Dennis Cakert

Thanks to AZ Gov. Doug Ducey, Ridesharing Allowed to Pick Up at Phoenix International

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Posted by Dennis Cakert on Wednesday, March 2nd, 2016, 2:49 PM PERMALINK

Phoenix City Council voted 5-4 to allow ridesharing services to pick up passengers from Phoenix Sky Harbor International Airport. The vote comes nearly two months after Arizona Gov. Doug Ducey (R) in his State of the State address called on the city owned airport to change protectionist regulations:

“More than 40 million passengers enter our state through Sky Harbor International Airport every year. But you can’t order an Uber or Lyft because unelected bureaucrats at city hall are protecting special interests. Sky Harbor may be a city airport, but it’s an Arizona vital resource used by citizens all over the state, and our economy is dependent on its success. I call on Phoenix city government to lift these unnecessary regulations immediately.”

While the new policy allows passengers to use ridesharing, the city insisted on a fee structure that allows them to fleece the riding public $4 on every ride from the airport.


Estonia Aims to Be First European Country to Legalize Ridesharing

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Posted by Dennis Cakert on Tuesday, March 1st, 2016, 1:49 PM PERMALINK

The Estonian Parliament hopes to amend the country’s transportation act and become the first European country to legalize ridesharing. Estonian Prime Minister, Taavi Rõivas, stated:

“Wouldn’t it be reasonable at a time when a large part of the world is finding protectionist reasons to prohibit the sharing economy if we, Estonia, would be the first country to welcome Uber, Taxify and Airbnb? These business models do not just mean better competition and better service levels, but they may also become a part of the solution to Estonia’s sparse population issue, and incentivize more people to become entrepreneurs”

Read the full article here.

 


Norquist: Uber Will Be Against the Law if Hillary is Elected

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Posted by Dennis Cakert on Friday, February 26th, 2016, 10:51 AM PERMALINK

Grover Norquist warns that many sharing economy services would be against the law under a Hillary Clinton administration. During an interview on C-SPAN Washington Journal, Norquist said:

“Uber has created hundreds of thousands of jobs in the United States. Millions of customers are very happy. They had to go around organized labor, the government and taxi commissions. Hillary Clinton has announced she has an approach that the labor unions want that would basically limit or ban independent contractors. Uber would be against the law if Hillary Clinton was able to impose her vision.”

Independent contractors are the backbone of the sharing economy. The flexibility and freedom for workers to be their own boss and set their own schedule is what makes it attractive to millions of users.

Yet Clinton promised in her Economic Policy Address to impart the will of organized labor and “crack down on bosses who exploit employees by misclassifying them as contractors” because she thinks the sharing economy is “raising hard questions about workplace protections and what a good job will look like in the future.”

“Cracking down” on contractors would deprive Americans of the freedom to be their own boss and cripple the sharing economy. 

 


Planesharing Aims for Liftoff Despite FAA Drag

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Posted by Dennis Cakert on Tuesday, February 23rd, 2016, 1:13 PM PERMALINK

An amendment sponsored by Congressman Mark Sanford (R-S.C.), legalizes the use of digital platforms by private pilots who want to notify passengers when they have open seats. In exchange for the ride, passengers agree to share the flying expenses. The amendment states as follows:

Not later than 60 days after the date of enactment of this Act, the Administrator of the Federal Aviation Administration shall issue or revise regulations to ensure that a person who holds a private pilot certificate may communicate with the public, in any manner the person determines appropriate, to facilitate a covered flight.

The practice of pilots sharing expenses with travelers is an age old tradition. A pilot posts on a bulletin board saying they have open seats and anyone willing to share the cost of gas, food and drinks is welcome to climb on board. Pilots are not required to have a commercial license because they are simply splitting costs, not flying for profit.

In the same way ridesharing uses digital platforms to revolutionize ground transportation, a few savvy entrepreneurs designed similar technology to connect private pilots and would be air travelers. Instead of posting on a bulletin board, a pilot posts on the Internet to a much larger audience.

But in August, 2014, the FAA shut down planesharing. The regulators decried it is illegal for a pilot to give out open seats to anyone other than a friend. Because planesharing technology connects pilots to strangers the FAA believes it is a commercial enterprise and requires a commercial license.

