The Regime Trembles at the Sight of a Smartphone

By Steve BucksteinCascadeNewLogo

“The regime trembles at the sight of a smartphone.”* That quote comes from Portland-based independent journalist and world traveler Michael J. Totten. One might guess that he wrote it about Portland’s city government and its aversion to ridesharing services like Uber that rely on smartphone apps to put riders and drivers together. But he didn’t.

He wrote it about the Cuban government after his visit to Havana last year. He summed up his observations in a lengthy piece he titled “The Last Communist City.” Hopefully, now that President Obama is taking steps to liberalize relations with Cuba, Havana may not be a communist city much longer.

But as we celebrate a new year, Portland still seems mired in the past. City regulators first tried to fine Uber for picking up passengers without official permission in December. Then the Mayor agreed to form a Task Force to revise its antiquated taxi regulations. Uber agreed not to initiate rides within city limits until April 9, by which time the City hopes to figure out how to accommodate the modern app economy.

Still, given how upset Portland officials were when Uber entered the city unannounced, the next question one might ask is:

Which city will welcome Uber and other ridesharing companies to serve their citizens first: Portland, Oregon or Havana, Cuba?

* Letter from Cuba: To Embargo or Not, Michael J. Totten, “World Affairs,” March/April 2014

Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.


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Posted by at 05:00 | Posted in Economy, Employment, Government Regulation, Jobs, Leadership, Portland, Portland Politics, Transportation | Tagged , , , , , , | 52 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Jack Lord God

    Portland’s reaction to Uber has been a fascinating study in the government mindset.

    Haven’t we heard for the past two decades how Portland prides itself as a technologically advanced city?

    From plans for free wireless broadband everywhere, to incredible tax breaks for green welfare companies to provide the jobs of tomorrow we hear endlessly how Portland is a city that prides itself on being hooked in to the information/ high tech economy.

    Now the ultimate irony – a taxi company pulls back the curtain on this nonsense. The fact that a dopey iPhone app is something the city needs to form a commission to dwell over for several months is telling.

    To wit – These elites aren’t forward thinking at all. They simply liked spending money on gee whiz neato projects so long as it was other peoples money. Yet they were blindsided by a several year old app for a decades old profession, a taxi call service. Forward thinking? Not likely. Being attracted to bells and whistles so long as mommy and daddy are paying isn’t forward thinking, it’s Christmas.

    If I were the cynical type I would state the obvious – that Portland’s ruling class seems to find glee and joy in high tech when it means spending other peoples money on pet projects. If it means such high tech might cut into their revenue stream, then horse and buggy days are here to stay.

    • DavidAppell

      If an Uber car you’re riding in has an accident, who pays your medical and disability bills?

      • Randy

        Whoever you can win a judgement against.

        • DavidAppell

          You think that raises the confidence of anyone?

          Go ahead, ride Uber. If you are injured in an accident, good luck suing everyone and anyone until you get justice, or give up from exhaustion. The “free market” at work!

          • Randy

            I would trust uber to have insurance just like I trust any cab or limo company. I never check first.
            Perhaps shame on me.

          • DavidAppell
          • Randy

            I’m not that surprised. It doesn’t say what uber is liable for for passengers. And to an ambulance chaser, it wouldn’t really matter.

          • David from Mill City

            No, your assumption that they are insured is a reasonable one. And in the case of the other common carriers it is correct as our government, acting on our behalf, makes sure that they have the proper level of insurance coverage. And in this case having it done by a government agency is the most efficient way to do it.

          • David, you’re free not to ever use Uber or any other ride sharing service.

          • DavidAppell

            But people who use Uber without doing a week’s worth of research on their liabilities would potentially be left in the middle of a tangled legal situation. Doubt you’d like that if it were you.

        • David from Mill City

          And if you can’t prevail who pays? Under our current system, the general public gets stuck with at least the ambulance and emergency room part of the bill. There is a reason that public carriers (i.e. taxicabs, limousine services and bus companies) have an insurance requirement, and that is part of it.

          What is often forgotten is that there is a real need at the root of most rules and regulations. Regulations are not the whimsical creation of some bored bureaucrat, but rather a response to some need real or perceived. Tossing them out just because some group does not like them is as irresponsible as keeping them on the books when the need for them no longer exists.

