According to BuzzFeed, New York Attorney General Eric Schneiderman is weighing in against a newly-proposed rule that would require livery cab drivers to affiliate with one base and one base only. Schneiderman has written a letter to the TLC saying hat the proposed rules, as written, would unfairly limit competition. “From a competitive standpoint, these advances may lower the costs of entry for new for-hire vehicle services and encourage existing services to compete more effectively for both drivers and passengers.”
The proposed rule would, some fear, give Uber an insurmountable competitive advantage because a driver limited to one base would naturally ally with Uber, the market leader, because it has the most potential passengers using its app. The TLC would allow multiple affiliations if there was a formal agreement between bases allowing drivers affiliated with one to also affiliate with the the other.
But Schneiderman says this requirement would still unduly restrict the drivers. “Requiring agreements between competitors raises serious antitrust issues. Ultimately the proposed rule is likely to lead to market consolidation around a small number of the best-capitalized and most well-known services, whether large existing firms or well-financed newcomers. This market concentration will hurt consumers, who can expect fares to increase and service to decline. If this anticompetitive outcome followed from collusion in the industry, it would be illegal. It is no less disturbing as a product of regulatory action,” the letter reads.
Even Uber has opposed the rule, though it would supposedly benefit from it. The real losers, if the rule passes, are more likely to be livery drivers who may want to ally themselves with a neighborhood base and also sign on with Uber, Lyft or some other app-bases service to gain business when a business is slow at a local base.
The TLC likes the proposal because it would make the industry easier to regulate.
