Taxi companies are not happy about having to compete with ride-share services such as Uber and Lyft. Taxi companies and taxi drivers are collectively “resisting an industry that they say threatens their livelihoods and the well-being of consumers.”
In Los Angeles, the number of taxi trips arranged in advance has fallen by 42 percent, the total number of trips has plummeted by nearly 30 percent, drivers have seen their trips fall by as much as 40 percent, and the city has lost 586 drivers over the last three years.
In San Francisco — the corporate home of both Uber and Lyft — “the number of trips taken per taxi dropped by more than two-thirds over a two-year period.”
Taxi drivers and taxi companies in cities in the United States and around the world have sometimes taken drastic measures to pressure government into stifling their competition. Taxi drivers have taken to the streets in protest of ride-sharing services. Taxi companies have taken Uber and Lyft to court. In Massachusetts, the state legislature implemented strict background checks that disqualified thousands of current Uber and Lyft drivers.
The regulations authorized by the Massachusetts legislature in 2016 for ride-hailing drivers are “some of the strictest in the nation.” Drivers can be disqualified “if their records show license suspensions, driving infractions, or serious crimes such as sexual and violent offenses, among other charges.” The new state system began checking the records of drivers in January after Uber and Lyft “signed an agreement to submit their drivers to the reviews a year before the law would have required.” The state reviewed the criminal and driving records of nearly 71,000 drivers who had already passed background checks by Uber and Lyft and rejected 8,206 of them. The state looks back seven years for driving violations and less serious violent crimes, but looks back “for unlimited periods at other offenses, such as sex crimes, more serious violent crimes, and drunken driving that results in serious injury or death.” The most common reasons for rejections were related to driver’s-license status: “Many had suspended licenses or had not been driving long enough to qualify for the ride-hailing services.” Hundreds were disqualified “for having serious crimes on their record, including violent or sexual offenses.” Gov. Charlie Baker said that “public safety is a top priority” and that his administration looks forward “to future partnerships with Uber, Lyft, and others to grow this innovative industry and support more jobs and economic opportunities for all.”
Cabdrivers argue that the new ride-share services “have an unfair advantage because, in most cases, they are allowed to operate free of the rules, regulations, and licensing requirements of traditional taxis.”
But in a free society with a free market, taxi companies would be free of government rules, regulations, and licensing requirements. They would not be controlled or overseen by government in any way. There would be no taxi medallions. Anyone could start a taxi service. Any type of vehicle could be used. No taxicab would have to have a permit. Taxi drivers would not have to obtain a license. Taxi fares would not be set by the government. Vehicles used as taxis would not have special inspections. And taxi companies would have to compete with ride-share services.
The libertarian solution is not to have the government regulate companies such as Uber and Lyft more, but to have the government regulate taxi companies less so that both groups can compete on a level playing field.
The case of the state background checks of Uber and Lyft drivers in Massachusetts brings up an important issue that relates to any business.
Who should conduct background checks?
One cannot argue that the state of Massachusetts has the right to conduct additional background checks on Uber and Lyft drivers because the drivers are driving on state roads. No background checks are required for residents of Massachusetts or visitors from other states to drive on Massachusetts roads even though they might just as well have criminal records and might even have committed heinous crimes.
So, the background checks are apparently just a public-safety issue. That makes them legitimate, right? After all, “You can’t be too safe,” as Boston Police Commissioner William Evans said.
First of all, we know that the state background checks weren’t just established because of public safety. The background checks were instituted “after tense negotiations that included lobbying by the taxi industry.”
Second, outside Massachusetts, “The ride-hailing companies typically are the only entities that vet drivers; even states that have adopted regulations for the burgeoning industry generally rely on the companies.”
Third, the government can do almost anything it wants in the name of “public safety.” That is why we have laws concerning seatbelts, cell-phone use while driving, bicycle and motorcycle helmets, and car seats for children. But where does it all end? How many “public safety” laws are too many?
Fourth, many of the crimes that show up in state background checks are crimes in search of a victim. That is especially true in the case of drug crimes.
Fifth, if “public safety is a top priority” and “you can’t be too safe,” then why doesn’t the state of Massachusetts perform background checks on all employment applicants to every company that does business with the public?
Sixth, the fact that some Uber drivers commit crimes is irrelevant. Plenty of doctors, lawyers, mechanics, accountants, clerks, welders, managers, engineers, laborers, carpenters, athletes, cashiers, and state government employees commit crimes. Uber drivers don’t have a monopoly on criminal activity. Some parents commit child abuse. That doesn’t mean that the state should perform background checks on all couples before they are permitted to have children.
Seventh, and most importantly, state government background checks imply that companies aren’t interested in or can’t be trusted to ensure the safety of their customers. That, of course, is ludicrous. Uber has said that “the company runs criminal background checks on all new drivers and rescreens them twice a year.” Under the company’s rules, “drivers can’t join the service if they have had a felony conviction in the past seven years or a major driving violation, such as a suspended or revoked license or registration, in the past three years.” Uber and Lyft have both pointed out that “they are limited by state law to checking just the last seven years of an applicant’s history, which they said explains why so many drivers they had passed flunked the government’s more thorough review.” So here we have a case of the government creating a problem so it can offer a solution.
Who should conduct background checks? Any company that wants to. But the state should neither mandate them nor conduct them.