By Thomas Casey
What if I told you there was an action the New York government could take that in a single, simple moment, would create thousands of jobs, save lives and make a ton a people happy. You’d think the government would do it, right? Well, they failed, miserably.
Bill S04108D would have allowed ridesharing organizations to operate in upstate New York. The shorthand bill takes a very liberal definition of upstate (think of what someone from East Islip would think upstate is). The bill would’ve granted the graces of the sharing economy upon the wilderness-ridden “upstate” expanse of New York State that lies north of the city. Ridesharing is only legal in New York City right now. Uber and Lyft are the big dogs down in the metropolis with some other scrappy competitors. The ride sharers, despite hiccups, have worked wonders. They’ve shattered the taxi cartel and induced fierce, consumer friendly competition across the city. They’re a refreshing alternative to the yellow cabs that patrol the streets. After beating back a futile attempt by Mayor Bill de Blasio to shut them out, Uber and Lyft have provided the good people of New York City with jobs and solid service. Maybe the rest of New York (about 95% of the landmass) could get in on it too?
I find it harshly hypocritical that our legislature touts job creation as its primary objective while rendering thousands of jobs pointlessly illegal. Its “New York is open for business” campaign paints a rosy picture of start-ups galore. Yet, when Uber and Lyft slap down a meaty proposition where all sides win, they balk.
Our first problem is that governments don’t actually create jobs. In actuality, governments that created jobs have just removed artificial barriers so that entrepreneurial risk takers can do the dirty work for them. For example, a town zoning board goes through a months-long laborious rezoning process. All they did was sign a sheet of paper after sucking away enough in fees. With a zoning district change a business comes in, invests capital, hires employees, takes a risk and prays for profit. The town will brag about all the jobs it created, but all it did was stop preventing the entrepreneur from making the jobs in the first place. Imagine if I repeatedly gave you wet willies and then I stopped doing it one day. Would it be right for me to brag that I’ve brought greater peace to your life? Not really. Such is the way with governments and creating jobs.
Anyway, the legislature had this great bill. Uber loved it. Lyft loved it. The SUNY system, our noble organization, formally endorsed the bill. In a statement, SUNY cited the excellent transportation alternative the companies give to its almost 500,000 students. In its most poignant section, the SUNY endorsement states that “issues pertaining to drinking and driving on college campuses can be curtailed by car-sharing services which provide easy and cheaper alternatives to get home.”
We’re talking about saving lives here. Does this bill seem like a no brainer yet? Doesn’t matter if I convinced you already, I have to wait for my horse and carriage to pick me up, since they’re the only people legally allowed to do business here in “upstate” Westchester. I’ve got some more time to hammer home the point.
So who else loved this bill? The city of Binghamton! Uber held an information session in the city last November. A hundred potential drivers turned out to Terra Cotta (lovely place) on State Street. That’s a fair number of newly employed in the city, don’t you think? The mayor, Rich David, spoke highly in favor of the movement. To be honest, if these officials brought ridesharing to Binghamton, I wouldn’t even mind if they went off about how they created the jobs. You can say whatever you want, I just want my car on demand.
So who’s against this? The obvious adversary is the taxi and limousine lobby. They’ve had their medallions and well trodden turf for quite a while. They are not backing down easily. These guys want Uber and Lyft squashed, now. That’s our cue to start supporting ridesharing. When a long time player rallies against an upstart, it is usually an attempt to crowd out competition. Since the taxi dinosaurs can’t compete on service or pricing, they turned to a long time friend of crony business: the government. We’re seeing mighty high political expenditures coming from an industry best known for splashing protagonists of rom-coms with water from a big sidewalk puddle. The taxi industry has more lobbies than the Waldorf Astoria and they pay high sums to make them effective. The money is easy to follow. Mayor Bill de Blasio took in about 10% of his early funding from the yellow cab crew. He picked (and lost) a fight with our tech innovators on that dime. I’m sure Albany is drowning in Crazy Taxi cash as we speak.
Who else sides with the Luddites in this affair? That would be the Assembly. The Senate can check out a little bit on the blame. The Senate was all for Uber. It had a good bill that Uber, Lyft and upstate New York helped create. The Assembly, for some wackjob reason, posted an incorrigible offer. The sticking point resided with insurance policies. The Senate said rideshare apps would need $1 million in insurance for a rider. The Assembly pumped it up to $1.5 million. They couldn’t reconcile by session end.
I don’t need to have an A in Calc II to know there’s a midpoint they could have agreed on. $1.25 million is your magic number. But maybe $1 million was a staunch line or $1.5 million was immovable. I’m really not sure. I couldn’t get a ride to the negotiations. Obviously, Lyft and Uber didn’t get behind the Assembly’s bill. The extra amount was so prohibitive that they would not have any incentive to operate at all. No one would make any money. As much as politicians love talking about creating jobs, they never really think about how many jobs they destroy. The Assembly had a horrifically pointless push that would make it legal but would add way too much regulatory baggage. Imagine if your RA made crazy dorm parties legal, but she added a provision that all attendees must constantly perform the macarena. Ehh, we’ll take it. That was kinda like the Senate’s bill: a decent compromise. The RA downstairs says he’s legalizing parties too, but those revelers must first soak themselves with copious portions of old chicken gravy, and then explode. Nobody’s going to hit up that scene. Such is the Assembly’s bill.
The repercussions of this failure could be huge. One hundred people in job starved Binghamton took the time to explore a possible career option last November as Uber drivers. The legislature failed them. The risk of drunk driving goes unabated in the SUNY system because the legislature couldn’t compromise. There are a lot of letdowns in a future with significantly fewer pick-ups.
Time to come clean. I’ve never used ridesharing. I worked right by Grand Central in the city and walked to my office. I don’t mind hoofing it when I want to explore Central Park or the Highline. I’ve never had the experience of proposing a “5 for 5” as I leave a pink-mustachioed car. Yet, I am intensely loyal to the idea of ridesharing. I consent to pay you to drive. You consent to drive me in your car. We exchange money and services and carry on our ways. I hate that the government has to roll in and threaten to arrest us when everyone is comfortable with the situation. Ridesharing represents a lot about the greatness of a free economy. Entrepreneurs took major risks to unite a ready and active populace with a long scorned client base. A revolutionary platform made the connection between servicers and customers easy and cheap. Even hard core left wingers (ironically a giant portion of Uber’s/Lyft’s base) have to admit that the free market really got it right here. Just keep that in mind the next time you’re going to a “Smash Capitalism” rally in the backseat of New York City, ultra cheap UberX.
Of course, Uber, Lyft and all the others aren’t perfect. The old taxi companies aren’t perfect either. Any company, no matter what, will start to fester and decay if it gets monopolistic protection for far too long. An economy with low barriers to entry will keep all the players fighting for customers and becoming the best they can be. That’s why it is up to the legislature to create more opportunities for business and jobs, instead of constantly squashing them.
What can we do about it? Uber’s app has a tantalizing look at the future if you open it in the Binghamton area. It shows phantom cars driving, estimated price levels and predicted wait times. The top of the screen has links to sign a petition that goes to our legislatures. You can ride Uber in New York and other cities. Leave good reviews if it worked well. Leave criticism if it was poor. Help these fledgling companies get better and better. When the session reconvenes in January, we’ll be counting on our officials to free up the marketplace.