Tuesday, December 3, 2013

New cab alternative, Lyft, launching in Nashville. Will Nashville permit it?

From The Tennessean:

 The pink carstaches could soon be coming to Nashville roadways.

Lyft, an on-demand ride sharing company based in San Francisco, is launching in Nashville on Friday, according to company spokeswoman Paige Thelen. The company has been cultivating a fleet of drivers in recent weeks, generating interest through social media outlets, word of mouth and placing ads on Facebook.
A proposed bill, up for first reading Tuesday, would reduce the $45 minimum fee for vehicles for hire to a rate that is three times the cab rate, reducing the minimum to $9.75, and would allow for certain kinds of technology to be used to hire a car service, according to Metro Council Member Ronnie Steine. The bill will then go before a committee meeting and a second reading, during which changes to the proposal can be made. (link)
Watch this. It should be interesting. The current $45 minimum was put in place a few years ago to protect the large luxury limo companies from competition when "Black sedans" made there appearance in Nashville.  Black Sedans are luxury cars, such as Lincoln Town Cars, that are clean, no markings to indicate they are a vehicle for hire, with courteous, uniformed drivers. They are usually black but do not have to be. Black sedans were only charging a $25 fee for a typical ride and were undercutting the luxury limo services. The black sedans were much nicer than a taxi cab, but were not as ostentatious as a stretch limousine.  The limo companies went all out to put this new form of transportation out of business. They got the Metro Council to pass a new law forcing the black sedans to charge a minimum fee of $45 and imposed various other restriction on them, to force them to operate like a limo company.  The city also engaged in a program of harassment and intimidation of Black Sedan drivers.

Nashville has also had a history of restricting new cab companies from entering the market and it was only after a lengthy battle that a new cab company was allowed to do so. This cab company was owned by the actual cab drivers, which was a departure from the typical Nashville cab company model.  The existing cab companies fought this new company.  Nashville has a terrible, embarrassing record of prohibiting competition, stifling transportation innovation, and protecting existing companies from competition. Now, with the massive new convention center up and running, city business leaders in the tourism industry realize Nashville needs new kinds of transportation services and more pubic transportation. Still, the established transportation providers are resisting.

I would prefer that the city have no minimum fare for a provider of transportation services but a ten dollar minimum is a great improvement over a $45 minimum. I doubt anyone would provide a black sedan ride or a "lyft" for less than $10 anyway, so a $10 minimum would have very little impact on restricting these new services. While I still need to know more, this looks like a very positive move. I expect there to be a lot of arm twisting and debate on this issue. I see few principled opponents of price-fixing in the Metro Council and very little support for the concept of a free market economy, so this will be determined by who has the most influence with the Council.

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1 comment:

  1. Before I bid you a a relaxing and fun filled weekend, I wanted to tell my fellow Bostonians about a safe livery option that is making a name for itself, Lyft that is. first uber ride free