Ridesharing startups hit with cease-and-desist by California regulator

Some relevant facts:

1) Ridesharing has been around for decades. There were high-tech phone-based ridesharing programs in the 90s. I don't think anyone claims the idea of sharing rides itself is new.

2) There are many ridesharing services including us (http://www.ridejoy.com), Zimride, and Carpooling.com, where drivers give passengers a ride to someplace the driver is already going.

Lyft (a new offshoot of Zimride) and Sidecar have appropriated/redefined "rideshare" because it sounds friendlier and less commercial than "car service". Uber doesn't use the word rideshare.

3) Having used both Lyft and Sidecar extensively, the fact that it's a commercial transaction doesn't change the fact that the experience with either one is generally as good as, sometimes much better than, actual taxicabs in SF. It's also a bit cheaper and you're more likely to actually get one. Hopefully the state just requires adequate protections instead of killing these very useful services.

I don't think that regulatory compliance is as simple as ensuring that drivers are competent and providing some means of recompense. That is merely the purpose of enforcement, not the mechanism. The mechanism is a great deal more complex, and involves multiple inspections: vehicle inspections, garage inspections, drive interviews, random audits, a good deal of compliance-related paperwork, etc.

It is an artifical cap that is deliberately intended to inflate prices above marginal costs, to ensure that market participants achieve sufficent revenue that they can actually afford the requirements (i.e., insurance, maintenance, etc.). Without that cap, taxi cab and charter car rates would drop to unprofitable levels as the influx of drivers would push rates to the floor. Cab and charter car service providers would skimp on costs, most likely maintenance and insurance, which would place passengers at risk. However, it is more likely that most cabs/charter cars would be independent cars.

It is also in place to minimize the level of market participants to maintain the feasibility of enforcement. It's possible to effectively enforce these regulations with a dozen or so companies with a handful of regulators. With hundreds of independent market participants, the sheer amount of work to conduct normal inspections or other enforcement activities would overwhelm the enforcement agency, requiring either substantial fee increases, tax increases, or roulette enforcement.

I drove a taxi a while back (not in SF) and I have to agree that a lot of taxis are extremely dubious in their level of safety. I only figured out after a spin-out that the company car I'd been assign had bald tires with uneven tire-pressure. And well, obviously I was inexperienced too or I might spotted that earlier but that's not uncommon.

But that is after all the regulations. With no regulation at all, things wind-up even diciers. Will you check the tire pressure of every car you get in?

The reason taxis are unsafe is because drivers and companies don't make much and try to extract every last dime from their rides and their cars and so-forth.

With more competition, less money to per drive and so-forth, I couldn't imagine how dodgy things will get.

I'd like to think I was pleasant and courteous. I doubt you can judge driver's skill by looking at his or her face so your eagerness to judge for yourself seems foolish.

I can believe Uber-now or Lyft-now looks good. Will you know when the safety goes out the window, considering there is constant pressure for that to happen?

Read what I wrote. I make no claims about my ability - I'm a far better hacker than I was a driver or the goodness or taxis in general.

Like I said, I can totally believe Lyft is better than taxi services now. But the thing about any purely private system is that everything they do is going to ultimately be a cost-benefit trade to them and everyone in the equation is going to be trying to figure out new ways of making money. Look at email, look at craiglist, look at AirBnb. The large large scale produces problems unlike small scale. If someone comes up with X scam that lets them profit from Lyft or whoever in a dangerous way, will Lyft be spending it's entire margin tracking that problem down. Maybe.

The only thing about government regulation is that the state has authority to be more invasive than a private entity can be and is not limited by a cost benefit analysis. Government regulation is inefficient but unfortunately haven't yet demonstrated an iron clad better way to make sure things like commercial driving, electrical and other infrastructure work remain safe. It's problematic but it would also be problematic to do a large experiment with the physical safety of people.