Uber is a technology platform which connects riders and drivers around the world. They process as many rides in China as the rest of the world combined.
Like many technology companies they regularly update their ‘app’ for both riders and drivers — to add new features (like splitting a fare with someone else, add a new kind of service like grocery — or kitten — delivery, improve geolocation services).
The DeBlasio administration in New York City, through its Taxi and Limousine Commission, had planned to require that Uber (and Lyft, and other similar services) receive regulatory approve in advance each time they wanted to update their app.
They’ve dropped that plan, although they still intend to exercise veto rights over the technology the world uses to interact with the global ridesharing service. They require notice to the Commission every time there’s an app update, and:
“We can still review their application change after the fact,” said Allan Fromberg, TLC spokesman. “If we see a problem we can still advise them and insist that they make any necessary changes.”
This seems on face absurd – even if there’s a compelling interest in spelling out the terms under which a business is allowed the favor of operating (as many view it) in a jurisdiction the notion of approving user interface changes falling on politically appointed New York bureaucrats is perverse.
They backed off, and my first thought was that they want to seem just crazy enough to do something like that so that whatever rules they settle on appear reasonable by contrast.
The role they’re attempting to play here, though, is actually interesting to model.
- Some jurisdications, like New York City and California may be big enough that Uber acquiesces. They could become de facto regulators of what the rest of the world uses.
- We’re beginning to see regulatory competition to play this role. Each jurisdiction imposes its own costs on the businesses, and there’s a game of chicken to see how far a given company will go before they exit that market. Smaller jurisdictions won’t have a role to play because an Uber or other company will leave. California and New York represent enough revenue that companies acquiesce.
- But under this model it’s actually China that wins the regulatory war, decisions they make following a Taxi and Limousine Commission model, would dictate how the business operates and interacts with consumers and drivers. Because the biggest market is China.
It’s very interesting times as we interact with new technologies — and our regulators learn what role they’re able to wrangle in a globalized economy.