Planesharing companies fighting the FAA ruling, such as Flytenow, believe the means of communication between pilots and potential passengers is not grounds to shut down the innovative service. The amendment is attached to the Aviation Innovation, Reform, and Reauthorization Act of 2016 (AIRR).

 


Austin City Council Votes to Force Ridesharing Services Out of Town

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Posted by Dennis Cakert on Thursday, February 11th, 2016, 5:36 PM PERMALINK

Austin City Council voted 8 - 2 to reject a ridesharing initiative supported by over 65,000 citizens. The initiative is now scheduled for a public vote on May 7th.  

The vote is a slap in the face to local organizations Austin Music People, ATX Safer Streets and The Old Austin Neighborhood Association who spearheaded opposition to a hostile ordinance passed in December that would chase ridesharing services out of town.

The December ordinance requires all ridesharing drivers to submit fingerprint background checks to the FBI and carry a company logo on their personal vehicles. It also imposes a one percent revenue tax on ridesharing services and an additional one percent revenue tax if they fail to meet certain safety standards. Uber and Lyft said these rules are inhospitable and plan to leave the city if they are enacted.

Not wanting to lose a coveted means of transportation, petitioners gathered well over the required 20,000 signatures to demand city council consider their initiative. The petitioner’s ordinance prohibits fingerprinting drivers, limits fees to one percent and does not require drivers to put company logos on their personal vehicles.

Austin City Council’s rejection of the grassroots petition now puts the ordinance to a city wide vote on May 7th. The city will redirect $800,000 worth of taxpayer dollars away from other funds to cover the cost of the special election. 


Annapolis Mayor Mike Pantelides Aims to Extort Ridesharing Customers

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Posted by Dennis Cakert on Monday, February 8th, 2016, 6:21 PM PERMALINK

Mayor Mike Pantelides has proposed an ordinance to fleece ridesharing customers in Annapolis. Rather than deregulate the taxi industry, Mayor Pantelides has elected to charge every ridesharing customer an additional $0.25 on every ride they take.

PURSUANT TO THE AUTHORITY OF AND SUBJECT TO THE TERMS OF SECTION 10-406 OF THE PUBLIC UTILITIES ARTICLE, COMMENCING ON JULY 1, 2016 AND CONTINUING UNTIL JUNE 30, 2017, A FEE OF $0.25 SHALL BE ASSESSED FOR EACH TRIP GENERATED BY A TRANSPORTATION NETWORK SERVICE COMPANY ORIGINATING IN THE CITY OF ANNAPOLIS.  THIS FEE SHALL BE SET FORTH IN THE ANNUAL FEES SCHEDULE AND IS SUBJECT TO AMENDMENT.

In May, Maryland state passed a bill which granted Maryland counties and municipalities the power to tax transportation network companies (TNCs). The $0.25 per ride tax is the maximum amount Mayor Pantelides is authorized to extract.

The state bill details the flow of new tax revenue generated from TNCs. First, the state authorizes counties and municipalities to levy a tax on every completed ride. TNCs are required to collect the tax from their drivers and submit to the state comptroller “the assessments and other revenues collected by the transportation network company on behalf of the transportation network operators"

“Assessment” is defined earlier in the bill as “A charge imposed by a local jurisdiction on each transportation network service."

The tax revenues are gathered from all Maryland municipalities and counties into one “Transportation Network Fund” operated by the state treasurer. The fund is then redistributed from the state back to the municipalities and counties where the ride took place. The bill does not specify any further where the funds are to be spent. In order to ensure compliance, the state is granted the power to inspect TNC’s records once per year.

Mayor Pantelides’ proposal takes cash out of customers’ pockets and redirects it through a maze of government bureaucracy and back into his own municipality’s hands, while failing to disclose how that money will be spent. City officials claim they are trying to level the playing field between taxis and TNCs. If that were the case they would deregulate the taxi industry, rather than extort ride sharing customers for $0.25 on every ride they take.

Mayor Pantelides proposal is on the agenda for tonight’s City Council meeting at 7pm. 


