Updated September 1 at 7:01pm

Ride-share field has new player

By Patrick Anderson
PBN Staff Writer

The Rhode Island taxi and car service markets were already in upheaval when pink mustaches began appearing on the grills of sedans weaving through Providence, signaling another new competitor for local transportation dollars.

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TRANSPORTATION

Ride-share field has new player

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The Rhode Island taxi and car service markets were already in upheaval when pink mustaches began appearing on the grills of sedans weaving through Providence, signaling another new competitor for local transportation dollars.

The mustachioed cars were utilizing Lyft, the latest ride-sharing service to launch in Providence in the past year with a mobile app linking passengers with drivers for hire.

Lyft’s arrival comes as state regulators, like many governments across the country, wrestle with how taxis, livery companies and Internet vehicle services should be regulated in an evolving marketplace.

At the end of this month, the R.I. Division of Public Utilities and Motor Carriers is scheduled to re-examine its most controversial recent car-service rule, a $40 minimum charge for all hired rides in commercial vehicles other than registered taxis.

Authorized by state lawmakers in 2012, the $40 minimum was designed to protect taxis – which are required to use meters, accept cash and operate around the clock and follow numerous other rules – from lightly regulated car services and “gypsy cabs” stealing fares.

As it happens, the $40 minimum would also undercut the Providence operation of ride-sharing service Uber, which launched in the city last summer unaware, according to the company, that per-ride charge was in the works.

After regulators approved the $40 rule last summer, four traditional (non-Internet) car-service companies challenged the new minimum in court, prompting the Division of Public Utilities to postpone enforcing it and now reconsider it.

Although it wasn’t a party in the original lawsuit, Uber is listed as a petitioner in the Division of Public Utilities hearing on the rule, which the company said would force it to leave the state if enforced.

The central question behind the $40 minimum ride is whether traditional taxi service is a public utility that needs to be closely regulated and protected from unregulated competitors.

It’s a question puzzling governments locally and globally that gets more complicated with each new startup bringing its own software platform and business model into the mix.

Lyft, for example, claims that even if the $40 minimum charge in Rhode Island is upheld, it won’t apply to the rides it facilitates, because the drivers involved are not professionals and the transaction informal, almost like car-pooling. The informal nature of the transactions are emphasized by Lyft passengers often riding in the front seat and, of course, the pink mustaches.

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