In the latest conflict between technology and government regulation, Virginia’s Department of Motor Vehicles (DMV) has issued a cease and desist order to Uber and Lyft, claiming that their businesses are illegal and cannot pick up passengers in Virginia.
Has this stop them? Not at all! Undeterred, Lyft has responded that it intends to continue operating there, stating in a press release that Virginia residents and others have embraced it “as an affordable and reliable transportation alternative.” Lyft also points out that the current regulations for taxis and limos are outdated and do not account for this new tech-based industry. Uber also criticizes Virginia’s move, stating that it “hurts thousands of small business entrepreneurs who rely on [them] to make a living, create new jobs and contribute to the economy.”
This is an interesting development for Virginia, which has enjoyed a reputation as a business-friendly venue but is now taking a stand many consider to be against free markets. The DMV has already fined Uber and Lyft thousands of dollars and contends their businesses violate Virginia regulations since they allegedly do not “have proper operating authority.” Virginia’s move is in line with a recent trend by other governments in Los Angeles, Portland and San Francisco, where taxicab companies have wielded influence to try halting competition in those markets as well. Uber, which has raised over $300 million in venture capital, is also currently appealing a Maryland judge’s ruling that it must file an application to operate as a traditional for-hire carrier in order to operate there.
These developments demonstrate the unique opportunity that exists for private industry and the government to work together, ensure regulations are updated, and ultimately pave the way for free-market technological innovation. Small businesses should be encouraged to expand consumers’ freedom of choice. Just look at Uber’s unique online consumer rating system – it weeds out problems in their business model, something that legacy carriers don’t bother to do.
This situation also provides a unique opportunity for the federal Chief Technology Officer to work with these companies and local governments and map out an effective national solution that works for everyone.
The intersection of regulation and innovation is a hot and emerging issue impacting cities throughout the United States – Lyft is currently operating in 60 US cities, and Uber has a presence in 100 cities. What is really interesting is the stance of various governments, who argue that technology-based companies are not in trend with regulations. In fact, what is really happening is that government is not keeping pace with new technology.
These trends appear to be on a collision course in Virginia, and this heated dispute will probably require a court to step behind the wheel and decide how to resolve this latest government-versus-technology issue. If the federal government can ultimately provide a guiding hand, hopefully a positive resolution lies down the road and everyone can drive off into the sunset.