Cato’s Matthew Feeney Explains the Importance of Middlemen in the Sharing Economy

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Posted by Dennis Cakert on Monday, February 1st, 2016, 1:05 PM PERMALINK

In his most recent Forbes column, Matthew Feeney, policy analyst at the Cato Institute, explains how the sharing economy contributes value by lowering transaction costs, not by transporting or lodging people.

Feeney begins with an anecdote about trade between prisoners in a POW camp. Each prisoner values the goods in a Red Cross care package differently. When care packages arrive, the prisoners who know the likes and dislikes of their fellow inmates help to facilitate trade, earning the name “middlemen.” The value the middlemen contribute is the knowledge they possess, for which they charge a fee.

The sharing economy contributes value in a similar way:

Uber and Airbnb do not own cars and hotels. Rather, they are profiting from what they know about consumers and dead capital. Before the rise of Uber there were many people who needed rides but were unable to efficiently contact nearby strangers who would be willing to give them a ride in exchange for a fee. In a similar fashion, Airbnb connects travelers in strange cities to the hundreds of nearby homeowners who have spare bedrooms.”

To regulate the sharing economy as a transportation or lodging business is a mistake. They are not in the business of transporting or lodging people, they are in the business of connecting people who wish to transport or lodge others. Hence the name “Peer to Peer” service.

It might strike many readers as bemusing that companies that merely trade in information can be valued at billions of dollars. Like some POWs critics of middlemen regard Uber’s and Airbnb’s profits not as “reward for labour, but as a result of sharp practices.” Not too long ago a friend of my family remarked that he didn’t understand why Uber was worth so much money when it doesn’t “make anything.” Unfortunately, many people remain skeptical or ignorant of the fact that the total welfare within a group can dramatically increase without an increase in available goods. All that is needed is voluntary exchange.

Using another example, Feeney cites how the sharing economy service “Klink” delivers alcohol for residents in Washington, D.C. Unfortunately, because of strict alcohol regulations, the service is currently barred from competition in Virginia.

Clearly, people are willing to pay for lowered transaction costs, and we should expect that trend to continue and for more companies to seize the kind of opportunities the founders of Uber and Airbnb saw years ago. But it shouldn’t be a surprise if suspicion of middlemen as well as anti-competitive market incumbents hamper the spread of this revolution, if only temporarily.”


R Street Institute Grades 50 US Cities on Transportation Regulations

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Posted by Dennis Cakert on Wednesday, January 27th, 2016, 10:01 AM PERMALINK

In R Street Institute’s new study “Ridescore 2015: Hired Driver Rules in U.S. Cities” researchers Andrew Moylan and Zach Graves evaluate the regulatory environments for vehicle-for-hire services in 50 of the largest U.S. cities. The study is the first to compare different policies following the emergence of transportation network companies (TNCs) such as Uber and Lyft.  

Despite some cities originally adopting a “ban first, ask questions later strategy”, the findings in Ridescore 2015 point towards “consistent, albeit modest, improvement. Of the 50 cities in our analysis, 29 improved their scores this year, while only one earned a significant double digit drop.”

A city earns a score between 0-100 based on how it regulates TNCs, taxis and limo services:

“When all three subgrades are combined, it yields an overall ‘Ridescore’ for each city that approximates the friendliness of its transportation regulation. Forty percent of this score is derived from a city’s treatment of TNCs, 40 percent from its approach to taxi regulation, and 20 percent from its limo rules”

TNC regulations are judged based on answers to the following three questions:

           1) Can TNCs operate legally within the city?

           2) How hostile is the city’s regulatory framework for TNCs?

           3) Are the city’s insurance requirements disproportionately high?

30 out of 50 cities improved their TNC score “owing to the proliferation of largely reasonable ridesharing bills across the country” leading the researchers to say “it’s not unreasonable to project that every state will have a statute on the books by the end of 2016.”

Seattle is the only city to decrease its TNC score by double digits:

“The city that saw the biggest drop in its TNC-friendliness score was Seattle, which fell 17 points from 100.0 to 83.0. The Emerald City was a success story last year… Unfortunately, that success was undermined this year with the city’s subsequent imposition of a questionable “knowledge test” for TNC drivers, new fees on all TNC rides, and a nascent effort to unionize drivers for the first time. Combined with the city’s previous efforts (later vacated) to cap the total number of TNC drivers to just 150 (in a city with a population of more than 650,000) Seattle received a 15-point deduction for hostility… Seattle’s final score put them 38th nationwide in TNC friendliness, after placing first last year.”

