Why ride-hailing technology needn’t leave regulators in the dark


Ride-hailing apps are too easily flouting regulations but it needn’t be like this, argues Perfect Data CEO Darren Tenney.

Technological innovation in the transport industry has, to a large extent, left regulators lagging behind. Ride-hailing apps in particular are streaks ahead of regulations, with some of the better-known app providers finding ways to exploit regulatory ambiguities and enter new markets to conduct their business without being granted regulatory permission.

This is in part because regulators don’t have the same sophisticated technology at their fingertips as these emerging tech giants. While ride-hailing operators gain more and more momentum, giving passengers more journey options and drivers more flexible work, they are overtaking local authorities who don’t have the technology – or the resources – to keep up. It’s time to change that.

Regulators are struggling to keep up

Many regulations haven’t been written with ride-hailing apps, or the gig-economy, in mind. With drivers being able to sign up via the app so easily, not always with the proper licensing checks, and riders choosing the ease of booking a cab via their phones on the multitude of apps available rather than stand and flag a taxi from the street or make a telephone call to an operator, regulators are hard pressed to keep pace and are under enormous pressure to produce appropriate regulation that will keep passengers safe and drivers in check.

The transboundary nature of the ride-hailing business creates several issues for regulators. Firstly, many ride-hailing operators are often held to the same regulations as regular taxi or private hire cabs, many of which weren’t designed for ride-hailing. This has been a contentious point for incumbent taxi drivers in particular. Drivers in Germany, for example, have protested against Uber where a reformed Passenger Transportation Act could mean that Uber drivers would have the same rights as regular cab drivers, but without the same quality control from authorities.

Indeed, ride-hailing giants have had many ups and downs in their fight with regulators the world over– Uber’s legal battle with Transport For London for one, and its shaky relationship with San Francisco’s authorities another. Protests by drivers and many ride-hailing apps’ blatant dismissal of local regulations, are pressuring regulators even more to tighten their reins.

What’s more, local authorities face the dilemma of whether to restrict the potential of these apps, or let them run wild without adhering to the same policies as every other licenced taxi- and minicab. As Mobility as a Service becomes an increasing priority, the ever-growing popularity of the gig-economy looms large, and the proliferation of riders that have already grown accustomed to using ride-hailing apps shows no signs of slowing down, regulators could be doing themselves a disservice by stemming the outreach of this technology. But they also can’t afford for their authority to be trampled on or to risk passenger safety.

The real crux of the matter is that, while many regulations do exist that are perfectly acceptable to all parties and there are many riders and drivers who are happy with the introduction of these apps, regulators are really struggling to enforce their policies, and they are blind to what is going on cab-wise in their jurisdictions.

It’s time to work together

While there may be vast difference in regulations from country to country – from outright bans to attempts to facilitate this new business model – there is no doubt that there is a pressing need for ride-hailing apps that work in tandem with regulators and local authorities, rather than against them.

Technology that helps local authorities with the likes of passenger safety, identifying unlicensed drivers and generating data to inform local environmental initiatives– while still providing the convenience and flexibility drivers and passengers now expect – is what regulators need in order to keep pace with the growing demand for these most convenient of services. If regulators can oversee what it going on in their areas, they will be able to more easily implement their regulations and ensure passengers and drivers are benefitting from the flexibility of ride-hailing.

This kind of technology would also allow for local authorities to work with companies in areas where ride-hailing apps have not yet seen the light of day, providing more mobility services in transport poverty-stricken areas.

Furthermore, proper unified engagement between authorities and ride-hailing apps could lead to a more successful and fairer gig-economy, with app data being shared with regulators to remove the ‘us versus them’ approach. Local authorities will have insights into what’s happening in their jurisdiction – from spotting when cabs aren’t licenced for a particular area to showing them where they could improve roads to avoid congestion – and drivers will be a lot more secure and in control of their working lives. With 82% of customers in recent research from BMGsaying they would be willing to pay more for a ride-hailing service that had better rights for drivers, this opportunity seems like a no-brainer.

While it’s true that the cab industry has been monumentally disrupted by the emergence of ride-hailing apps, so too have regulators been bewildered about where this new technology places them in the food chain. It’s time that regulators have technology that puts them on a level playing field so that they aren’t left in the dark.

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