This article originally appeared on watchdog.org.
DALLAS — Uber and Lyft, responding to myths spread by their detractors, are promoting their services as a safer transportation alternative for consumers.
Speaking on a panel Wednesday at the American Legislative Exchange Council’s annual meeting, policy experts from the two ride-sharing companies aimed to dispel confusion about how their services function.
Their message was clear: Uber and Lyft are fundamentally different from taxicab services — they do not accept street hails, for example — and not only should operate under new and different rules but their business models could inspire innovation in the taxicab industry.
Perhaps the more important quality the two companies hoped to convey to members in attendance is that their networks are built on trust between the companies, the drivers and the customers.
Paramount to that trust, they emphasized, was one thing about all: safety.
“People who are removing these products are potentially putting the public in harm’s way,” David Mack, director of public affairs for Lyft Inc., told audience members.
“A lot of taxi drivers fail our background checks who are cleared in other cities,” said Justin Kintz, head of public policy in the Americas for Uber Technologies Inc.
“The drivers, they have to pass a background check performed by the city or the county or some regulatory authority, and then they often will try to apply to get on the UberX platform and they fail because our background check is more stringent,” said Kintz.
Mack and Kintz were joined on the panel by Stephen Moore, chief economist for The Heritage Foundation, and Colorado State Rep. Polly Lawrence, R-Littleton.
State and local bureaucrats’ responses across the country have largely been mixed.
While cities such as Baton Rouge and St. Paul were more welcoming to ride-sharing services, cities such Washington, D.C. and Pittsburgh, along with Virginia, cracked down on the companies to protect entrenched business interests.
But consumers — not only fond of the ease of the companies’ smartphone apps, but also the trust engendered by driver and rider rating systems — have aggressively supported the companies in the face of bureaucratic protectionism.
“But in the marketplace of choice, consumers decide what’s good,” said Kintz, echoing a similar sentiment as Mack, “and so, we just want consumers to be able to have that choice, and if that means that means loosening the regulations for the taxi drivers and loosening them for our industry, great. If that means creating a set of regs that’s different classes, fine — whatever it is that benefits consumers the most, that’s something that we can support.”
The companies provide the drivers with the technology to network with customers looking for a ride — Uber even provides its drivers with heat maps based on predictive analytics and alerts them to where periods of high rider demand will be.
Drivers work as independent contractors with the companies, whom they pay a commission for finding customers through the network, and they set their own hours.
Taxi drivers, whose industry was birthed during the Great Depression, pay the owner of the taxicab company a fee, as well as insurance, that they must recoup through fares before they are even in a position to make money for themselves.
Ride-sharing companies bear the risk while the driver is working under a recently passed Colorado law, for example, that the services obtain operating permits — not the drivers.
Safety standards are also higher. Not only are drivers subject to background checks and annual vehicle inspections, but the driver or the company must also have liability insurance that kicks in once the driver’s app is activated.
In Colorado, the ride-sharing service — officially called transportation network companies — or the driver is required to have $1 million liability coverage for rides reserved through the app, which is twice the coverage required for taxis.
“We’ve just started,” said Mack, laying out a vision of enabling private citizens to safely transact directly with one another.
“Everyone should be able to do it as soon as they can pass the safety barriers, ” he said.
Contact Josh Peterson at firstname.lastname@example.org. Follow Josh on Twitter at @jdpeterson.