June 16, 2014

Virginia Regulators Should Let Lyft and Uber Roll

Jerry Brito

Former Senior Research Fellow
Summary

Consider the “Red Flag Laws” of the late 19th century, which required early automobiles traveling on roads to be preceded by a man on foot waving a red flag in order to warn others on horses of the vehicle’s approach.

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Consider the “Red Flag Laws” of the late 19th century, which required early automobiles traveling on roads to be preceded by a man on foot waving a red flag in order to warn others on horses of the vehicle’s approach.

Today, most states require cars traveling on roads to have a human driver at the wheel—a regulation that to our descendants will sound just as preposterous as flag-waving does to us.

Yet how do we get from here to there? What is the government’s proper response when a new technological innovation obsoletes the very purpose of a law?

One approach is to prohibit the new technology until it can be squared with the law. No outright ban is necessary; the government just mindlessly enforces an obsoleted law until it is changed. This is the approach the Commonwealth of Virginia is now taking against ride-sharing apps Uber and Lyft.

Last week, Richard D. Holcomb, Commissioner of the Department of Motor Vehicles, sent letters to the companies instructing them to cease and desist all operations in Virginia until they obtain “proper authority.” Such proper authority doesn’t really mean a taxicab permit from the state, since Uber and Lyft are not really taxicab companies. Instead, proper authority will come when the legislature changes the law to accommodate the new technology.

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