Rideshare Discussion w/ Patrick Brown of the Mayor's Office

Everybody's a conspiracy theorist. No sleight or misunderstanding outside the tenor of your post @innov8ion @eddieroth @tonymess @lyft.
— Patrick R. Brown (@iPRB) April 30, 2014

@iPRB No conspiracy theories. Just a sample of what peer-to-peer rideshare co's are facing nationally. @eddieroth @tonymess @lyft
— David Goldstick (@innov8ion) April 30, 2014

At every step, the MTC parrots their objection to peer-to-peer ridesharing companies like Lyft primarily on safety and liability alone. But is that really the crux of the matter? After all, Lyft's safety and liability standards are open and available to all.

I'd like to reference a snippet below from this Forbes article on the topic:

"We could of course take them seriously, at their word, that this is all about safety, but why bother to do that when we can look at the larger picture? Which is that every taxi company and commission in the country has been desperately searching for a reason not to allow these services to operate. Even when they do allow it, it’s only after 18 months or so of procrastination.

And it is this that I am certain is contributing to our inability to have nice things. We’ve simply set the rules up so that too much protection is being given to the incumbents in any area of the economy and not enough room being left for those who would disrupt by doing things in a different manner."

@innov8ion BTW, VC backed tech co.'s are not Freedom Fighters for social justice. Scrutiny is not discrimination @eddieroth @tonymess
— Patrick R. Brown (@iPRB) April 30, 2014

I believe we should speak about social justice as it relates to all stakeholders within St. Louis City and County -- not just the taxi companies and drivers. Can we agree to this?

In America, wealth inequality is relentlessly widening. Related, a recent study by Princeton and Northwestern researchers discovered that America is more akin to an oligarchy (rule by the wealthy few) than a democracy, and that the majority of the American public has a statistically insignificant impact upon public policy compared to the wealthy.

This poses a variety of social justice ills within America and in the St. Louis region. So how can the populace live better in a time of stifling by monied interests? The Economist answers with the article, "Peer to Peer Rental: The Rise of the Sharing Economy." Simply put, technology has made it easier for us to share various products and services, with cheaper transactions, and at scale.

Airbnb is likely the best example of the sharing economy and it's thriving in St. Louis. It allows owners to provide patrons with a diverse selection of lodging experiences at highly competitive prices.

Now the sharing economy is expanding to peer-to-peer (personal) ridesharing via companies like Uber and Lyft and offers similar societal benefits.

Staff of the FTC’s Office of Policy Planning, Bureau of Competition, and Bureau of Economics has stated the following regarding anti-competitive behavior against the peer-to-peer rideshare markets in Washington D.C. and Chicago:

"...applications for arranging transportation using personal vehicles may expand transportation options, better satisfy consumer demand, increase competition, and promote a more economically efficient use of personal vehicles. "

Thus, the FTC suggests that peer-to-peer ridesharing options facilitated by companies such as Lyft and Uber are likely to offer various benefits to consumers and society as a whole. Granted, the politically entrenched taxi industry (MTC) may not be amenable to competition offering 20-30% lower fares, but they don't hold greater sway than the public. Do they?

With that said, and regarding social justice, scrutiny, and special interests -- if it's found the MTC holds greater sway than the interest of our region's populace, perhaps it's the populace and the FTC that should turn the tables and scrutinize the Slay and Dooley administrations. Social justice, indeed.

@innov8ion For Profit businesses are bound by SOME rules & yelling "IM DISRUPTIVE" doesnt absolve one from all of them @eddieroth @tonymess
— Patrick R. Brown (@iPRB) April 30, 2014

@innov8ion Some basic rules apply. Expecting a biz to act reasonably & responsibly FIRST is not "hostile" its sensical @eddieroth @tonymess
— Patrick R. Brown (@iPRB) April 30, 2014

First, I believe that Mayor Slay and St. Louis' bureaucratic leaders have worked together wonderfully in helping to build the local Cortex bio-tech and T-REX startup economies that can only help spur economic growth in our region. Their economic work is not limited to these activities, but they seem the most notable.

One can imagine that bureaucratic red-tape was cleared to enable success in these environments.  However, when monied interests are entrenched in the political arena and feel threatened (such as the MTC), an anti-competitive stance often follows.

Again, reference the aforementioned Forbes article:

"We need to recall that there are two ways to get economic growth: the first is by doing entirely new things that expand consumption opportunities. The second is to do old things in a new manner, more efficiently, thus freeing up resources that can be used to do either new things or just more things.

And it’s that second method of growth that I fear is getting kyboshed by the regulatory state. Those who currently do things the old way have too much power to prevent the new methods from becoming established. It’s that, as I’ve said many a time before, we’re not allowing enough of the destruction that is part of capitalism’s creative destruction."

Let's delve further. In its statement regarding peer-to-peer ridesharing, the FTC also states:

"...if regulation of TNP services are warranted at all, they should “focus primarily on ensuring the safety of customers and drivers, deterring deceptive practices relating to fares, safety and liability, and other terms of use, and addressing other consumer protection issues, especially data security and the prevention of identity theft.” In particular, “[r]egulations should not in purpose or effect favor one group of competitors over another or impose unnecessary burdens on applications or drivers that impede their ability to compete without any justification that benefits the public interest.”

The MTC is an organization granted powers by the Missouri Revised Statues, whose members are appointed by both Mayor Slay and Executive Dooley, and in which half of the board is represented by local taxi interests. Is it at all possible that this agency can be expected to negotiate and regulate in good faith with competitors in the peer-to-peer rideshare market that can provide fares 20-30% lower via smarter technology and leaner operations? The reasonable answer is an emphatic, "No."

Patrick mentions in a tweet above that the expectation of a business to act reasonably and responsibly is not hostile. However, it takes two to tango and we should also expect the MTC to act reasonably and responsibly as well. As stated earlier, it is against the MTC's interests to do so, precluding potential entrants in the peer-to-peer rideshare market from competing at all. This is indicative of an anti-competitive environment in which the FTC has already chastised Washington D.C. and Chicago. Will the St. Louis MTC and bureaucracy be next on the FTC's radar?    

A week ago, Mayor Slay responded via a blog post regarding its stance on supposed market fairness. In it, he implied the necessity for Lyft to comply with the same 83 pages of MTC code meant for the local taxi industry. 83 pages?! I'd suggest that expecting peer-to-peer ridesharing companies to abide by the MTC's fat and over-bureaucratized code to be contrary to FTC guidance as shared three paragraphs above.

After FTC action, Chicago has created a more fair, two-tiered regulatory framework. This seems like a common sense step in the right direction that St. Louis bureaucracy should follow. A two-tiered regulatory model should be created locally that protects innovation in the peer-to-peer rideshare market while addressing both consumer safety and liability concerns.

I am a Mayor Slay supporter and hope that policy evolves both in compliance with the FTC's guidance and for the good of the region. As for the local taxi industry, I hope they begin to evolve and experiment to ensure future health for themselves and their drivers.