Policy Regulations for Uber and Taxi Industry - 2200 Words

Policy Regulations for Uber and Taxi Industry (Research Paper Sample) Content: Policy Regulations for Uber and Taxi Industry Student's Name: Institution Affiliation: Policy Regulations for Uber and Taxi Industry The rise of Uber has put the taxi industry in a severe crisis. The industry once dominated the transportation market. But now the emergence of Uber as the most successful ride-sharing firm poses a huge threat to the taxi industry. The transportation market has been the stronghold of the taxicabs, but now they are facing a possible elimination. What makes Uber more successful is the integration of the mobile app technology that enables the consumer to share information with the driver. The firm has gained a huge market share since it was started in 2009 (Kamga, Yazici, & Singhal, 2015). The state legislatures and the local governments in the United States have implemented laws to regulate Uber and the taxi industry. Issues that Uber encounters with the Taxi Industry Uber is a technology firm that offers to ride-sha re services to more than 58 countries around the world. Besides, it provides platforms where independent contractors and riders can link up with the use of an app. The firms have experienced a rapid success since it was initiated. This is because their services cost less than those of the traditional taxis. Their effective and cost efficient services have created a stiff competition for other firms with similar services. However, challenges have always emerged in the form of social and technical, legal and technical hindrances. For instance, there has been a major standoff between the traditional taxi industry and Uber (Khirkam & Lien, 2016). The biggest issues faced by Uber and the taxi industry concerns the legal action. This includes protection and safety of the customers, driver information, rider and driver security and an adequate insurance coverage (Syvret, 2016). The government needs to address this critical factors so as to prevent a standoff between the two industries. Th e enactment of effective policies will help in reducing internal struggles that Uber and the taxi industry faces. The taxi sector argues that Uber has an unfair advantage. These allegations are based on the notion that Uber is not confronted with the same licensing requirements as the taxi sector. Moreover, some indict Uber of not vetting their drivers which lead to potentially unsafe situations for the customers. In fact, some major cities have outlawed the ride-sharing services such as Uber due to different concerns (Schneider, 2015). The firms have also been faced with various litigations including one filed by its independent contractors. The conflicts between the two sectors have forced the government to come up with news policies to regulate them. Uber has been highly commended for enabling the independent contractor to earn more money with their cars. Besides, the consumers are offered convenient means of getting around at an affordable cost. It is evident that the ride-share services have outshined the traditional taxi industry (Sun & Edara, 2015). As a result, the taxi sector has always strived to keep up with the new competition. The surge pricing technique has been severely criticized for imposing higher fares during peak hours. Government reaction and regulation of the taxi industry Taxis and hire cars are among the most regulated industries in the United States. The government implemented entry restrictions to this industry. There are some primary requirements that a firm must meet so as to operate the taxi and car hire services. These regulations are meant to limit competition. Therefore, all the states are required to review their rules. These restrictions are justified on the need to enhance safety. The regulatory restrictions have significantly reduced competition for the taxi operators (Kamga, Yazici, & Singhal, 2015). Besides, it has enabled them to come up with incentives for innovation and exploration of new means of cutting costs and offe ring better services for customer satisfaction. The government has achieved the regulation means through certification schemes for these industries. The presence of Uber in the market has forced the legislators to draft new policies to govern this ride sharing system. These policies is always an obstacle to the expansion of a company because of the resource that must spend so as to submit with the regulatory requirements. On the other hand, the taxicab industry is regulated by different policies (Rauch & Schleicher, 2013). Therefore, the expansion opportunities have significantly been limited by the government regulations. Regulation has been a major challenge for Uber and the Taxi industry. These firms have been subjected to more legitimate and regulatory requirements same as other businesses. Taxi Lobbies have continuously pressurized their governments to ban Uber in various cities (Schneider, 2015). They assert that Uber has completely disabled their business. Besides, their dri vers are no subjected to similar restrictions as the licensed taxi drivers (Schneider, 2015). As a result, the government has been forced to implement effective policies that will help in ensuring that the firms are provided with an equal platform to conduct their businesses. In fact, some cities have completely blocked the expansion of Uber businesses. The regulations enacted by the government aims at ensuring that the firms adhere to proper safety standards in transportation. Another policy enacted is the safe ride checklist which requires customers to confirm the license plate number. Besides, it provides for verification of the driver's name and appearance before boarding the vehicle. The regulations require that the firms should have a team of safety experts to vet the drivers. This policy is aimed at ensuring that the customers are provided with safe rides (Schneider, 2015). It is a required that all the vehicles that carry out the taxi services be properly insured. The insur ance cover is mandatory for the driver and riders safety. Despite Uber being successful in some countries, various countries have regulatory hindrances that have curtailed the successful operation of Uber services. The biggest obstacle is a failure to issue out licenses for Uber services. However, the taxi industry in these countries are fully protected and are quickly issued out with licenses. This law mandates that the driver should have healthcare insurance. Besides, there should be training programs to enhance driving skills, decrease liability for insurance costs and minimize risks from negligent drivers (Yang, Wong, & Wong, 2002). As a result, the law ensured that these firms operate in safe situations. Uber and the taxi industry are now regulated by similar policies of taxi safety and quality-related regulations. These laws are aimed at enhancing consumer safety, driver safety and service quality. The consumer safety policy comprises driver's training requirements, roadworth iness tests, and maximum vehicle ages. The driver safety entails the provision of in-cab cameras and protective screens. While improving the quality of service include driver's background check (Sun & Edara, 2015). Besides, the vehicles are supposed to meet a specified minimum safety level set by the government. Government regulation policies The role of regulation is to specify the minimum safety standards required for the taxis. This is because the passengers have limited ability to evaluate the mechanical conditions of the taxis. The government has come up with well-targeted safety regulations that are backed up by an appropriate framework of enforcement and sanctions (Syvret, 2016). This system applies to all the ride-sharing companies and the private car owners. The Uber are also subjected to the regulations that require vehicles to be roadworthy. However, the fare regulation does not apply to both Uber and taxi industry. This has led to a stiff price competition. Most cabs se em to charge a maximum allowable fare. Uber has a standard fare that is set depending on the distance traveled (Syvret, 2016). The use of mobile app technology enables the company to establish the prices for their services. The policies on hire cars have an entry restriction that is based on the total number of cars. Uber services are more of car hire than the taxi. Therefore, their argument is that they cannot be subjected to the same policies that govern the taxicab industry. Another policy is compensation which entails cash transfers to the losers. Some taxi companies have event taken the approach of lobbying. This is a legislative plan aimed to urge the legislatures to enact laws that would subject Uber and other ride-sharing companies to the same regulations governing the taxi industry (Syvret, 2016). The main reason why the government regulates transportation service sector is to enhance public safety. The standard taxi policies are considered as anticompetitive. However, gov ernment impose licensing fees and requires an additional permit for picking up airport passengers. The regulations protect the passengers in different ways. First, the passengers are sure on the fare that they will pay. This is because all fares are indicated on the taxi cab meter. The conditions of the vehicle must pass the physical inspection carried out on an annual basis. The regulatory framework that was set by the government varied depending on the location. However, many cities share similar regulations. Most of these cities use the medallion system to regulate the taxi industry. This system requires that a cab driver should lease a medallion to operate. Apparently, many cities have limited the supply of the medallions so as to regulate the industry further. For instance, New York City has about 13,437 taxis in operations with licensed medallions (Kamga, Yazici, & Singhal, 2015). Other policies include criminal background checks and fare structures. Before, the rise of Uber , the Taxi industry was willing to adhere to ...