In part one of our Intro to Ridesharing series, Zachary Pyers and Kenton Steele preview the series and discuss the origins of ridesharing and the rise in popularity of services such as Uber and Lyft.
Visit https://www.reminger.com/ for information about our legal services related to emerging technologies.
In part one of our Intro to Ridesharing series, Zachary Pyers and Kenton Steele preview the series and discuss the origins of ridesharing and the rise in popularity of services such as Uber and Lyft.
Visit https://www.reminger.com/ for information about our legal services related to emerging technologies.
ZBP
Welcome to the Reminger Report Podcast on Emerging Technologies. Reminger Co., L.P.A. is a full-service law firm with over 150 lawyers spread across 14 offices and serving states throughout the Midwest. My name is Zach Pyers, and I am a partner in Reminger’s Columbus office here in Ohio. I have been with the firm for approximately 14 years, practicing in civil defense litigation. I am currently also an adjunct faculty member at Capital University Law School where I teach a number of litigation-focused classes, the most recent of which was added to the curriculum was Ridesharing Litigation.
KHS
And I’m Kenton Steele, an associate in Reminger’s Columbus, Ohio office. In addition to my work in civil defense litigation, I am also an adjunct professor, along with Zach, at Capital University Law School, teaching a course in ridesharing litigation.
ZBP
I should add that Kenton and I recently published a book with the American Bar Association entitled Ridesharing Law and Litigation. We’re excited that this podcast on emerging technologies is going to be examining how changes in technology and business models affect our daily lives and how the law is adapting to respond to these changes. Exponential technology advances in the last two decades have transformed how we travel, how we do business and how we communicate. Nearly every part of our daily lives are revolving and changing to incorporate the benefits offered by these new technologies. And while in many ways, these new technologies offer convenience, they also create uncertainty. Are ridesharing services safe? Who is responsible if I buy a defective product from an online vendor? Who is responsible if I, for instance, how, how do we use new technologies, such as in-home speakers, and how do they implicate our privacy rights? Are cryptocurrencies the wave of the future or a passing fad? This podcast is going to explore these questions and others related to emerging technologies and hope to offer an insight into how the law is responding to these new issues arising in an increasingly technologically advanced world.
KHS
On today’s podcast, we’ll be beginning our discussion on ridesharing and the law related to ridesharing, and while most of us are familiar with ridesharing to some degree or another, this podcast is going to provide an in-depth look into the origins of ridesharing, how this type of business operates and the laws and regulations that impact ridesharing.
ZBP
Kenton, as we kind of jump into our first topic, I think a lot of people are going to be asking, is who should be listening to this podcast series, not only on emerging technologies but kind of more specifically, who should be listening to a podcast as it relates to the law and ridesharing companies?
KHS
Well, obviously, the information we’ll be providing is going to be useful to any attorneys who are asked to handle a case that involves ridesharing cases. Professionals in the insurance industry who are adjusting claims involving automobile accidents are likely to encounter ridesharing in one form or another, and additionally, policymakers who are changing the laws and regulations that impact how ridesharing companies operate and how those companies change mobility issues in cities across the U.S. But in addition to that, this podcast will provide information that’s useful to people in the automobile industry whose products are used in the ridesharing industry, and even broader than that, any individuals who utilize ridesharing services are obviously impacted by this information, but really, ridesharing has become so ubiquitous and its uses so widespread, not just to transport people, but food delivery, grocery delivery, prescription drug delivery, really everyone’s life is impacted by ridesharing whether they know it or not. I mean, simply, there are so many ridesharing drivers on the road at this point that anyone who is also on the road has the potential for their life to be impacted by ridesharing, ridesharing services and the law related to ridesharing, so ultimately, the information in this podcast is going to be useful to anyone.
ZBP
We use the term “ridesharing” and we throw it around a lot, and I know that for those industry insiders that may be listening, we also have heard the term frequently used of “transportation network companies” or “TNCs,” but as you and I use the term “ridesharing companies” to include some of the common household names that we talk as regarding, like, Uber and Lyft, help us, if you would, to define what is a ridesharing company.
KHS
Ridesharing, in its simplest definition, is a private person-to-person transportation service where riders are connected with individual drivers that use their own cars. What makes ridesharing unique, what separates it from a traditional taxi service or car service is that ridesharing rides are set up through the use of a smartphone app. To utilize these services, all that a rider needs is to download an application, create an account through the platform and then they’re able to hale a ride from a ridesharing driver.
ZBP
And how did ridesharing start?
