#1 State for Innovation Punishes Uber for Being…Innovative
The Maryland Public Service Commission ruled Wednesday that the ride sharing service Uber, is a “common carrier” and should be regulated as a “non-taxicab passenger-for- hire service.” The PSC order directs Uber to apply for a motor carrier permit within 60 days. The ruling affects Uber’s Uber Black and Uber SUV services, not its lower fare service UberX. However, the Office of the People’s Council has filed requests for investigation into UberX and another rides haring service Lyft.
Uber connects riders and drivers through its smartphone app.
Uber said it would appeal the PSC’s decision and stated “the people of Maryland and their elected leaders support innovation and choice, Maryland’s PSC is stuck in the days of the horse and buggy.”
According it’s statement the PSC ruled that “when viewed in their totality, the undisputed facts and circumstances in this case make it clear that Uber is engaged in the public transportation of persons for hire. Thus, Uber is a common carrier and a public service company over whom the Commission has jurisdiction.”
Uber has argued that it is a technology company not a transportation company and not subject to transportation regulations. Last month 30 taxi companies sued Uber alleging that Uber’s “surge pricing” model is tantamount to price fixing and that operating outside traditional taxicab regulations creates an “unfair market place.”
The PSC did recognize the evolving nature of the for-hire transportation industry,”we recognize that many industry changes and technological advances have occurred since these regulations were adopted, including the everyday use of the Internet.” The PSC directed its staff to draft new regulations to address the technological changes that have occurred since the original regulations were implemented.
These regulations will address, specifically, new technologies used to manage and dispatch requests for transportation-for-hire services, method(s) used to provide notice of rates to the Commission and consumers, along with matters of insurance, vehicle safety and qualifications of drivers. The new regulations will be drafted within 90 days and will include input from the parties in the case, including Uber, and other interested parties.
Governor O’Malley, who appoints the members of the PSC, released a statement stating in part, “I urge the Commission—and the Maryland General Assembly—to ensure that our laws and regulations accommodate and foster new innovations to ensure that Marylanders have choices, while always ensuring that we protect the safety of all Marylanders.”
This situation however, begs the question–in a state ranked number one the U.S. Chamber of Commerce for innovation and entrepreneurship–why is punishing a company for innovating? Why instead of ruling against the company did the PSC not act proactively to address antiquated regulations?
One reason is that politically appointed technocrats aren’t pre-disposed to understand innovation when they see it, much less embrace it.
Another answer lies in O’Malley’s corporatist governing philosophy, which cannot see any private venture operating without the imprimatur of the state. That the PSC ruled against Uber in favor of the taxicab monopoly is the same reason why politically favored industries like biotechnology, and especially renewable energy are lavished with subsidies and favorable mandates, while small business and manufacturing are disappearing from the state. It also makes for nice opportunities for O’Malley cronies to cash in–at taxpayer expense.
It’s not that Maryland merely has a bad business climate, it’s that Maryland has a government climate, which like a virulent weed, chokes out un-favored private sector industries.
Uber, which is essentially a peer-to-peer service, bypasses the traditional government regulations and creates a true market of buyers and sellers without the government middleman. That’s an equation O’Malley and other progressives just can’t understand.