Why Is New York Picking on Ride-Sharing Startups?
Ride-share companies aren't having an easy go of it in America's big cities.
Today the car-sharing startup Relay Rides suspended their services in New York City after a judge ruled the company was breaking city taxi laws. Last week, it was SideCar, which shut down services in New York after receiving a cease-and-desist letter from New York Department of Financial Services.
This isn't the first time ride-share startups have taken heat from big cities. Cab-hailing app Uber fought a very public battle with the city of Austin during this year's SXSW festival in March. The companies argue that they aren't actually taxi services, so don't have to play by their rules. The taxi biz disagrees. From the Wall Street Journal:
"This is an extremely simple issue. If you are acting as a taxi or a car service, without the benefit of a license, the TLC will shut you down,” said Allan J. Fromberg, deputy commissioner for public affairs at the Taxi and Limousine Commission. He added that “licensed drivers are drug-tested, their criminal background is checked, their vehicle is inspected to more stringent standards, they are insured to carry people professionally, the companies that dispatch these cars are fully accountable for the vehicle and for the actions of the driver, and it is our responsibility to ensure that the public has these protections when they get into a vehicle that is for hire."
The key phrase there is "acting as a taxi or a car service." Is this what ride-share startups are doing, or is it more like a friend offering you a lift if you're both heading the same way?
The hair-splitting there will determine the future of this rocky, but burgeoning, industry. New York has approved Uber and fellow taxi-hailng app Hailo, but the difference is those apps are used mainly to help locate legacy cabs, not threaten to replace them.
But if history teaches us anything, it's that the future can't be stopped. "Innovation, by its nature, does not always fit within existing structures," writes RelayRides on its company blog. "We remain committed to the democratization of car sharing."