Illegal Car Services A Growing Problem

Citing public safety worries, cities and states debate "rogue" services

BOSTON--Aug. 16, 2012: Citing public safety concerns, city and state governments are increasing scrutiny of the burgeoning industry of illegal and unregulated car services.

Many of the grey area services are marketed to consumers through personal technology applications via smartphones and tablet devices, such as Uber and ZoneRide, and conduct significant hackney-related commerce in cities without public safety and consumer protection oversight.

"No one likes regulations but we have to work under a broad set of safety requirements that have evolved over decades of operation and are intended to protect the passengers and drivers," said Oleg Uritsky, a spokesman for Fleet owners in Boston. "Technology companies have recently found ways to bypass those rules and the result is a growing number of unlicensed cars that are operating with no accountability."

The technology companies employ no drivers and own no cars but instead market their software and applications to independent drivers who aren't subject to rigorous bi-annual safety inspections and rules regarding fuel efficiency, pollution standards and criminal background checks. Moreover, they regularly garage the vehicles outside city limits to escape applicable excise taxes and other fees. They also are free to charge consumers whatever they want and frequently jack up fares during rush hour, holidays and other busy periods using uninspected and unapproved meter-like devices.

Officials say they are most concerned about the physical safety of both passengers and drivers, noting there are no requirements for partitions or emergency buttons in the unlicensed vehicles. There are no GPS requirements to record the exact location of a vehicle during an emergency and no ID or consumer contact information requirements.

Earlier this year two Boston cab drivers were violently assaulted, one severely stabbed and the other robbed with his car hijacked and crashed. Without necessary oversight, riders and drivers are left totally unprotected from potential criminal activity.

Transportation experts insist that both cities and states have jurisdiction powers over these rogue car hire services and have urged them to require they be licensed, regularly inspected, and comply with all applicable safety requirements.

A recent report issued by the former commissioner of the New York City Taxi and Limousine Commission, Mathew W. Daus, said, "Smartphone applications--without oversight are dangerous to the riding public and to the confidence the public has in the regulators responsible for these services." In the report, titled "Rogue Smartphone Applications for Taxicabs and Limousines: Innovation or Unfair Competition? A National Regulatory Review of Safety, Accountability and Consumer Protection Legal Issues, Daus concluded that "regulators should be proactive in understanding smartphone application operations and take steps to ensure the regulatory scheme in each jurisdiction accounts for third-party transportation applications."

While consumers may find some temporary advantages that these companies have exploited, their innovations may simply illustrate how the industry can improve its services within the current system rather than unleashing a free-for-all that will benefit no one and ultimately prove dangerous.