The reason we require insurance coverage for cabs is that we had many accidents in which people were severely injured, including pedestrians who never contracted with the cab driver, and it turned out that the cab driver didn't have enough insurance to cover them.
Which is why Uber now provides a $1M policy covering all of their drivers. Does that address that issue?
Not quite. Cities have established local insurance requirements, and they require cab drivers to provide certain standards of proof that they meet the requirements. For example, NYC has a certain standard policy that all cab drivers have to buy. They get a certificate, with an expiration date, to demonstrate that they've bought that policy.
In NYC Uber could meet that requirement by hiring only licensed cab drivers with that insurance certificate, which I think they do. Otherwise, there's no assurance that they have equivalent coverage, and they probably don't. They could say they have equivalent coverage, but how do we know?
For example, as I recall the case, an Uber driver in California killed a child, and Uber said they had no liability because the driver wasn't carrying a passenger or picking up a passenger, he was waiting for a call. Company lawyers always come up with things like that. Then, as a result of the bad publicity, Uber decided to cover it after all.
The purpose of auto liability insurance is to make sure injured people are compensated under all reasonably forseeable circumstances, and one of the reasons we have insurance regulators is to examine those policies and make sure they do cover them.
New York City personal injury lawyers can tell you of lots of cases in which a taxi horribly injured a passenger or a pedestrian, the cost of medical expenses alone exceeded its $100,000 liability policy, the driver didn't have assets to cover it, and went bankrupt, or went back to Pakistan or the Dominican Republic. They can tell you about insurance companies where somebody committed fraud and they didn't have enough assets to cover their claims. The reason we have regulations is to make sure that people who are injured by others will get compensation.
In the U.S., insurance is complicated, because every state, and every jurisdiction, has its own requirements. That's the price we pay for local choice. (The alternative is a national dictator.) Uber probably can't come up with one national insurance policy that will satisfy the requirements of every jurisdiction. (Hertz has a large insurance department, and a large litigation department.) Uber can't just say, "Oh, we're transformational, we'll just ignore local laws and do it our own way." Driving people from A to B is easy. Convincing local jurisdictions that you meet their insurance and other requirements is the hard part.
The reason we require a hack license is that, among other things, we want cab drivers to go through a police check to make sure they haven't committed crimes in the past.
Okay, but is there any evidence that actually accomplishes anything? Assuming that there is, and that it's useful, then why not just require a background check?
Evidence, in the way that in medicine we have randomized controlled trials to prove that lowering blood pressure saves lives? No, but we seldom have that kind of evidence in public policy. (Or even in medicine.) It seems reasonable that if we put people in jail for robbing grocery stores, they'll be less likely to rob grocery stores, but there's no randomized trials to prove it. It isn't perfect, but it seems reasonable, and we have to do something to keep crime as low as possible, so we do it.
I am often reminded of the way women are concerned about safety. There are several cases in the newspapers which a woman took a cab (or an unlicensed ride) home from a bar because she was drunk, and was sexually assaulted. I guarantee you that women overwhelmingly don't want to take a chance on getting a driver who served time in jail for a violent crime, and women want their drivers to have criminal background checks. Their everyday experience is enough evidence for them. Lawmakers know it, and they provide regulations to accommodate them.
Uber claims they screen their drivers but it's up to them to convince us that they screen them as well as the hack bureau does.
Is there any evidence their screening is inadequate?
A quick Google search for "uber drivers criminal" will turn up evidence. http://www.nbclosangeles.com/n... http://pando.com/2014/01/06/ex...
But that's not the point. Who has the burden of proof? Do I as a passenger have to prove that when Uber takes over the market, they won't be as safe? Or does Uber have to prove that they're as safe before they take over the market? There's a principle in science that the burden of proof is on the innovator. I think that applies here. At any rate, that's what most legislatures are going to say.
And what about a medallion? Bonding? And is race discrimination a problem at Uber or Lyft (or in any cab company these days)?
Bonding is part of insurance. There's a good reason for it.
There is a good reason and a bad reason for a medallion. The experience is that when anybody can set himself up as a cab driver, the streets become blocked with traffic (like India), and no one can get through the traffic jams. The streets are built by the government, and whether they like it or not, governments have to regulate traffic. So good reason is that they have a right to restrict the number of medallions to keep the streets usable. The bad reason is that cab drivers, like barbers, want to limit competition. But is it a good public policy to throw open the cab driving business to any anyone in the world who can buy a plane ticket to New York and is willing to work for $4 an hour? I'm not prepared to say yes.
One of the ongoing problems with street cabs is that they often don't pick up black passengers. (Although I know a black woman who always takes a cab home to Brooklyn in the evening.) Uber may have an advantage there. They may have an advantage in making it more difficult for an anonymous passenger to rob them. I'd be interested in any evidence.
I do have to give you that you're the first to even attempt to dig into the underlying issues, though. Kudos for that.
Well thank you. One can sometimes find a rational discussion on the Internet, although it takes some searching.
I'm trying to make a more rational world, although most of the time it seems like an impossible task.