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Supervisor's Report

Embracing innovation and San Francisco’s sharing economy

A fleet of zipcars awaiting their drivers photo: Tvol / flickr

In November, a class action suit was filed against Uber – the popular on-demand car service – on behalf of San Francisco taxicab drivers, while the California Public Utilities Commission fined Uber (as well as a number of car-sharing services) $20,000 and threatened to shut them down. In my opinion, it was the wrong response to one of the most popular and innovative consumer services in recent history.

We all have horror stories about long waits for taxicabs in San Francisco, or worse, being stood up by a cab and having to miss important meetings or time with family and friends. In this era of smartphones, the old taxi dispatch system is quickly becoming outdated, and technology has enabled an innovative solution to a very antiquated industry.

In government, we should embrace these innovations, not fear them. Our regulations must continue to protect consumers, but also adapt to shifts in technology and consumer demand. For the car service industry, it is in everyone’s best interest to have drivers who carry car insurance, are licensed to drive their vehicles, and have no criminal histories. The California PUC, however, is taking it a step further by mandating that every driver carry commercial insurance, unwilling to acknowledge how quickly and dramatically the car service industry
has changed.

Over the past year, one of the biggest buzzwords in the technology community has been the burgeoning “sharing economy.” Characterized by popular companies such as ZipCar and AirBnB, the sharing economy is premised on providing consumers access to goods and services, as opposed to ownership. If you only need to drive a few times a week, why own a car when you can rent by the hour with ZipCar? If you’re heading to New York and don’t want to pay for an expensive hotel room, why not rent someone’s spare bedroom for half the cost?

For the car service industry, Uber and the other popular car-sharing services are leading the charge in the sharing economy and have truly revolutionized consumer behavior. Instead of calling ahead for a taxicab that may or may not arrive on time, why not tap a few buttons on your smartphone and receive text messages letting you know exactly when your Uber car will arrive, locating you seamlessly through GPS?

In City Hall, I co-founded and sit on a working group specifically organized to ensure our city government is embracing these ideas and the companies that are driving the sharing economy locally, and not letting government red tape stand in the way of innovation. We’re taking this technology evolution very seriously and believe every level of government should do the same. San Francisco in particular has a unique opportunity to harness the booming technology industry in our city to not only improve the everyday lives of our residents, but the way we operate our government as well.

As this debate rolls on specifically around Uber and the other car-sharing services, we have to be extremely mindful not to demonize or blame taxicab drivers who are simply trying to make a living. They work long hours and endure a challenging work environment to provide for their families, and I believe our city government should continue to promote the health of our
taxicab industry.

However, that doesn’t mean stifling new business models or discouraging innovation. Technology has cleared the path for new companies such as Uber and other ride-sharing services to find creative ways to offer competitive and efficient options for transportation. Threatening these companies with excessive fines and shutting them down ultimately does a disservice to the constituency our government aims to serve – the general public. We should all demand better.

As supervisor, I have made it a priority to support small business innovation and constantly seek efficiencies inside and outside of government that make our entire city thrive. Uber and other ride-sharing services address both of these priorities, while offering consumers an attractive alternative to what has historically been one of the most frustrating parts of our city. San Francisco has become widely known as the “innovation capital of the world,” and our government in Sacramento could learn a lesson or two from us locally – let’s hope they adapt quickly and realize that innovation and change is something to embrace, not run away from.

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Supervisor Mark E. Farrell is the District 2 supervisor and can be reached at 415-554-7752 or mark.farrell@sfgov.org