Uber’s announcement this week that it will suspend operations in Broward County is not surprising. Uber threatened to stop operating in the county several times, both before and after the county passed an amended ordinance governing Uber and other transportation network companies.
Uber’s announcement is revealing because the regulations passed by Broward County are not overbearing. Rather, they are simple, common-sense safeguards designed to protect the public. Instead of working with the county to improve public safety, Uber, which has been operating illegally in Broward despite formal warnings, apparently determined it made more economic sense to abandon it.
There were three main features of the amended ordinance. First, Uber and other TNCs are required to have vehicles inspected by a vendor approved by the county. Inspections have been required for for-hire vehicles for decades. Uber did not want to comply, though it has complied with similar requirements in other jurisdictions, including New York City.
In addition, the county required more thorough background checks of drivers. Background checks have been required for all for-hire drivers for decades. The background checks currently run by Uber might not detect many offenses or infractions. Uber did not want to comply.
Further, the county required TNCs to have the insurance mandated by state law. In fact, during an April 28th commission meeting, Uber’s own insurance policy manager indicated that Uber was “pleased to hear” that the county’s proposed insurance requirements would track those required by state law.
However, once the ordinance passed, Uber did not want to comply.
Uber claims Broward County has created a “hostile” regulatory environment. However, these regulations also would be imposed on all for-hire transportation licensed by the county. Taxis, shuttle vans and limousines are required to have the same insurance, vehicle inspections and driver background checks. Every legal for-hire operation in Broward, many of which are small local companies, complies with these requirements. They do not have the purported $40 billion valuation that Uber has.
The taxi industry did not benefit from the new regulations. In fact, the ordinance gave TNCs an unfair competitive advantage by not imposing fare regulations, while taxi rates are set by the county. Taxis must charge those rates at all times. In contrast, TNCs can undercut those fares and charge less. Also, unlike taxis, a TNC can make up that difference by charging as much as it wants during peak usage periods.
Broward sought to create a framework that allows TNCs to operate, while balancing the need for public safety. Uber, with all its resources and despite the competitive advantages preserved in the ordinance, once again has threatened to cease operations because the county did not give in to all its demands. This is a choice Uber is making, but it is not forced by the regulations adopted by the county.