Lyft and Uber drivers should have to follow the same not-free regs as taxi drivers. things like displaying a hack lic, certification of insurance or bonding, and penalties for systematic race discrimination are things that taxi drivers and their companies are required to follow. Undercutting these is not a good idea.
Uber's insurance is explained here, and its legalese can be found here. I haven't looked for Lyft's policy, but I assume that Lyft's policy can be just as easily found.
penalties for systematic race discrimination are things that taxi drivers and their companies are required to follow.
And yet despite all those penalties, racial discrimination still happens systematically during peak hours. During peak hours, taxi drivers can easily pretend not to have seen someone hailing them down if they know they can easily pick up someone else just as easily.
And in a way, Uber and Lyft's processes nicely solve that problem, since for them, they're not allowed to pick up people who are hailing them visually. They can only pick up the people that have hailed them electronically through a mobile app. So choosing your customer based on skin color is much less of a possibility for Uber and Lyft drivers, because now there is an electronic paper trail if a driver suddenly decides not to pick up a potential customer he has agreed to pick up electronically.
The electronic process of ordering rides through a mobile app also solves the problem of displaying a license. By ordering a ride through Uber, you see the picture, you see the id, and you see the rating of who's going pick you up before they do pick you up. Just try to get that level of information the next time you call for a Yellow cab, you won't get it.
Not only that but in a few big cities, where the number of medaillons stays stagnant despite the desperate need of additional taxis on the road during peak hours, Uber and Lyft are serving the needs of an underserved market. Because I can tell you, in my personal experience, it's not just black people that can't find a cab sometimes. As a white person who sometimes really needs a cab in San Francisco during peak hours, I've simply given up trying to find one. I can only assume that only customers from five star hotels and hot supermodels can catch cabs during those hours, because I see many cabs during those times, and I've used my phone to call cab companies as well, but those cabs are certainly not stopping for me, or they have the light on signaling that they're on their way to pick up someone else.
If I really need a car after work for some reason, I'll drive my car in, clogging up the system even more, and I'll risk paying insane parking fees for the entire day (despite the fact that I might only need the car for a fraction of that time, to go somewhere after 5 PM, that's not easily reached with public transportation).