KHS
Ridesharing, in the form that we know it today, is about 10 to 15 years old, but there have been forms of ridesharing that have existed for a very long time. I think that ridesharing as we know it can trace its roots back to the first taxi companies, and it’s really a takeoff of the way those companies were set up that led to the ridesharing companies that we see today.
ZBP
From a more technical perspective, when we talk about ridesharing, I know a lot of people think about the fact that they pull out their phone and then they get dropped off at the site. Explain to me if you would, as we break down the components of a ridesharing transaction.
KHS
Yeah, one thing that’ll be helpful to understanding the rest of this discussion is insight into how a ridesharing transaction can be broken down into different phases or stages which change sort of the legal technicalities and some of the other issues involved in ridesharing. Commonly a ridesharing transaction is split into three or four phases, and those phases are determined by what the driver is doing in relationship to their use of the ridesharing platform. So the first phase, which is known as Phase 0, is which a ridesharing driver has the app installed on their phone but they’re not currently using the app. The driver mode of the app is off, and the car is being used for personal use. The ridesharing transaction really starts at Phase 1, which is when the driver opens the application for the ridesharing service and the driver is waiting for a rider to hail a ride or to pair with them. The second phase of a ridesharing transaction, Phase 2, starts when the fare or request for a ride has been accepted by the driver and the driver is on their way to pick up the passenger or rider. That takes us to the final phase, Phase 3, and this phase begins when the driver is in their vehicle and picks up their passenger and begins taking them to their location. This third phase ends when the passenger or rider reaches the destination and leaves the vehicle.
ZBP
I know that as a lawyer speaking on topics of ridesharing, I often hear from non-lawyers who know that I’m involved in ridesharing litigation and the topic, is ridesharing safe?
KHS
The short answer is that, yes, ridesharing is generally safe and there is a lot of research and studies that have been done on the way ridesharing has impacted mobility and safety on the road, and these studies have come out a couple of different ways. On the one hand, we are certain that ridesharing has reduced incidents of drunk driving. It’s much easier for people to hail a ride when they need one. At the same time, there have been studies that have shown ridesharing is associated with an increase in car accidents in some larger cities. I know that there are also studies indicating that congestion can be increased in large cities when there is an uptick in ridesharing services, but by and large, utilizing a ridesharing service is perfectly safe, not any more dangerous than taking a car on your own. Now, Zach, to better understand how we got here, it might be useful to have some more information on when the modern iteration of ridesharing got started. Can you tell us about that?
ZBP
Absolutely. And so, one of the things that we’ll explore in some of our later episodes is a more kind of historic guide into ridesharing. When we kind of talk about both the history and the implications of ridesharing just in general as a population and the utilization of it as us in the U.S. as a population, but I think it’s important to note that when we talk about ridesharing in the modern version as we know it, one of the things that I think goes hand in hand with the ridesharing companies is internet access because most of the ridesharing companies that we know of today hinge on our ability to have internet access, and more importantly, mobile internet access. I remember a period of time, and I’m sure a lot of our listeners do, when our cell phones did not connect to the internet, right? And so one of the things that was important is that to have that mobile internet access, and so when we look back at the modern version of ridesharing, we see that people actually started to use the internet in the 1990s to match drivers and riders. Now, it’s not necessarily in the same sense as you and I might think about it today where I come out of a restaurant at night and I need to go to a hotel or my apartment or my house and I pop on and I request an Uber or a Lyft or some other ridesharing app, but what we saw is, we saw people who were getting a ride from New York to Boston, and so they would coordinate via the internet to match drivers and riders, and we saw this actually transpiring way back, not way back, but back in the 1990s. Now, you know, interestingly enough, as recently as 2006, the Federal Transportation Administration stated that next-day responsiveness had been achieved in internet ridesharing platforms but dynamic ride matching had not yet been successfully implemented, and so, as recently as 2006, the Federal Transportation Administration recognized that dynamic matching, meaning essentially almost immediate matching, was not yet available and it had not yet transpired, and so it wasn’t that long ago, roughly 15 years ago, that we saw that we were still in a position where we could do it next day but we weren’t able to do it dynamically, and so what we saw is we saw this kind of shift with the introduction of several of the well-known ridesharing companies that we talk about today.
KHS
And Zach, I’m sure all of us are familiar to one extent or another with some of the ridesharing companies that are in the marketplace. Can you tell us about when those companies really got their start and sort of entered mainstream awareness.
