Wednesday, December 03, 2014
PAST FIGHTS FUTURE AT MONTGOMERY COUNTY COUNCIL HEARING ON UBER, LYFT, TAXIS
Council Expedited Bill 54-14 would, plain and simple, make it more costly for ridesharing services like Uber and Lyft to operate in Montgomery County. If passed, it would absolutely, positively raise fares for users of Uber and Lyft. And the bill sends a terrible message to the region and the nation that Montgomery County is closed for business.
Beyond punishing ridesharing services, subsidies were on the table for Uber and Lyft's competition, the local cab companies. Specifically, Expedited Bill 55-14 would require the county's Department of Transportation to create a "centralized, electronic taxicab dispatch system" - at taxpayer expense. Likewise, Expedited Bill 53-14 would reduce the cost of operations for Barwood and other cab companies, while 54-14 raises the cost for Uber and Lyft. Sound fair to you?
Considering that's there is no mass public outcry to put more regulations on Uber and Lyft, where is the urgency for ham-handed government intervention coming from? If you haven't already figured it out, Barwood is well-connected politically in the county. Uber and Lyft entered a stagnant transportation market, did well, and now its taxi competitors are crying foul. Using political connections and hiring at least one PR firm, they have attempted to create a fake Astroturf campaign against ridesharing companies. Which Bill 54-14 incorrectly lumps in with taxicabs.
Uber and Lyft are not taxicabs. While they operate legally in the transportation market, and indeed have some advantages over taxicabs, they cannot - for example - troll the streets, hotels and shopping centers of Montgomery County, in hopes of being hailed by a prospective passenger. That's an advantage taxis have over ridesharing.
While some on the Council are hoping to preserve the status quo of the old taxi monopolies their constituents have been complaining about for decades, the rest of the world has shifted beneath them. I attend a fair number of grand openings and events around Bethesda and the county, and I can't recall anyone arriving by taxi for the red carpet.
Young people, in particular, are arriving by Uber. One topic receiving a lot of press in the last year has been the question of how to attract more millennials to live and work in Montgomery County. The County Council has been one of the prime talkers on this issue. Their record doesn't back up their talk. Affordable housing is being torn down, no major corporation with high-wage jobs has been attracted to the county in over a decade, and the county even managed to run 90% of food trucks out of downtown Bethesda.
Now Bill 54-14, which would raise Uber fares, and some councilmembers' threats to crack down on increasingly popular e-cigarettes, are raising the volume on a clear message to millennials - Montgomery County is not for you. Imagine millennials' reaction to the County Council making their Uber rides more expensive.
But back to business - If I'm the CEO of a tech start-up, and I know that, once my product disrupts the established powers in the market, the Council will step in and crack down on me - why would I incorporate my business in Montgomery County? And why would I offer my product or service to county residents, if the elected officials will make that product or service more expensive (and therefore less competitive) to please established companies that have a direct line - and checkbook - to the County Council?
This isn't just about Uber and Lyft. Ideally, wouldn't you like to have additional ridesharing services competing for your travel dollar in the county? Upstart competitors won't just be hurt by Bill 54-14, but may be shut out entirely from our market. Uber and Lyft are big enough to simply pass the added costs 54-14 would impose on them onto their customers; start-ups won't have the customer base and financing to do that.
More evidence of the ground shifting beneath the County Council? Major corporations like Citigroup and Gannett have made Uber the official ground transportation option for their employees, instead of taxicabs. If you're the CEO of a Fortune 500 company, and you know Montgomery County will raise the travel costs for your firm, why would you be encouraged to relocate your headquarters there, or do business there?
Not to mention that the crackdown on Uber will suggest to those corporations that Montgomery County's leaders are stuck in the past and fighting the future, hardly the message you want to send to the tech, aerospace, defense and biotech industries.
Uber and Lyft are at least as safe as taxicabs, and offer more accountability and convenience than traditional taxis do. We need more of these services, not less, and certainly not higher fares. If Barwood and other taxi services would like to switch to becoming a ridesharing service, they can do that without public financing and subsidies.
Ridesharing services are also creating jobs and providing transportation to areas of the county underserved by transit.
In emotional testimony last night, Uber driver Elgasim Fadlalla said the company "saved my life." Laid off in a recent round of Pentagon defense cuts, Fadlalla has been able to attend school while driving for Uber. As a former taxi driver, he said that would not have been financially feasible if he were driving a traditional cab. With a taxi company, "I owe them $105 for rent when I wake up in the morning." Not so with Uber.
Another Uber driver, Dario Arana, said he owns 12 restaurants in the DC area, in addition to his driving job. He drives to help people more than just for the money, he said. "Public transportation here in the county is not reliable, and we definitely need ridesharing companies" to augment that system, he testified.
Reliability is also critical for Uber user Bridget Frances, who said, "I've found Uber quicker than Metro, and more reliable than the bus. It's the most convenient thing. I don't know what I did before Uber."
Isn't it time Montgomery County stops fighting the future?