently if you don't give us expensive devices on which to run them?


Crain's New York Business finds an amusing/infuriating detail in some proposed New York regulation on Uber and other e-hailing smartphone ride-summoning apps:

On page 33 of the 42-page document, the TLC [New York Taxi and Limosine Commission] says, "Upon request of the Commission, an FHV [for-hire vehicle] Dispatch Application Provider must provide at no charge a fully operable device on which the Commission can access the FHV Dispatch Application, and access to the FHV Dispatch Application with requisite Base, Driver, and Passenger test IDs." The penalty for noncompliance is a $500 fine and suspension.

To Uber, this means it will have to buy the TLC iPhones, Android devices or Apple Watches…

Other rules would require Uber and its competitors, such as Lyft and Via, to get TLC approval for its smartphone app updates before offering them to customers. Uber would also be effectively prevented from dispatching cars to LaGuardia Airport because the airport lacks a for-hire vehicle lot. And the TLC would require Uber to direct customer complaints through 311 and the TLC, rather than through Uber itself, which, the company complains, would increase the time it takes to resolve a complaint.

Stands to reason, right? How can we picayunely regulate you if we don't have the best possible device on which to run your app? And remember, we hold the power of life and death over your success in a major metropolis.

The notion that a city bureaucracy could possibly do a better job for customers than the app company's themselves in terms of useful updates and changes and dealing with complaints will seem silly on its face to anyone who has dealt with both taxis and e-hailing services.

The full TLC document embedded at the Crain's link.

For background, see my feature from last November on the slow fight for political acceptance by these e-hailing services. (Market acceptance has barely been a problem.) The city to city fight for this wonderfully helpful innovation will be, as this shows, unnecessarily long and hard and harm so many citizens and potential e-hail drivers along the way. And, enjoying their fancy new devices if they pull this off, municipal regulators won't care at all.

Hat tip: Ken Constantino

NEXT: So Why Exactly Does Baltimore Own a Money-Losing Hilton?

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. How is this different from a mob shakedown again?

    1. Competition between mobs leads to at least some restraint?

    2. The mob doesn’t pretend it’s doing it for public safety.

      Also, the mob doesn’t get to simultaneously soak taxpayers while extorting money from businesses.

      In fact, the mob might be preferable to government.

      1. Plus if I shoot a mobster in the face my neighbors may not rat me out. Shoot a blue hero and people’s dicks will be hard while droppin’ a dime on ya ass!

  2. They are attempting to turn Uber into a conventional cab company.

    Uber is successful because they are not a conventional cab company.

    Lets get government involved in every business or industry that has flourished precisely because government was not involved. (FCC and the internet)


    1. See, government *can* create jobs.

  3. Coming to American city near you: Black markets, gray markets, and tax evasion!

    Progressives want to be more like Europe, and progressives will get exactly what they want.

  4. There’s a bill currently working its way through the Texas Legislature that basically overrules all the retarded local regulations. It still has regulations but form what I’ve read they’re significantly less onerous than any local regs that have passed so far.

  5. This is similar to local government telling telecom/cable companies that they have to provide computers to the local library in exchange for right-of-way access to put down line. I remember when Verizon first started rolling out FiOS we compiled a list of the “worst of” and one town refused permits until Verizon agreed to pay for new traffic lights throughout.

    1. It seems worse than that even. At least library computers and traffic lights have some value to the community. How does the typical New Yorker benefit when the taxi commission employees all get shiny new iPhones?

      1. Yeah, this is worse. But the fact that a government can engage in this kind of extortion at all is maddening. And it’s not like it’s in lieu of taxes and franchise fees, etc. This is literally, “oh, you want to provide a valuable commercial service to our constituency? This is the vig, bitches.”

    2. Yep, seems like standard practice. I help out a relative who’s a commercial real estate investor and landlord with electronic documents and editing and proofreading contracts, and I constantly hear about these kinds of shakedowns negotiations. Everything requires a permit and to obtain the permits to develop or make changes, the city will often use that opportunity to get some city renovations from you, like signal lights, road development, landscaping, etc.

  6. Breaking News: Ralph Nader wants more regulation for Uber and AirBnB


    “It’s the same questions we’d all ask: Are they regulated for safety? Are they licensed for being expert drivers? Is the car inspected?”

    “It’s unfair if they are not properly regulated, certified to safeguard the passenger. It’s unfair to the cab industry.”

    Taxi drivers are experts? Has this fool ever been in a taxi?

    Poor Ralph. Still mad that he never got to eat the cake frosting.

