Transportation Network Companies: Massachusetts Legislation Ignores the Offering of New Services

By Woolf, Devin | The Journal of High Technology Law, January 2017 | Go to article overview

Transportation Network Companies: Massachusetts Legislation Ignores the Offering of New Services


Woolf, Devin, The Journal of High Technology Law


I. Introduction

There are many transportation options for residents of the Commonwealth to get around the city; from the MBTA's trains, buses, and the commuter rail, to taxicabs and personal motor vehicles. (1) After the unprecedented snow in 2015, the train was often not in service, city dwellers who could not walk from one location to the next utilized the services of Uber and Lyft to get to their destinations. (2)

Ride-sharing services have taken over the Massachusetts transportation market. According to Uber, the company has profited from over $1 million dollars in rides per day throughout all of the states and countries it services. (3) Over a year ago, more than eight million people used Uber, and this number has since grown exponentially. (4) These ride service technology startups arrived in Massachusetts back in 2009 and have since transformed the transportation sector by helping to meet the Commonwealth's transportation needs. (5) While the ride-sharing services have provided consumers with a more convenient option, concerns over passenger safety have steadily risen. (6) The Commonwealth's regulation of ride-sharing services faces continued challenges as a result of the constant offerings of new services. (7) Ride-sharing services are here to stay in Massachusetts and the legislation helps to maintain the market in a manner that will not deter startups, while better protecting consumers. (8)

Part two of this paper will discuss the history of ride-sharing services, the services they offer and the prices at which they offer them, as well as the requirements for their drivers. (9) The next section will discuss the regulation of taxicabs, reviewing their emergence on the market and the case law surrounding taxicab driver's concerns. (10) The history of the proposed legislation for ride-sharing services while they were operating in a legal gray area in Massachusetts will also be presented. (11) Following the history section, the facts of the legislation regulating Uber and Lyft will be discussed. (12) Then, the benefits and downfalls of the legislation will be analyzed. (13) The conclusion of this Note will discuss areas in which the legislation could be improved to keep up with Uber's constant offering of new services. (14)

II. History

A. Uber: Services, Fares, Pricing, and Requirements for Drivers

Uber was founded in 2009 and currently has operations in hundreds of cities, spanning sixty different countries. (15) Uber's presence has expanded to the global market and seeks to make cities more accessible for passengers and continues to launch new services. (16) Uber claims to "seamlessly" connect passengers to drivers through their online application, "acting as an intermediary, allowing two individuals to connect." (17)

Uber posts its itemized fare pricing for each of the cities it serves and each of the available motor vehicle options. (18) The choices for vehicles range from UberX, known as the "low-cost" Uber, the UberXL, the "low-cost" ride for large groups, UberBlack, "the original Uber," UberSUV "room for everyone," and UberTaxi "the taxi without the hassle," all of which have varying rates. (19) There are different fees associated for each of the different vehicles. (20)

A recent article published revealed the findings of a month long study that was conducted on Uber's surge pricing. (21) Uber uses an algorithm to adjust the price of a ride when demand is high and the supply of cars on the road is low. (22) Uber explains that their intent is to increase the fare to get more drivers active on the application which increases the supply of cars on the road in a particularly busy area. (23) Uber expects this to result in the reduction of wait time for vehicles, bringing the surge price back down to normal pricing due to the increase of vehicles on the road. (24) This is Uber's claim, but the study reveals that "the pricing system is working to reduce estimated wait times, but it seems to be working better in some neighborhoods than in others. …

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