Sharing economy companies are no strangers to regulatory troubles. There’s a long laundry list of examples of City Hall trying to put the clamp on these companies, from Airbnb’s legality being questioned in New York to RelayRides being banned in New York State to FlightCar being sued by the city of San Francisco.
A few transportation tech companies – RelayRides, Lyft, SideCar, and Flywheel — came together at a panel today during the Glimpse conference in San Francisco to discuss, among other things, how they are dealing with those regulatory issues.
“It’s been a challenge,” said SideCar CEO Sunil Paul.
Perhaps it was the safe answer to the question, but the companies said that they could win over regulators by touting their ability to make public transportation safer. Paul cited user feedback that says 71 percent of his customers feel safer in a SideCar than using standard taxis. He also notes that the core of users are women in their 20s. After all, providing your identity and credit card info and knowing your driver’s identity makes all parties more accountable, as opposed to an anonymous cab ride. Lyft CEO Logan Green adds that his company does criminal and background checks (though traditional cab companies do that too.) And RelayRides CEO Andre Haddad says that no one with a serious violation is allowed to register as a driver on his company’s car-sharing platform.
Of course, the big regulatory concern for the ride-sharing companies has been in letting non-professional drivers chauffeur customers around. Green says that his company has strict qualifications as well. “I think you create a lot of trust by having a high bar,” he said.
Despite the rocky relationship the companies have had with regulators – Lyft and SideCar were fined $20,000 each last year by the California Public Utilities Commission, though those penalties have since been cleared up, and RelayRides has been accused to violating insurance law – the companies insisted that that they have good relationships with City Hall. “Regulators are excited,” said Green. “They just need to make sure it’s safe.”
Paul said one of the best arguments for the companies’ businesses is how much they offer in insurance, saying that the $1 million in coverage is more generous than traditional transportation companies. “Insurance is the unsung hero of this world,” he said. That might be the case, but it’s also been a troublesome spot for RelayRides and other car-sharing companies, which have been denounced by many large insurance companies.
Regulations aside, an even more basic issue may be getting mainstream traction. “20 percent of people that have taken a taxi haven’t heard of any of us,” Paul said.