Should Government Regulate Uber Relative To Taxi Companies

Introduction

The topic on how the government should regulate Uber relative to taxi companies has been a controversial issue since the company was first introduced. Uber is a ridesharing app for smartphones, that allows you to order a car with the press of a button. To consumers, it is viewed the same as a taxi but with easier use, shorter wait times, and usually cheaper prices. The reason Uber tends to be cheaper than cab companies is due to the fact that they currently do not follow the same regulations that taxis are required to. Some believe that Uber should not be regulated, and some do. In this paper, I will explain why I think that government should municipally regulate Uber to a certain extent, and also lower taxi regulations to match.

After that Uber and other ride-share companies may spike their prices since they are able to, being that there are no regulations against doing so. Uber already raises prices whenever they are able to. This is referred to as "surge pricing," which they participate in on holidays and in crises, such as when there was a subway outage in Toronto and Ubers prices spiked 1.5 times their normal prices (Tencer, 2015). If the government is involved they can produce policies that will ensure economic efficiency, and make sure that this does not happen too much. Another issue that under regulation causes is an issue of safety. If there are no regulations that require any sort of background check, anyone could be employed no matter their driving history or criminal record. Also, if there are no strict obligations on maintaining a vehicle to be safe and get checks. These safety issues can pose externalities, in these cases it could occur if a driver causes harm to another vehicle or pedestrian due to the fact that he was an unsafe driver that Uber employed without checking if he was fit to drive prior. Safety issues could also relate to asymmetric information if the consumer was not aware that this driver or the vehicle was not properly checked making it

It is believed that the next argument regarding this issue is what level of government establish the regulations on transportation services, and that "it would be harder to take the same action at a national level because of the constitutional restrictions on Congress" (Takala, 2016). I believe this because each city's needs are different, and it is important to cater to each need correctly. Some needs include the amount of demand or supply needed in a city, prices of other transportation in the area, number of people, and more. But in order to maintain some consistency, there should be a guideline stating the topics and certain requirements that will be incorporated to each municipality's policies. This will ensure that regulations between cities will not vary too greatly, and that they will all be fair and cover the right issues properly. Even Uber agrees that there is a right way to regulate, stating that there are "are regulated quite successfully in more than 70 jurisdictions in the United States, both at the state and/or city level. There is a model on how to do this" (Wong, 2016). These guidelines will not be strict policies, but rather concepts that can be critiqued to fit the city properly. If they were enacted at a provincial or federal level it would create regulations that are too broad, and would not fit every city well, being inefficient to