Why Uber is safer

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The head of the Australian Taxi Industry Association (ATIA) has hit out at Uber and Lyft, calling the popular ride-sharing services “cheap copies” of taxis, and arguing that they should be forced to comply with the same regulations that have stifled innovation in the taxi industry.

ATIA CEO Blair Davies made these comments under the guise of public safety:

“It’s not competition that is the issue here,” Mr Davies said. “It is the safety of the community and working conditions of drivers that we are concerned about.”

Unfortunately for Mr Davies, these “imitation taxi services” are not only cheaper and more convenient than traditional taxis; they also provide increased safety for consumers.

Unlike traditional taxi services, ride-sharing apps facilitate cashless transactions between drivers and passengers. Both the driver’s and passenger’s information is available to the other party before the transaction occurs, and both have the ability to rate the other party afterwards.

This means that if a crime occurs then all the personal information about the perpetrator is available and can be sent directly to the police. Anyone stupid enough to assault an Uber driver, or a driver stupid enough to assault a passenger, will effectively be leaving a copy of their driver’s license and credit card with the victim of the crime.

This is far safer—for both passengers and drivers—than traditional taxi services, which carry large amount of cash and pick anonymous passengers up off the street.

Furthermore, drivers who do not keep sufficiently high ratings are booted off the Uber and Lyft platforms, and customers with a poor rating are unlikely to be able to find a ride.

These safety and quality assurance mechanisms not only highlight the absurdity of Blair Davies safety concerns, they eliminate the need for government regulation altogether.

But regulation of ride-sharing is not only unnecessary, it is also counter-productive.

It took a tech company from San Francisco to create these transportation innovations because taxi industries across the country, and across the world, have long been crippled by complacency.

This complacency was caused by government regulation that increased barriers to entry and protected the taxi industry from competition.

Imposing these arcane regulations on Uber and Lyft would stifle the growth of ride-sharing and reduce public safety as a consequence.

Australia should embrace the sharing economy and remove the regulations that reduced competition and stifled innovation for decades.

For more on the sharing economy, check out the IPA’s paper by Chris Berg and Darcy Allen: The sharing economy: How over-regulation could destroy an economic revolution.

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