There is a lot of murkiness in the dust-up that occurred this week in Pittsburgh over the presence of one, possibly two, companies that are ride-sharing operations that may or might not be taxicab services with drivers who are compensated for their services, which would require a commercial license.  The spokesperson for the company says they are not cabs because drivers use their own vehicles and work on a donation system.  The Public Utility Commission says they are subject to regulation if there is payment.  The incumbent cab companies in Pittsburgh suggested that the Pittsburgh police be given the ability to halt such service because the drivers might not have the proper insurance.

While the issue of whether they are cabs proper or not has yet to be determined, let’s assume for the moment that there won’t be high speed pursuits or roadblocks in the near future but the PUC says they are and the companies willingly submit to the regulatory process to enter the Pittsburgh “market”.  What could the new entrant(s) expect?  They will certainly face protests from the incumbent carriers, one of which was itself protested against within the last few years (the big incumbent noted in its PUC filing that “There is no need or demand for additional service in [the company’s] authorized territory. Diversion of traffic and loss of revenues in connection with the transportation proposed by Applicant will result in diversion from existing carriers of revenue necessary to sustain their existing operations and would have a substantial adverse impact on the public or may result in destructive competition.”  The company that entered the market stated at the time, after producing witnesses, that “[Pittsburgh] is hurting for another cab company,”—presumably it would argue just the opposite if asked to comment on other entrants.  In fact, a company official recently opined that Pittsburgh “…is not a cab town…If there are no conventions here, drivers can’t make a living. That’s why they like to do trips to the airport.”  Is it at all possible that the legions of stories and evidence about poor service and response times coupled with a tightly regulated market have anything to do with the City’s non-status?

Let’s be clear, as we have numerous times in the past.  It is entirely appropriate for the PUC or some other arm of state or local government to regulate cabs on requirements for insurance, safety, and identification purposes, but the “proof of need” standard and the emphasis on ensuring how much competition there is or ought to be have to be left to market forces.