    1. unfair to the cab industry

      I thought Ralph was supposed to be looking out for the consumers…

      Maybe it’s a new trend or maybe I just notice it more, but it amazes me how many people nowadays reflexively shit their parents over *anything* that isn’t “regulated”. I see it every time some new innovation is announced. Every. Damn. Time.

      1. Poor mom and dad.

      2. It’s unfair that my company has to compete with other companies. Unfair!

        1. It is when those companies pay nothing for a medallion. You bet that’s unfair.

          1. So your definition of “fair” is requiring you to blow your life savings on a king’s trinket which will allow you to work? I guess the government should just require medallions in every job category. It’s only fair.

            1. You don’t blow your lifes savings, you lease it and pay it off over time. You work hard for something and it’s yours. Medallions in NYC are entirely necessary.

    2. Wait, that wasn’t the fake?

    3. Ask Ralph: would you rather:

      1) Ride in a taxi where all you know about the driver is he/she has some magical government piece of paper, or

      2) Ride in a taxi that has 100s of actual user reviews proclaiming the driver to be clean, friendly and efficient?

      I’m afraid of the answer, frankly.

      1. It doesn’t matter what he’d do, plebe, it matters what he thinks *you* should do.

        1. Regardless, still afraid of his answer.

    4. Let’s encourage job creation by requiring everyone to be an expert!

  7. I’d make sure to put all sorts of spyware on any device I gave to the TLC for “testing”. Any web site you visited would be logged. Copies of voice calls would be saved.

    I’m sure after the first round of testing, I’d have enough browser history and voice messages uploaded to the cloud to ensure that the TLC never ever again questioned any action I wanted to take.

    1. That is devious and unethical and exactly what those assholes deserve for trying to run a shakedown on people and technology that is considerably smarter than they are.

  8. Uber is trying to operate in Manchester New Hampshire and one of the town councilors said all the want is

    1) Let the state police or the taxi commission do background checks, so we know they are reliable. (Because lack of personal accountability and sovereign immunity means OBVIOUSLY the government will do a better job than Uber…I mean what incentive do they have to properly vet drivers.)

    2) We already require a license to cut hair, or do home repairs etc, so what’s the harm in having Uber do the same. (We’re already extracting some vig from everyone else, what makes Uber so special.)

    Basically this douche is saying, you need my permission to operate. It makes you realize that tyranny comes in all sizes.

    1. In Alaska, Uber wouldn’t even agree to fingerprinting or requiring drivers to get a chauffeur’s license. Their background checks don’t include the FBI database and are basically a joke. Drug testing? Nah. Yearly car inspections? Nah. And of course, how dare anyone require ‘Uber’ drivers to carry real commercial insurance like taxis are required to. Most Uber drivers are using worthless personal insurance which covers basically nothing it you’re involved in an accident with injury. In fact the insurer will cancel if they find out it’s been used for commercial purposes. Uber has an umbrella policy but it’s sketchy to say the least if/when that ever kicks in. I’d go with NH’s government on this one in it’s desire to protect the riding public. Uber really doesn’t care. They can’t afford to, they need easy hiring because it’s their policy to cut rates at will and there’s huge turnover.

  9. Uber is getting the shakedown? That’s a laugh. They were handed, for free, the right to do virtual street hails in NYC. That exclusive right was sold to Medallion holders, many of whom are individuals, for a lot of money. Uber got it for free by claiming they’re not really doing street hails because when you tap an app on the street and the car is there in a few minutes, it doesn’t qualify. Spare me. Uber then has the gall to claim it’s yellow cabs who need to ‘compete’ and ‘innovate.’ While Uber skirts 99.9% of the very significant costs of operating a taxi in NYC. The entire thing is illegal, and it’s truly amazing how this company with a 40 B valuation is yet again complaining about ‘unfair’ treatment. Btw, NYC is one of the few places where Uber drivers are forced to carry real commercial insurance and get real car inspections and real background and drug testing. Let me avoid 99% of the costs of any business and compete unfairly, and I’ll ‘provide an ‘innovative’ product too.

    1. Let me avoid 99% of the government-mandated costs of any business and compete unfairly, and I’ll provide an ‘innovative’ product too.


      1. It’s mandated because pre-Hass Act the streets were flooded with cars and drivers couldn’t make a living. They were desperate it was dangerous and too much pollution. Taxis are an extension of the public transportation system and agree to charge a set fare when buying a Medallion. Uber uses a loophole to sidestep nearly all of the costs of being a taxi, there’s no denying they are a taxi because they openly state they’re competing directly with taxis. It’s illegal.

        1. It may be illegal, but that doesn’t make it wrong.

Please to post comments

Comments are closed.