July 15 2014
Patrice J. Lee
When technology and regulations meet, friction often emerges. In major cities like San Francisco, New York, Miami, and Washington, D.C., governments are fighting innovation driven by technology that disrupts the current regulated ways of doing business. There’s a big opportunity for government to push cronyism aside and allow market innovations to improve the lives of its citizens and to make its crime efforts easier.
Uber and Lyft have had a rough time across the country lately. Cities have banned private drivers that use their rideshare applications to offer car rides to other members for a fee. As we reported, Virginia sent them both a cease and desist letter telling drivers to stop operating, but after huge public backlash, reversed its order within the past two weeks. That’s a win for innovation. In other cities, the results haven’t been so successful.
A new study may provide ammunition for these rideshare application though. Taxicabs have always billed themselves as a tool against drunk driving – and they are. Uber and Lyft may take the public safety benefit even farther in curbing robberies.
These rideshare apps offer cashless transactions, allowing people to pay for their service through debit/credit cards that are uploaded online to their accounts. That removes the element of individuals needing to collect and carry cash. There is no shortage of heart-breaking stories of taxicab drivers who were robbed and even killed. For an Uber and Lyft driver, that element is removed.
The Washington Post reports:
With a certain logic, quasi-taxi-like services such as Uber and Lyft provide a public health benefit to cities. They give the bar-hopping demographic a better way to get home at night, and, as a result, they may help cut down on DUIs.
...To test this theory, Nate Good, the curious CTO of an event ticketing company in Pittsburgh, recently pulled DUI data in the Philadelphia metropolitan region (hat tip to PlanPhilly for noticing). Below are his results, separating monthly DUI arrests by people over and under 30 years old:
At right, you'll notice that he marks the launch of several smartphone services in the Philadelphia region, which appear to coincide with declining DUIs. Good himself is the first to admit that correlation does not necessarily imply causation here. This data doesn't tell us, for instance, about what was happening in late 2007 that led to an earlier spike in DUIs (as the economy sours, more people drink?).
If these services, which run on credit cards, take cash out of transactions as well, they may also cut down on other kinds of crime like theft (this is an argument Uber has made in Chicago). Estrada was also simply talking about the idea that crime might decline because Lyft likes to think that it creates community — and jobs in communities that don't have enough of them. That last argument merits a lot more skepticism. DUIs, though, we might actually wrap our arms around.
The numbers are early and there may be correlation though not necessarily causation. However, there is growing compelling reason for local governments to embrace technology.
What drives lawmakers to cling to current laws is often cronyism, where other interests such as taxicab groups lobby to secure protections for themselves. We’ve seen protests by cabs that snarl traffic – not the way to way sympathy.
There's an opportunity for more research and more consideration on the local and state level for how disruptive technology should be embraced.
Perhaps it's me but it seems that government is slow to embrace market-based organic innovation and quick to welcome top-down, expert-driven mandates and regulation. One often leads to public policy that harms more than it helps -a hint: it's not innovation.