Uber Annoyed

Tuesday, May 5, 2015

This afternoon, this image and rants from angry Kansans hit my Twitter timeline. I didn’t even realize prior to today, that it was even a thing, and when I saw Uber’s announcement my reaction was, immediately … I can’t believe I agree with Governor Brownback!

“As I said when I vetoed this bill, Kansas should be known as a state that welcomes and embraces innovation and the economic growth that comes with it. Over-regulation of businesses discourages investment and harms the open and free marketplace. Uber, and other innovative businesses, should be encouraged to operate, grow and create jobs here in Kansas.”

I don’t disagree. I want innovation, and I especially want it here in Kansas where I’ve lived for 31 years.

However…

I’ve read the law, it’s Kansas SB 117, and it’s just 8 pages. Nothing I’ve seen would prohibit Uber from doing business in Kansas. This isn’t a prohibition of ride sharing services. It doesn’t make unreasonable demands of drivers or the company that prohibit it from doing business. I’m not sure why I’m going to even try to defend the Kansas legislative branch, because I generally think they’re a bunch of Looney Tunes. However, I think Uber is playing social media users and rest of the media into a false narrative.

What if, and I’m just saying, the regulations the Kansas legislators passed were actually in the best interest of consumers… but not Uber? Is that such a bad thing?

Uber, like most companies, doesn’t want any regulation of their business that doesn’t actually benefit them. But every business has to expect some level of government scrutiny, even in an otherwise conservative state like Kansas. “Regulate commerce” is sort of a fundamental reason why we elect people into government.

In this case there were actually some things that would have probably been beneficial to Uber, such as prohibiting municipalities from adding additional prohibition or regulations. But, if their goal is no regulation they’re understandably annoyed with this law and in this case they’ve decided to take their ball and go home.

Full disclosure: I’ve never used Uber services, I’ve never needed to. That said, I don’t have issues with them or the business. I just don’t travel enough where I don’t have my own car or end up renting one for work. I think I’ve hailed a taxi twice in my life.

Here is my (non-lawyer) understanding of what this law does:

• It defines Uber as a “transportation network company” for the purposes of Kansas law and now referred to here as a TNC.
• It explains that TNC drivers are using their personal vehicles for ride sharing.
• It specifically outlines that TNC drivers are not taxi services, private motor carriers, etc. Again this seems like it would be beneficial to Uber to have this codified in state law.
• It would require Uber to register with the state as a TNC and pay an annual fee of $5,000. It would also require Uber to have an “agent” in Kansas.
• It requires TNCs to disclose fare calculation prior to the ride, something Uber already does.
• It requires TNCs to show the license plate and a picture of the driver in the app prior to the ride, something they already do.
• It requires TNCs to provide an electronic receipt for the transaction, something they already do.
• It requires TNC drivers to carry insurance, something they should already be doing. It does not require Uber to insure the drivers, but gives them the option to. It requires a $1m policy be carried by drivers. My understanding is this is the same requirement Uber already has.
• It allows Kansas auto insurance providers to exempt coverage for TNC drivers from their auto insurance policies. I could see this being an issue, where drivers might have to obtain a different “business” policy. But this seems like the cost of doing business for the drivers.
• It requires TNCs to conduct criminal background checks and prohibits drivers from having recent convictions for reckless driving, sexual assault, etc. which seems completely logical. It might be additional overhead, but the cost of this could be passed onto the drivers when they start.
• It requires the TNC to have a zero tolerance policy for drivers who use drugs or alcohol while doing their jobs. This doesn’t seem like rocket science.
• It requires the drivers to only accept prearranged rides via the app, you can’t “hail” an Uber driver from the street. This is pretty much the entire appeal of Uber, and not an issue in my mind.
• It requires the TNC to have a non-discrimination policy with respect to riders, and to make accommodations for handicapped riders. This I found it shocking that Kansas would even care about something like this. I actually applaud them for this.
• It requires the TNC to hold driver records for one year. I don’t know what Uber does in this respect now, but it doesn’t seem cumbersome given the amount of data these companies are holding already.
• It prohibits the TNC from disclosing rider information to third parities without their consent. Again, nice.

In my mind, while all of this does indeed place restrictions on Uber doing business in Kansas, they don’t seem like unreasonable restrictions. Some of them almost conform exactly to Uber’s existing business model. But more importantly, the law actually appears to benefit and protect the consumer when it comes to security, discrimination and privacy.

It would be great to live in the libertarian utopia that many of the technorati want for their services, where innovation and market forces drive consumer protections. In the meantime reasonable government restrictions doesn’t seem like it requires Uber to pull their services completely.

I’m often critical of government attempts to protect intrenched interests, such as Tesla’s constant battle with states who prevent the company from selling cars directly to consumers, because the existing dealer/franchises don’t want that model in the states. I’m also not being critical of Uber as a service, or have any interest in maintaining the status-quo in terms of taxi cabs, etc.

I want Uber in Kansas, but at the same time I don’t think it’s unreasonable to set reasonable minimal expectations for doing business here.