The city of Portland is under pressure to give its stamp of approval to mobile ride-hailing companies such as Uber, Lyft and Sidecar.

Despite a growing list of followers and advocates for these services, we see little reason for Portland to be in a rush to accommodate a new business model. Yes, Uber and similar businesses offer a different and potentially cheaper way to catch a ride. But sometimes the lowest price gets you just that — the lowest price — without full regard for regulations, economic contributions or, in this case, the taxi drivers who’ll be financially squeezed.

The debate about Uber-like services comes on the heels of the city’s decision to allow AirBnB rentals, as long as the host purchases a $180 city permit and submits to safety inspections by the Bureau of Development Services. For many people, the use of technology in the interest of disrupting the standard business model and lowering the cost to the consumer sounds like a good idea. There are, however, other factors to consider.

For example, when it comes to regulation of services, Uber drivers have personal insurance, but no commercial insurance. Their vehicles are inspected once when the driver signs up, but there’s no guarantee of further inspections.

As Dylan Rivera, spokesman for the Portland Bureau of Transportation notes, the same standards that apply to the regulated taxi industry also must apply to so-called ride-sharing services. “Everyone needs to play by the same rules.”

To its credit, Uber has the potential to reach into areas that are unprofitable for traditional cab companies to serve, and the question of driver compensation is difficult to pin down. One Vancouver Uber driver who spoke to the Portland Tribune said he’s averaging $1,000 per week. The typical cab driver in Portland makes $33,669 a year. However, the Vancouver driver was one of the first in that city. Plus, many Uber drivers provide rides as a part-time gig. So, like anyone else, their salaries are dependent on how many hours they are willing to work.

Another consideration is the overall benefit to the local economy. Uber and AirBnB charge a fee for each transaction they manage. That money presumably leaves the local economy. The question then becomes whether these businesses give back to the communities in which they operate.

A related question is: What do you lose when you disrupt one type of business in favor of another?

Radio Cab in Portland has proudly managed the Radio Cab Turkey Project since 1997. Each year, Radio Cab Co. drivers deliver hundreds of turkeys to families in need.

We have no reason to believe Uber isn’t similarly charity-minded. The company, with a market valuation of $17 billion, has a partnership with the American Red Cross to help with disaster relief. But its primary mission in life — as a new, disruptive company — is to enter as many cities as it can in coming months.

As technology — in this case a simple smartphone app — alters people’s behavior, economic models will undoubtedly change. Uber eventually will end up in Portland. Its smartphone technology already has been adopted by taxi companies nationwide, so its presence is forcing the competition to change.

However, a very real pitfall of the emerging “sharing economy” is its relentless downward pressure on prices and therefore wages.

Some of the resistance to Uber is due to a sense of fairness — the need for a level regulatory playing field. Yet, there also is uneasiness about the idea that a job we are all familiar with — the durable taxi driver —

appears threatened by a low-cost competitor.

Is it truly in the best interest of a community to trade regular jobs for what often amounts to casual labor? It’s a question that will be asked multiple times as hotels, for example, feel the pressure from AirBnB-style home rentals and taxi companies respond to the Ubers of the world.

Most every sector of the economy is vulnerable to such disruptions — which is why the city is right to consider all the issues before it opens the door to ride services that act like taxis, but go by a different name.

Contract Publishing

Go to top
Template by JoomlaShine