      • David, here’s Uber’s info on its $1,000,000 liability insurance coverage per incident:

        • DavidAppell

          “Ridesharing insurance leaves many drivers in the lurch,” Jon Fingas 12/23/14

          • “Uber and the flimsy case for regulation”, Steve Chapman 1-7-15

            Also, automobile insurance in general actually followed the advent of the automobile itself. If everyone had waited to drive a car until comprehensive insurance products existed, they never would have been developed.

            Concerns about ride sharing insurance coverage are real, but they shouldn’t be an excuse to keep antiquated city taxi regulations in place that now serve to simply protect some businesses at the expense of others and the riding public.

          • DavidAppell

            “If everyone had waited to drive a car until comprehensive insurance products existed, they never would have been developed.”

            This isn’t 1910. We now clearly know that occupants of vehicles can get in serious accidents. We know the role of insurance in covering such eventualities. You’re proposing, Steve, that we should toss all that aside for some so-called “free market” approach to public transportation.

            Q: You take Uber from the airport to your home. Halfway there the car gets an accident, and your neck is broken. You’re paralyzed from the neck down. Do you get any recompense, and from whom?

            Or does the “free” part of “free market” mean you get nothing?

          • David, if you’re not comfortable with the insurance coverage on Uber rides, or taxi rides for that matter, don’t use them.

            I do agree with you on one thing. This isn’t 1910. You might tell that to Commissioner Novick and Mayor Hales with regard to the modern app economy, and even with regard to the value of streetcars versus rubber tired vehicles.

          • Jack Lord God

            It is something of an absurd point. Are we to believe the sudden keen interest in insurance disparities?

            Of course not – because if it were pointed out that government generally sets strict, and very low liability limits for itself, yet operates all sorts of modes of transportation with nary a concern from David, it suddenly makes it very hard to take the sudden insurance worries with any degree of seriousness.

            In short David has zero concern for insurance disparities, and hardly is interested in protecting the poor citizen from uber on that basis. The argument is a fiction, a stooge stand in for the fact that the real basis for the dislike of uber is it is outside the sphere of government.

            In other words, the objection to uber was built on a foundation of dislike at it being free market rather than heavily regulated or government controlled – the insurance bit really being nothing more than a fiction to obscure the unpalatability of that basis to anyone sentient.

      • Mark


    • David from Mill City

      One of the essential components of a city’s transportation system, is taxi service. How it is provided is and should be open for discussion and change, but the service needs to exist. It appears that Uber wants to provide at least a portion of that service, great. The question that needs to asked is, can it provide it 24/7 for the long haul, and can it be accommodated within the existing system such that should it be unable to meet the need that the existing system still remains able to meet the need.

      The bottom line as I see it is that there is a portion of the community that depends on a functioning taxi-like service, regardless of how it is provided. It is a community need just like garbage service and as the authorized agent of the community it is governments responsibility to insure that the service is available when needed.

  • wfecht

    The city council and the taxi companies are in bed together. People whine about corporate welfare. well here it is right in their face. City government provides corporate welfare ( protection) in exchange for tribute (licensing fees) thus preventing any start up from invading the sanctity of the cab companies territory. sweet deal. to bad for start up business. the people of portland would be best served if all the regulations and licensing fees were removed. free markets work best.

    • David from Mill City

      A free market based system is too cyclic to provide a reliable taxi system, that is one that provides service to all segments of the community at all times. Making it is very likely that the people of Portland would not be served well if the taxi regulations were eliminated.

      To stay in operation a taxicab operator needs to be able to earn enough fare revenue to meet his expenses. Generally speaking the total demand for taxi service in a community is relatively fixed. Have too many Taxicabs and each taxi’s share of the revenue pie is too small to stay in business. Which results in too few taxicabs, long waits for a ride and high fares. Which in turn makes operating a taxi appear to be a real money maker which results in too many taxicabs and the cycle begins again.

      A properly drafted set of taxi regulations, besides addressing basic safety concerns, should insure that there are enough taxis to meet the communities needs at reasonable rates while at the same time insuring that there are not so many taxis that their operation is not profitable. Additionally as some operating time periods or customer types are more profitable or desirable then others, those regulations should also insure that taxis are available 24/7 and that sufficient handicapped equipped vehicles are available to meet the need of the disabled community, something a free market system is not likely to do.

