Yesterday Uber launched its ridesharing service, UberX, in four cities in South Carolina, offering residents of Charleston, Greenville, Columbia, and Myrtle Beach five free UberX rides each until July 24th. Unfortunately, the San Francisco-based technology company’s move into South Carolina could lead to conflicts with Palmetto State regulators.
According to reporting from Charleston’s newspaper, The Post and Courier, the executive director of the SC Office of Regulatory Staff believes that the main issue is whether the Uber business model would fall under the jurisdiction of the Public Service Commission’s regulatory authority. The Post and Courier mentioned that a taxi company in Charleston has developed its own smartphone app to compete with Uber. However, instead of just trying to offer a better rival service, the company, Yellow Cab of Charleston, is one of several taxi companies in South Carolina that are reportedly discussing calling for legislative action against Uber.
Lyft, which does not currently operate in South Carolina, announced this week that it would begin operating in New York City despite not having permission from the city’s Taxi and Limo Commission (TLC). Uber is now licensed by the TLC, although like Lyft it did not have TLC approval when it launched in NYC.
Companies in the so-called “sharing economy” do not fit well into existing regulatory frameworks. While Uber and Lyft are competitors to traditional taxi services, they are not taxi companies. Rather, they are technology companies that reduce the transaction costs of a familiar task (giving rides for money). It should not be surprising that existing regulations cannot keep up with such changes in technology.
It remains to be seen how regulators and taxi companies respond to Uber’s expansion into South Carolina. Regulators and lawmakers should consider removing already existing regulations in order to allow for Uber and taxis to compete in a fair and free market. Unfortunately, the history of Uber’s expansion is full of examples of regulators favoring out-of-date legislation over the necessary pro-consumer reforms.