For decades the taxi industry has been operating under the state and local regulations. From Los Angeles to San Francisco and from San Diego to New York the taxi companies along with taxi owners and drivers have been paying thousands of dollars every year to government entities to be able to operate within their control and under their rules. Most cities have limited the number of cabs that could operate within its territory and some have even treated a taxi permit as a medallion – something you could take to the bank and get a loan against it. From tough application procedures to operating requirement and safety precautions, the state and city agencies have been keeping taxis fair.
Not long ago some one dropped a bomb into the industry. The bomb was Uber. Bypassing nearly most, if not all, of the state and city regulations, the company started offering pretty much the same service as taxis do but they did it under the category of “social ride-sharing”. It is a supply and demand driven service, that offers a convenient app to order a ride, aka a taxi. Demand dictates the price, but the lowest rate is pennies under that of taxis. If demand grows the price per mile of a ride in Uber can be us much as $15+ per mile.
In essence, Uber entered into the industry and ignored all rules and regulations. By not following these rules and not paying the fees collected by the cities or the states the company has engaged in an unfair business competition.
So why didn’t the State of California and the City of LA stop Uber or make them “follow the rules”?
Uber came into the game “prepared”. For a long time, the company executives have been getting well acquainted with the local and state politicians. The CEO has reportedly contributed over $250,000 to Eric Garcetti’s campaign for LA Mayor. As result, the City of Los Angeles has not taken any actions to resolve this issue.
It is apparent that Uber is a transportation company. If you fall for the “ride-sharing” self-created category you should explain the fact that nearly 100% of Uber drivers do this for a living and no one in any sense is “sharing” a ride or picking up “friends” on their way to a club. So why should taxi and limo companies pay thousands of dollars to the city and the state and Uber coast by?