With Uber’s business model facing increased scrutiny in Connecticut and elsewhere, the state held a legislative hearing in Hartford on Monday to debate the optimal level of regulation imposed on ride-sharing companies.
Testimony from the hearing revealed that taxi industry lobbyists helped bring about the need for a public hearing. State Rep. Sean Scanlon, D-Guilford, a member of the Transportation Committee, finally brought the issue to a public forum after proposing a bill that would place ride-sharing companies under the jurisdiction of Department of Motor Vehicles in January. Should the bill become law, Uber and other similar companies would face stricter industry standards for safety and insurance. But the increased regulations, some say, would do more harm than good by interfering with the market excessively.
“It is important that this new marketplace remain open for competition and innovation,” Policy Director for the Yankee Institute for Public Policy Suzanne Bates said in her testimony to the Transportation Committee. “The fewer regulations you place on the industry now, while it is still in its infancy, the more likely new businesses and business models will be able to develop and grow right here in Connecticut.”
Numerous people — ranging from other state representatives to taxi and Uber drivers — also gave their testimony to the committee, clashing over points about market conditions, licensing and hiring practices. In the hearing’s audience, several Uber drivers could be seen sporting Uber T-shirts to show their support for the company.
Still, Scanlon showed particular attention to the issue of user safety because in the status quo the company operates with so much autonomy.
“[A local taxi] agency sets an expectation for the public that they can trust — they know that the car they get in or the train they get on is safe,” Scanlon said at the hearing.
He also cited Uber’s use of private investigation companies for background checks as a point of concern. Taxi companies use the Federal Bureau of Investigation to assist in the driver vetting process, Scanlon noted.
Another potential risk brought up during the hearing was the ability of Uber drivers to improperly use personal insurance policies when driving for the company, rather than the expected commercial policies for licensed taxi drivers.
Many local taxi drivers also called for increased regulation on the grounds that Uber has claimed an unfair competitive edge due to these advantages.
“I have to work 14 hours a day to maintain a living because of Uber,” said Ernest Pagliery, a driver for Greenwich Taxis.
However, state Rep. Tony Guerrera, a Democrat representing Newington, Rocky Hill and Weathersfield and chair of the committee, disagreed, saying that taxi companies were attracting less business based on the quality of services rather than an unfair environment based on regulations.
“It’s competition, and our job is to make sure that it’s a level playing field. The consumer should have the choice of how they are going to get where they want to go,” Guerrera said.
State Rep. Fred Wilms, R-Norwalk, supported Guerrera’s point that customers tend to choose according to their personal preferences. Still, others maintained that regulation could still be important in improving safety conditions.
Uber currently operates in 55 countries and dozens of American cities.