In contrast, regulations for taxis remained almost completely unchanged:

“Unfortunately, successful efforts to craft and implement appropriate TNC regulations across the country have not, to date, generally been accompanied by commensurate efforts to liberalize the often-onerous rules governing taxi markets. Cities’ median score for taxi friendliness in this year’s report was 75.0, nearly unchanged from the 74.7 we recorded last year.”

The same is true for limos:

“Much as in the taxi-friendliness category, the picture of limo friendliness is little changed from last year. In 22 cities, there was no change in score, while six others saw changes of less than one full point. Another 19 cities saw modest movements of less than 10 points, generally reflecting small changes on two components that measure insurance requirements. As a result, both the average score and standard deviation are essentially unchanged from 2014.”

The study is an invaluable resource for tracking nationwide responses to the emergence of ridesharing platforms.  The researchers hope the analysis can “provide state, county and city lawmakers with a road map to a system of simple, fair and modest regulation that will allow transportation services of all types, including those not yet envisioned, to flourish.”


Mercatus Study Shows Sharing Economy Promotes Economic Inclusion

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Posted by Dennis Cakert on Monday, January 25th, 2016, 12:46 PM PERMALINK

Christopher Koopman, research fellow at The Mercatus Center at George Mason University, demonstrates in his study “Evaluating the Growth of the 1099 Workforce” how the sharing economy is key to promoting economic inclusion.

Using employment data from the IRS for the past 20 years, Koopman shows the rise in independent contractors predates the creation of sharing economy giants Uber, Lyft and Airbnb by at least eight years. Rather than view the sharing economy as the cause of the rise in independent contracting, the data shows that the weakening of the labor market over the past few decades has created a supply of people looking for additional means of income. Uber, Lyft, Airbnb and other sharing platforms are providing flexible, alternative opportunities for people who need it the most:

“We should view the rise of the sharing economy as a natural consequence of more fundamental changes in the labor market, and should count that as one of the many ways that the sharing economy is creating value. As traditional labor market dynamism wanes, firms and workers have adopted more flexible, nontraditional work arrangements as a response. Insofar as sharing-economy firms provide innovative and efficient ways to implement and manage those nontraditional arrangements, they are promoting economic inclusion for workers who now find fewer opportunities in the traditional labor market.”

This study and the rest of Koopman's invaluable research on the sharing economy can be found at http://mercatus.org/christopher-koopman

 


Rahm Emanuel Threatens Airbnb Hosts with Jail Time

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Posted by Dennis Cakert on Thursday, January 21st, 2016, 3:38 PM PERMALINK

Chicago Mayor Rahm Emanuel has proposed a series of tyrannical regulations on local residents using peer to peer housing platforms such as Airbnb or VRBO. 

Alderman Joe Moore joined Mayor Emanuel, along with Alderman Ameya Pawar, in proposing the Shared Housing Ordinance. On Moore’s website, he claims “Under the proposal, hosts will be required to register their units with the city through a free and simple online process.”

But the regulations are far from free and simple: “No person shall engage in the business of short term residential rental intermediary without first having obtained a license,” which requires submitting contact information, proof of insurance, a written plan for complying with the regulations and “any other information that the commissioner may reasonably require in connection with issuance or renewal of the license.”

The licensee is then responsible for “all applicable federal, state and local laws and regulations regarding collection and payment of taxes, including hotel accommodation taxes” and for any criminal activity “of the guests, or of the invitees of the guests, or to acts otherwise involving circumstances having a nexus to the operation of the short term residential rental while rented to a guest.”

Chicagoans who run afoul of the crush of proposed regulations in the 17-page document face up to six months in jail:

“In addition to any other penalty provided by law, any person who violates this section or any rule promulgated thereunder shall be subject to a fine of not less than $1,500 nor more than $3,000 for each offense, or incarceration for a period not to exceed six months, or both. Each day that a violation continues shall constitute a separate and distinct offense.”

Not exactly free and simple. 


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