The Uber Perplexing Virginia DMV

It wasn't until I started turning into a political junkie during the 2000 Presidential Primaries that my media diet switched from cartoons and music to Fox News and talk radio (I was an old man trapped in a 12 year old's body). Lucky for me this was encouraged by my parents who while I was growing up always let me watch the news and read the Boston Globe in the morning before school. One day while winding down with Hannity and Colmes I made a comment to my dad about how it was astonishing that they let these two men go at it when Hannity clearly bested Colmes each and every night. My dad turned to me and said "Well that's true, but you should know that if someone told them they had to switch sides that Hannity would be able to argue Colmes' points as well as Colmes can and vice-versa." I thought about that for sometime and realized that this obviously has to be true, not because they are acting out a script (they are not) but because it is impossible for you to have an unshakable confidence in your own beliefs without knowing the ins and outs of what the other side preaches. It is the same reason sports team scout their opponents and so I soon added left wing news sources to my media diet so I could learn the ways of the progressive movement so that when the time came I would know how to effectively and efficiently dismantle these arguments (have I mentioned I am not good at making friends?)

Now, why did I tell that story? Because I genuinely have no idea what the rationale behind this decision could possibly be:

Earlier this year, Virginia officials slapped the app-based services with more than $35,000 in civil penalties for operating with out proper permits. On Thursday, Richard D. Holcomb, commissioner of the Virginia Department of Motor Vehicles, sent a cease and desist letter to both companies.

“I am once again making clear that Uber must cease and desist operating in Virginia until it obtains proper authority,” Holcomb said in the letter.

In an attempt to find out what is really behind this I came across a nice blog post on Reason which linked to an article at the Virginian-Pilot that contained this factoid:

The DMV had already issued civil penalties against the companies in April -- $26,000 for Uber and $9,000 for Lyft -- for trips that their drivers provided in Virginia despite warnings by the state agency that Virginia law does not allow their business model....

The DMV is studying Virginia’s motor carrier laws with an eye toward legislative changes next year that could allow Lyft and Uber to legally operate in the state. Secretary of Transportation Aubrey Layne said last week that he liked the companies’ business models, but until the law is changed, they are violating it.

As the author of the post, Brian Doherty, neatly sums up, instead of these companies investing in themselves they should be greasing the wheels of the Virginia state legislature. In fewer words, it sounds like Aubrey Layne is in search of a quid pro quo.

But back to my original point of not understanding the logic behind the ban. The issue seems to be that because the business models of Uber and Lyft are new and regulators have not adapted as fast as the private sector (shocking, I know) that until Virginia can find a way to make more money off these companies they will just fine them into submission. This leaves me with a few questions.

1. How is Uber any different than me repaying a co-worker who picks me up on the way to work with a case of beer each week or gas money?

2. How is Uber any different than a taxi other than one has a medallion and one has more spacious seating a complementary water?

3 (and this is really the philosophical argument that this hinges on) - Why is it Virginia's business to regulate a contract between two consenting parties?

With regards to the first question, there is no difference other than I am more familiar with my co-worker. There's no clear reason why I should trust my coworker more than an Uber driver and the likelihood of being in an accident is no greater in a Uber car than it is with your co-worker.

The second question is an important one. How is a taxi better regulated than Uber? Do the cars have to go through the same inspection process? Yes, they do. In fact, since Uber drivers own their car and pay for their own insurance they have a much more invested interest in keeping their vehicle in the best condition it can be in while a taxi driver tends to drive for a company and may use different cars from time to time. Again, they all have to go through the same inspection process each year.

The third point is where this gets murky as I will admit I do not agree that all contracts between two consenting adults should be legal and out in the open (the only ones I am truly against are prostitution and euthanasia). But this question ties back into question one, which is how is Uber or Lyft any different than getting a ride from a buddy? Uber offers me a service, we agree on the price, and the service is then carried out. End of story.

It is not that I don't see the point behind all government regulation, though I disagree with 90% of it. I understand why having health inspectors investigate restaurants may be in the interest of public health (though I think the market could take care of this with either a private company doing the inspections or by having no one do them and the restaurants that are dirty and make people sick will go out of business) and I even understand why governments inspect cars (like food providers, this is a public safety concern, though I have my qualms about this as well), but I have no idea what the Virginia DMV's argument is in this case other than they want their kickback.

In an era where people carry around phones which have more computing power than Apollo 11 we should expect innovation to rapidly outpace legislation and hopefully because of this more people will come to see that when the government stays out of the way society does a pretty good job of taking care of itself.