      • Your arguments against a free-market in taxi services could be made against grocery stores, shoe stores, appliance stores, and in Portland – bike stores.

        Why doesn’t the City regulate all of these, and use its collective wisdom to tell us how many bike stores we are allowed to have, what their hours of operation must be, what they must charge, etc? Aren’t bikes a critical part of Portland’s transportation infrastructure? What if there are too many bike stores and some can’t make a profit? How would Portlanders get around 24/7 without just the right government-mandated bicycle infrastructure in place?

        • David from Mill City

          Yes, that argument could be used but not too effectively. In the case of the appliance store, shoe shops and bike dealers what they sell can be gotten over the Internet or from stores in other near by communities options not available to the taxicab user. Grocery Stores could be a bit more problematic, but using a store in another community is do able it just takes planning. On the other hand, the last time I used a taxi was to get to jury duty when my car would not start using a cab from another town just would not cut it.

          Taxicabs are an essential component of our overall transportation system. Leaving the level of service available at any given time to a fickle business cycle does not provide the reliability that a community needs.

          Assuming that Uber is not just a flash in the pan fab, but rather is here to stay it needs to be integrated into our existing transportation system in such a manner that the public still has access 24/7 to a taxi-like transportation service.

          • Of course, shoes, appliances, bikes, etc. could not be gotten over the Internet before there was online shopping; not that many years ago. Yet no one seriously proposed a government regulated network of such stores.

            The advent of the Internet, smartphones and ride sharing apps should make it less appealing to regulate taxis and their competitors, not more.

          • David from Mill City

            Steve, the advent of the Internet, smartphones, ride sharing apps and driverless vehicles are all very valid reasons to revisit all the rules and regulations regarding the operation of bodies, what ever their form, that provide taxi-like services to the public. And as a result of a careful and thoughtful examination of the existing rules and regulations and impact those innovations and others might have on the provision of taxi-like services to the public, those changes and revisions, up to and including out right repeal be made. Making sure that when this process is completed that a safe reliable taxi or taxi-like service is available to the public 24/7 at a reasonable cost.

            I am not arguing that change is not needed, but rather that one, taxi or taxi-like service is a necessary component of our overall transportation system and two that permitting an unregulated service provider into a regulated market place is not a way to insure a positive out come.

          • Thanks for the clarification, David. I agree with you that “permitting an unregulated service provider into a regulated marketplace is not a way to insure a positive outcome.”

            I’m arguing that the solution is to remove antiquated regulations from the existing companies, not adding those antiquated regulations to the new companies.

            We can argue over which regulations are actually helpful to the public and which simply protect the industry, but it seems evident that a freer marketplace will benefit both riders and providers willing to compete.

      • NAFTA Refugee

        Sooooooooo business cycle bad. Socialism good?

        Like Mr. Buckstein says, you’ve just described every business I’ve ever worked for. They teach this stuff in business statistics class. Is the real world too scary? This is why everyone is pursuing government work.

  • thevillageidiot

    My bet is Havana, oregon.

  • Bob Clark

    Uber and other competitively bid ride share, taxi systems are also a threat to public transportation. Imagine paying $5 to $10 bucks for a door-to-door ride across town versus the existing monopoly taxi cab price of like $40 or more for the same ride. A certain percentage of folks, even those of lower income, will be tempted to forgo walking, standing, and walking again taking an hour or more via the public transit system. (The most competition will come in the shoulder and off hours, as it effectively begins a diurnal road capacity pricing program.)

    Moreover, at some point shopping stores of size may start running small buses around town to pick folks up and deliver them to their store(s) if allowed to establish their own commuting service brand.

    Tear down Portland’s artificial monopolistic walls.

    • NAFTA Refugee

      The casinos bus the elderly to the shiny shiny machines on a daily basis.

  • DavidAppell

    Steve: the day your column appeared, Cuba released 53 political prisoners, some of them Americans.

    What a terrible thing, eh?

    • Why is that a terrible thing? I think it’s a great thing. I have argued for the U.S. to end the embargo on Cuba and to normalize relations for decades.

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