Lyft, The Taxicab Commission, And The Level Playing Field

Lyft, a ride share app, has caused quite the stir in Saint Louis. Because Lyft passengers make donations, not set payments, to drivers, the company does not believe the Metropolitan Taxicab Commission (MTC) has the authority to regulate its operations the same way it regulates cab service. MTC and the City of Saint Louis think differently. The MTC has filed and won an injunction against Lyft to halt its Saint Louis operations.

MTC officials claim Lyft is not competing with cabs on a level playing field and that its unregulated drivers endanger public safety. However, Lyft drivers have to pass background checks, have vehicle inspections, and carry insurance (MTC requires cabs to have $200,000 of insurance while Lyft requires $1,000,000). If it is true that cabs are disadvantaged when competing with Lyft, it may have something to do with the competition stifling regulations that the MTC itself imposes. Just a few of these include:

• To receive a license, a person or company requires a Certificate of Convenience and Necessity (CCN). This means the MTC (where existing cab companies are represented) can decide whether the demands of the public require the additional cab service. They also can decide that more cabs will increase traffic congestion or parking demand too much to grant a CCN.
• A CCN holder must have and maintain a non-residential office address, telephone, and email. The phones must be answered at all times of the day. (Obviously, this essentially prohibits most individuals from obtaining a CCN.)
• If someone meets the first two hurdles, it does not matter because the MTC has issued a moratorium on applications for CCNs for airport taxis, on-call taxis, and premium sedans until a study on demand is completed.
• Drivers have to pass MTC-approved courses, in addition to obtaining a state chauffeur license.
• A for-hire car either can be an airport cab, an on-call cab, a handicap-accessible vehicle, a non-emergency medical transport vehicle, or premium sedan. A car cannot receive more than one type of registration or perform the activities allowed by more than one type.
• Cabs must use taxi meters with set fare maximums.
• Cabs can be no older than nine years and will not receive a permit if they are older than six model years.
• Drivers must wear a uniform (black baseball caps, no writing on it, bill forward).

If Lyft is allowed to operate in the Saint Louis area, traditional cab drivers may find it difficult to compete. But the answer to that problem is to eliminate the ability of the MTC to control entry, restrict how cabs operate, and set prices. That would put Lyft and traditional cab companies on a level playing field and provide more options to Saint Louis residents, if that is truly what the MTC wishes to accomplish. But we all know that the taxi commission, which is dominated by the larger taxi companies, is far more about limiting competition than actually protecting consumers.