ZBP
Yeah, so we see, there’s a couple of names we use with relative frequency that I think people have heard a lot about, and so the two companies here in the United States that make up the vast majority of the market share are Uber and Lyft, and so when we look at those companies from a historical standpoint, Uber was founded in 2009, and so, kind of, again from a historical perspective, we see that from 2006, you fast forward three years, all of a sudden you have a company recognizing this inability to dynamically match riders and drivers and then trying to essentially fix or solve that problem, and so Uber came kind of on the scene, for lack of a better term, in 2009. We’ve got Sidecar, which was another ridesharing platform that came on in 2011 and then the other common one that we have heard of, Lyft, was 2012, and so by this point in time, in 2012, we’ve got the two major players that we recognize today, at least in the United States market, and I keep saying that because there’s a lot of foreign markets out there that have a lot of different ridesharing platforms, some of which are either owned in part or in whole or as joint ventures with Uber and/or Lyft, and some of which are fully on their own. But when we’re examining, since Kenton and I are U.S.-based lawyers, most of the focus of this as we talk about the companies, are on their role and impact in the United States, and so when we see those two companies being founded by 2012.
KHS
And at the time of the founding, I think something people may remember is that Uber, Lyft, these companies kind of showed up on the scene and were a relatively new and novel type of business, that it wasn’t something that regulators at local levels, at state level or the federal level really had seen before, and that led to a lot of quick development. Can you tell us a little bit about the history of regulations as it relates to ridesharing companies?
ZBP
Absolutely. You know, this is going to be one of the ongoing themes, I think, throughout this podcast, not just on, as we talk about or as it relates to ridesharing, but really just as it relates to emerging technologies. One of the things that we see at it relates to the law, right, is that with these emerging technologies, at times, there is a significant jump. There is exponential growth, and it kind of springs forward in such a quick format that we see the law kind of struggling to catch up. Now most of you, some of you may know this, most of you may know this, but there’s many aspects to the law, right. There’s regulations that are set by various regulating bodies, right, whether those are Public Utilities Commissions or various entities at the state or local level. There’s state legislators or representatives or senators who create statutes that these companies have to operate by, and then there’s common law that a lot of lawyers utilize in tort cases and things like that, and so there’s many aspects to the law, but one of the things that we’ve seen is that this kind of “disruptive business model” of ridesharing companies comes on the scene, and frankly, legislators and regulators are unprepared, because the reality is, is that for most of these regulators and legislators, what they’ve traditionally been used to seeing and dealing with is taxicabs. Now taxicabs offer a model that is somewhat similar, right, because they are picking up drivers from one location and they are dropping them off at a different location, but the underlying way in which it’s done, there are no Yellow, well I shouldn’t say there are no Yellow, but there’s not very many Yellow Uber cars or Lyft cars. These are people’s private vehicles that are now being utilized for the transportation services, and the same thing is, there’s not taxi medallions in these Uber or Lyft drivers’ vehicles, and so what we see is that a lot of the times the regulators and/or legislators are kind of rushed to catch up. Now, again, it’s not just on ridesharing companies. This is going to be an ongoing theme we will talk about at length, but what we see here is that California, in 2013, became the first state to regulate ridesharing companies. Now, and I say state because that’s not the first government entity that tried to kind of wrestle with the ridesharing companies. So in 2011, Uber received a cease and desist letter from the San Francisco Municipal Transportation Agency. That’s again another example of a regulatory body that I was discussing before. It was claiming essentially that Uber was operating an unlicensed taxicab company. Now, in 2013, Lyft, Uber and Sidecar were served with cease and desist letters from the Los Angeles Department of Transportation, again, another one of those regulatory bodies that we discussed. And so, what we see there is that in 2013, we see the State of California finally stepping in and attempting to regulate it. Now, in 2014, California’s Governor approved the Assembly Bill that went into effect in 2015 that related to the Passengers Charter Part Carriers Act that really specified that requirements for liability insurance for transportation network companies, i.e. ridesharing companies, and kind of set forth some kind of minimal standards. And so what we’ve seen kind of throughout this period is we have kind of seen an adjustment as it relates to the regulation. Now, we’re going to talk about regulation at much more detail in some of our further podcasts, but what I would say here kind of as we wrap up this section on regulations is that it really has kind of been the approach we see in California where they are kind of, I don’t want to say, “scrambling” is not the right word, but more reactive than proactive to this has happened in a lot of jurisdictions where what we see is the ridesharing companies or frankly, really just a lot of these disruptive technologies, have started to operate in the jurisdictions, and then we see the regulators kind of scramble to catch up proactively, enacting regulations and litigation. And so that’s happened in a lot of the jurisdictions, and we’ll go through and discuss kind of in much more detail kind of the regulations that surround ridesharing companies in some of our later podcasts.
That will conclude this episode of the Reminger Report Podcast. Thanks for joining us today on the Emerging Technologies, and please join us next time as we begin to discuss our next episode on the incredible rise in popularity of ridesharing companies. Thank you.