If you don’t know what a Pandora box is, or in case you know what it is but can’t explain its actual idea easily, here’s a simple lid to open: Are ride-sharing apps just apps or meters in themselves? Or not?
Yes, there you have it. Unpleasant questions, unresolved doubts and tricky spots crawling out of the hitherto-neat box.
Once you open the box, it’s hard to wrestle with the flurry of things it exhales ferociously. It’s so tough to put the cover back in place. And whether it is South Africa, New York, Ireland, Bangalore, or Delhi – people, drivers, taxi-unions, and law-makers seem to be struggling with the exodus with equal confusion. As to the riders/consumers – the question itself is hanging loose.
The auto-rickshaws, taxis and cabs of the past had a lot of advantages and disadvantages, but they also had a visible meter right there. Often mounted and dismounted on controversies and fraud-allegations, but it was there – a sight of relief.
When technology turned a curve and disrupted this industry, it did so by empowering or complicating the space with GPS, smart-navigation and app-based calculations. The question was born then and there, and it grew into a phantom with every answer and protest that nourished it – so a taxi app is not a meter?
If it’s not, it gives the companies running it a lot of leeway into escaping the laws and expectations that were constructed for the taxi industry – Hey, why should I obey this rule, that’s not for me, that’s for a proper taxi, coz I am just a network company. I don’t own cars, or drivers. I just bring them all together.
But if it is a meter, then it makes matters more convoluted for law-makers. Should the same precepts be applied to these apps? How?
You might recall how the Delhi government spent a lot of effort and policy-think-tank into a draft transport policy. The idea was that app-based taxi services do not get away from the need of installing meters and actually end up falling in line with the government-prescribed fares.
To bring in transparency, digital meters with GPS and a fare setting were embedded in the draft policy too. The move was quite relevant at a time when the government wanted to address the big sore point of surge pricing that app-players had resorted to. Government could have thought – we allow you to charge less if you want to play the network-effect but not too much – at least not beyond a government ceiling.
Delhi transport rule-makers have company. If we look at the way the Karnataka government has been involved in this space since a long time, we will witness that taxi-aggregators have not had it any easier in India when it comes to leniency in regulations. Bangalore mandated digital meters, GPS, panic buttons to be equipped in cabs early on and brought in capping taxi fares at periodically-reviewed rates. Now, there is the South African government that is putting Uber taxis in a spot for operating without meter licences. Parts in the US, Paris and London have also been trying hard to figure out the law’s way and intent in this valley of confusion.
Vehicle Laws and Meters
In India, for instance, the question is that can a technology platform which brings together drivers and consumers, be regulated under India’s Motor Vehicles Act? The question is whether some of these app players have been right when they protest that they were wrongly categorised as an agent under Section 93 of the Motor Vehicles Act (as old as 1988 at that one)?
The Motor Vehicle (Amendment) Bill 2016 could be a good starting point.
It can bring under its fold all taxi aggregators and has proposed insertion of 28 new sections in the present Motor Vehicle Act which had 223 Sections. Among other areas, issues like last mile connectivity and public transport, automation and computerization and enabling online services have come into the scope of amendments.
We really need wipe out the confusion – is a GPS-powered app required to still have a digital meter?
Incidentally, Uber Africa had proposed a bill to that effect. It brought in the category of “transport network operator” for regulating drivers who used the Internet to solicit passengers. That one got rejected by the cabinet though.
And when the Licensed Taxi Drivers’ Association (LTDA), that represents licensed taxi drivers in London, wanted the courts to rule an app as a meter, the argument was that if a smartphone acts in precisely the way (time and distance calculation) a meter in a taxi acts, whys should it be spared the laws and rigor that a meter observes? The Licensed Private Hire Car Association (LPHCA) echoed this contention and added how an app was turning this argument into “an attempt to circumvent the statutory prohibition” that is on minicabs using meters.
Keep scratching your head
As you can smell, the box has just come all loose. Is an app a meter? If not, should such cabs have a meter?
The questions and doubts that fly out are going to be ruthless and relentless:
- Can platform companies have the same equipment requirements that radio-taxis, auto-rickshaws and normal taxis have?
- Can the fares be determined differently based on the 4 meter classification between Deluxe and Economy cabs?
- What do passengers prefer: Fare progression transparency or total cost?
- Can law-makers turn a deaf ear to surge pricing issues that aggregators without price ceilings may find themselves (and some are already) resorting to?
- If an app is not a direct connected meter how do we sort out the delay in calculation of the exact mileage, timing and computing the correct fare amount?
- What happens when the estimate of a trip’s cost that a user sees before getting in the car differs in a huge way with the final price – thanks to road conditions, traffic or weather?
- A different equipment-necessity would need an aggregator to invest in more computing and server resources for continuously calculating fares based on GPS movement and do that number-crunching. Why would they do that?
- Additional costs of meters – would the ride-hailing services be okay with that?
- Even if meters come by, can the years-old problem of rigging and manipulation be sorted? How would they align with the app algorithms that tell a driver how much to charge, a rider how much to pay and the automatic deductions from rider’s wallet?
- Like Anastasios Noulas, a data scientist at Lancaster University in the U.K surmised: Uber’s fares can be less than that of taxis, specially when it comes to longer trips that cost more than $35. Can app-players continue their premise of affordable commute if meters are made compulsory?
- But then, if no one or no-instrument is in place to keep an eye on these disruptors, what is the assurance that monopolistic market tendencies won’t be indulged into – if not now, then in future? Who would protect customers being charged inappropriately or without the transparency that a meter brings in?
- How can erstwhile taxis, rickshaws expect a competitive market and a level-playing field when they are forced to respect the meter fare rates and other regulations while app-players run on a free lane?
- What made a court ruling in the North Ireland too help enact a law hinting that taxis need a certified meter and receipt printer while an app company was not needed to do that because it used its own metering technology?
- Back to square one: If smartphones are allowed to be substituted as meters, would they be regulated as phones/as apps or as meters?
The pea-souper only gets denser with every next question that we think of. Governments, players and competitors have a tough task ahead whittling these bushes ahead.
Like the Pandora box, we may still count on the ‘hope’ that is still left inside. The one thing that never gets away.